2025 Update: Portfolio, Job Change, Outlook

In 2025, our net worth rose by 25.92% to $245,127 in USD and 11.56% in EUR to €208,619.

2025 was an enormous year for us. Our wealth has settled above $200,000, and I’ve changed employers after years of feeling economically underappreciated. In this year of contrasts, I earned some of my best money while also taking a substantial pay cut for the hope of a brighter future.

Net Worth Change

2025 generated significant returns in the markets for us, as it did for nearly anyone who held financial assets. We were net savers this year, yes, but it was the markets that did the heavy lifting.

Last year I wrote:

May we call a spade a spade? US large caps are in a bubble. Investors in US large caps are ignoring major risks to valuations. Even ignoring those risks, the overvaluation becomes undeniable when I look objectively at the outrageous outperformance of the S&P 500, the Nasdaq 100, and the hyper-focused growth and technology funds.

Adding to this discomfort is the knowledge that it's impossible to time the bubble's bursting. Any actions taken now will likely languish in relative underperformance while the market valuation churns upwards.

My action plan was:

I've decided to sell Apple and am debating Lowe's.

...within the Wiseguy Portfolio, I've reduced exposure to large-cap growth and raised small-cap value. I may increase exposure to bonds and gold, but I haven't decided yet.

I did all of the things I said I would definitely do and none of the things I thought I might do. How’d that work?

Individual Stocks

Selling Apple was, at least in the short term, the right call. Apple had trouble near the start of 2025 and ultimately underperformed despite having an up year. The largest purchase I made with the proceeds was AVDV (Avantis ex-US Small Cap Value ETF), which went on to have an incredible year. I also purchased a little more SGOL (Aberdeen Physical Gold Shares ETF), which, as part of the broader gold story, also had a great year.

My individual stock holdings did very well in the first quarter of the year (led by Berkshire Hathaway), only to trade range-bound until the end of the year, leading to a 11.82% return. I underestimated the effect of tariffs on companies like Green Brick Partners, Dutch Bros, and Lowe’s, and the announcement of Warren Buffett’s retirement led to trendless price action from Berkshire.

The Wiseguy Portfolio

Indeed, the Wiseguy Portfolio outperformed the S&P 500 24.13% to 17.82% (with dividends reinvested). The reduced growth-stocks version of it I adopted at the beginning of 2025 did even slightly better than that at 24.69%, but I’m not certain the juice was worth the squeeze. However, my actual performance was 23.22%, which is more than acceptable.

A reminder. The Wiseguy Portfolio, as originally conceived, is:

• 25% Large Cap Growth Stocks
• 50% Small Cap Value Stocks (divided equally between US and ex-US)
• 20% Long Term Bonds
• 5% Gold

An updated version, called Wiseguy 2.0, is:

• 25% Large Cap Growth
• 50% Small Cap Value
• 10% REITs (US and ex-US)
• 10% Long Term Bonds
• 5% Gold

The Wiseguy Portfolio outperformed because of gold (SGOL was up 63.99%) and ex-US small-cap value (AVDV’s return was 49.37%). Both assets had an incredible year, and we may have entered a period of alternative asset outperformance for which portfolios like the Wiseguy were built.

U.S. small-cap value remains a lagging factor. I won’t pretend to know why, but I hope that one day, the small value factor will once again shine in the U.S. as it has abroad.

That said, although I’m happy Wiseguy outperformed this year, my expectation is not that it will always outperform. The point of the portfolio is to increase the likelihood that I’m exposed to winning assets/factors in any given year, to reduce risk, and to reduce the possibility of prolonged negative performance or “lost decades” while also, more or less, achieving a market return.

Job Change

In 2019, I wrote “Out of Levers at My Current Job” where I expressed concern that there wasn’t anything else in my job I could do to meaningfully move the needle professionally. I felt frustrated that there was almost no amount of extra effort I could put in to improve our economic situation. I had reached the top at that job, and the only future improvements I could see would come from seniority raises, unionized negotiations, and side gigs, which were limited due to the time constraints of my job.

When the pandemic hit, I began looking in a different direction, and although it took years of effort, it paid off in 2024. I wrote at the end of last year:

I'm deliberately vague here about what I do for a living, but in 2024, I took some steps that have already had meaningful results for my life. Whether or not they translate to extra money is uncertain, but I do feel like I've been overly cautious career-wise for too long, and 2024 was the proof.

At the beginning of 2025, negotiations were still ongoing, but I landed the new job in January. This is one reason I haven’t been writing: my life has been consumed with change this year, and it’s been hard to find the mental space to write. Indeed, as I began to write this review, I was suddenly engaged in some extra work that devoured my attention.

The irony of my new life is this: I’ve taken a pay cut. My life is higher risk right now, but for the time being, it’s not higher reward. It might become so one day, but for now we’re having to buy groceries a little more carefully and be more judicious with our extravagance, which was never that extravagant.

At the very least, I am more satisfied with my work, which gives me a greater sense of purpose.

2026 Anticipations and Fears

Last year, I ended my yearly update with:

I am currently pessimistic about the direction of the world. This shift right-ward both in the US and in Europe threatens stability. Much of what we value about the world exists due to international order and the rule of law. The safety of shipping, the low barriers to trade, and the patchwork of friendly nations working together to solve problems has been imperfect but prosperity making. This new order threatens all of that while offering very little in return.

The events of the last year have reinforced those fears. Throughout 2025, President Trump threatened and bullied other countries with tariffs and trade policy and threat of takeover. He bombed Iran in June and Nigeria on Christmas Day. On January 2, 2026, he attacked Venezuela and kidnapped Nicolás Maduro, which was followed by threats to other countries, including Greenland/Denmark. Moreover, there has been rampant corruption in the White House.

In 2026, I am afraid of war, both an American civil war as well as war between the US and other countries, especially its allies. The ongoing threat to Taiwan from China remains, and the possibility of greater escalation in Ukraine also exists.

Truthfully, I don’t know what a portfolio can do to protect against this. I have no idea how Germany will react if the U.S. truly becomes hostile to Europe or invades Greenland. I don’t know if the U.S. will become even more hostile towards its citizens living abroad. Within the Wiseguy Portfolio, I have been adding foreign large-cap stocks to the large-cap growth allocation, and I’ve added world bonds to the bond allocation.

Let’s get real, though: if the United States truly turns into a rogue state, all bets are off. I called my portfolio the Wiseguy Portfolio because I was trying to control the uncontrollable. I wanted to always have something working within the portfolio, and I wanted it to be ready for nearly all situations. However, a complete breakdown of the world order is beyond any portfolio. Financial assets are merely a series of contracts, and contracts require a functioning legal order. The current president threatens that legal order. Godspeed to the protesters.

All of that hangs over what is otherwise a bright time in my life. It is difficult to know how to feel as I celebrate personal successes, even as there is increasing chaos in the background threatening to force its way to the foreground.

On that depressing note, I nevertheless wish you a healthy and happy 2026. Look for the value of things politics can’t touch.

2024 Year-End Review, Net Worth, Career, Large-Cap Bubble

2024 was complicated for everyone, I think. Although we got richer overall, it's hard not to look at last year's developments and worry about the future. I'm worried about what comes next. First, the good news.

Net Worth

Our net worth grew in 2024 by 14.59% in USD and 21.53% in EUR to $194,321 and €186,667, respectively.

Volatility and Expenses

This annual result masks some volatility. Like most investors, we saw the market jump after the Trump victory, only to watch as most of those gains were lost. In some positions, we lost much more than just the election jump. For example, Greenbrick Partners suffered heavily in the latter half of the year.

We also had some large expenses that ate into our returns. Most substantially, we have lingering tax issues from 2022, which inflated our 2024 estimated tax payments. I hope we'll be refunded much of that money in 2025, but as it stands, it's a loan we've been forced to fork over to the Finanzamt.

Careers

Both my wife and I continued to push our careers forward. I'm deliberately vague here about what I do for a living, but in 2024, I took some steps that have already had meaningful results for my life. Whether or not they translate to extra money is uncertain, but I do feel like I've been overly cautious career-wise for too long, and 2024 was the proof.

My wife's small business continues to grow. She has sharpened her preferred customers, raised prices, and increased her income. Although she doesn't think so, she's very brave and keeps impressing me.

Now let's look at the negatives.

US Stock Bubble

May we call a spade a spade? US large caps are in a bubble. Investors in US large caps are ignoring major risks to valuations. Even ignoring those risks, the overvaluation becomes undeniable when I look objectively at the outrageous outperformance of the S&P 500, the Nasdaq 100, and the hyper-focused growth and technology funds.

Adding to this discomfort is the knowledge that it's impossible to time the bubble's bursting. Any actions taken now will likely languish in relative underperformance while the market valuation churns upwards.

There are some acute risks that the market appears to be wholly discounting:

1. The risk of the US debt ceiling not being raised by the Republican-controlled Congress. The idea that US bonds are the safest asset in the world is at serious risk of being disrupted because the Republican party regularly threatens to not raise the debt ceiling.
2. Donald Trump's proposed tariffs on all imports may trigger inflation while provoking reciprocal trade wars.
3. Cuts to federal spending may reduce growth.
4. Bird flu transmission between humans. The first death from this latest strain was announced on January 6, 2025.
5. Geopolitical risk, especially the invasion of Taiwan by China. So much of the value of US growth is based on products manufactured in a country at major risk of invasion. For an example of geopolitical risk biting a country in the rear look no further than Germany. Allies warned Germany about tying its energy needs so tightly to Russia. As Germany built gas pipelines and shuttered its nuclear power plants, it was clearly ignoring a major source of risk, especially since its economy is so dependent on cheap energy. As we know now, that risk was very real, and Germany is now paying dearly for having hidden its head in the sand.
6. The risks associated with the US no longer being a "rule of law" country. The country elected a felon for president, for God's sake. This felon has promised to pardon the people who tried to overthrow the last presidential election. He is suing newspapers for coverage he finds offensive.

Beyond those acute risks, many stocks with the heaviest weighting in the S&P 500 are dangerously overvalued. Here are some charts from FAST Graphs showing the reasonable valuation line in orange based on earnings growth, their normal valuation line in blue, vs. a chart of weekly closing prices in black:

The SPY ETF:

Apple Inc:

Microsoft:

Nvidia:

Oracle:

Walmart:

Eli Lilly:

Broadcom:

Tesla:

My Portfolio

Several names in my portfolio are overvalued. Lowe's, Apple, Dutch Bros, and Berkshire Hathaway appear overvalued relative to their P/E ratios and growth prospects. I'm exempting Berkshire from this because evaluating book value is a better metric. But what do I do with the others? I intend on holding Dutch Bros because I always intended it to be a never-sell position. It's a tiny position, and I bought it on its first trading day like an idiot. So I'm holding.

Lowe's and Apple are harder. Both are excellent companies. Both are stupidly overvalued. I've decided to sell Apple and am debating Lowe's.

I've struggled with this next decision, but within the Wiseguy Portfolio, I've reduced exposure to large-cap growth and raised small-cap value. I may increase exposure to bonds and gold, but I haven't decided yet. Recessions hit small-cap earnings, too; regardless of their valuation, they will feel pain.

Vanguard Brokerage

After over a decade of using Vanguard as a mutual fund platform, I've finally switched over to their brokerage platform. They emailed me saying that they were forcing the change, which made the decision an easy one.

My foreign address was a hindrance before, but I've changed to an American address to switch. I hope this doesn't bite me in the butt, but I don't know what else to do. Vanguard has tolerated my foreign address for years, and I hope they remain tolerant of me for the foreseeable future.

As for the brokerage itself, it's not nearly as full-featured as Interactive Brokers or Robinhood. It's obviously designed for people who don't want to trade every day, which is fine for me, but I'm still struck by some information being difficult to find. Their app doesn't display the average price paid per share of a given security. That's weird. In the app, trade confirmations don't say how many shares I've purchased if I buy using a dollar amount. It's also annoying that purchasing in dollar amounts is limited to Vanguard securities only. It's a strange bit of self-serving, but it's not the end of the world.

2025 Forecast

I am currently pessimistic about the direction of the world. This shift right-ward both in the US and in Europe threatens stability. Much of what we value about the world exists due to international order and the rule of law. The safety of shipping, the low barriers to trade, and the patchwork of friendly nations working together to solve problems has been imperfect but prosperity making. This new order threatens all of that while offering very little in return.

I don't know what 2025 will bring. In less than a month, Germany will have its own elections, which also threaten to make the lives of immigrants worse. When it impacts us directly is impossible to say.

Until next time, take care of yourselves and your loved ones. Stay healthy. Keep saving.

2024 Third Quarter Update: Net Worth, Accounting, Your Money or Your Life, Anxiety

Numbers

At the end of the third quarter of 2024, my wife and I crossed the $200,000 net worth threshold for the first time. We ended September with $200,732/€180,352, corresponding to a quarter-over-quarter rise of 10.3%/6.63%.

I figured that we'd reach this point sometime this year, but the speed at which it happened has nevertheless surprised me. This has not been an awe-inspiring year of savings, and I feel like our money has just been going on a ride of its own making.

Accounting

One accounting change: I've included our rental deposit in our assets under the heading "Other Long Term Assets". Technically, it should function on our balance sheet as a long-term asset and for my landlord as a liability, even though the money is currently in his possession. This is similar to how customer deposits are liabilities on a bank balance sheet. It also remains an asset despite the risk that the deposit will be lowered upon moving out.

Taxes

I struggle with estimating and including tax liabilities in our accounting. Therefore, I simply haven't done it, although it's a major factor. For example, we had to pay a large estimated tax payment in September, most of which will almost certainly be returned to us. How do I include that? Most of it will be returned, but not all of it. And how best to include any accrued tax liability?

So should I throw up my hands and give up, as I've done, or make a lazy estimate?

Your Money or Your Life

Last month, I purchased Vicki Robin's Your Money or Your Life on Audible and listened while walking around the park. I won't write a big review at the moment, but there's a lot that's very good in the book.

What she does especially well is connect money with time. She frames the trade-offs in our choices very starkly, and I've been forced to reassess some of my lifestyle. That's especially true because I had some health scares during the last few months. Although those scares didn't add up to anything significant, I had to confront my fears about life and death.

Anxiety

I walk around with a lot of anxiety related to my economic success. This is true despite the ongoing success of my investment choices. Anxiety is, by its very nature, not happiness. What choices am I making, or better yet, what do I believe that provokes so much latent stress?

There are two avenues to disentangle:

• The fears about my "hopes and dreams" career field, which feels fundamentally precarious.
• My need to be perceived as successful, whether that translates to actual financial betterment or not.

I don't have answers at this point, only hunches. Under the first category, there's some reality underlying this anxiety. I work in a field full of economic uncertainty. My wife and I visited a friend over the weekend who's currently unemployed and on unemployment despite being respected in the field. A local employer is currently undergoing a change in management that will likely lead to a lot of employee turnover. Those employees may not be able to find new employment in this field.

Under the second, I do want to be seen as successful. It's the truth, but I don't know what the balance between being "seen as" and just "being" is, if that makes sense. In many senses, within my field, just going by the numbers, I am extremely successful. However, because I exist within this "hopes and dreams" world, my position does not confer great status on me.

And therein lies the tension. By the numbers, I should chill out and enjoy my life. By my nebulous sense of social status within my field, and my fear that my entire field might vanish, I can't.

Forecast

I suspect the next few months will be very good earning months for us both. Neither of us is going on any vacations, and there shouldn't be great expenses befalling us. We will have to pay some taxes, but we may also have some taxes returned to us.

Whether I can resolve these tensions in the next few months is uncertain. But I'll let you know my progress in the annual update. Until then, stay sane and healthy.

2024 First Half Update

Our net worth was $180,483/€167.735, representing a quarter-over-quarter change of -.71% and -.34% respectively. Quarter-over-quarter this was flat performance, but our first-half wealth growth in 2024 remains decent.

The Past Three Months

We've incurred a lot of spending in the past few months, which has slowed our savings rate. For one, our summer travel plans got expensive all of a sudden. We delayed buying our tickets to the US, which caused the price to creep up.

However, there's some spending that's just the result of carelessness. Some money leaks are happening, and I need to figure out where those are. For example, we're regularly exceeding our grocery budget. Some expenses are deliberate choices that nevertheless feel careless. I bought a new iPhone, which is expensive. My wife has doubled some of her lessons. I've been making some purchases in one of my side businesses. Each choice feels small in the moment, but they add together into reduced savings over time.

The stock market was also turbulent the past three months. I contemplated our wealth reaching the $200,000 in my last post, but as I hit "publish", the market gods reminded me not to get too complacent. That said, I wasn't worried about it as it was happening. Since I've adopted the ETF strategy, my mental health around investing remains healthy.

Third Quarter Forecast

I'm glad I waited before writing this post. In the latter half of June and in early July, we were expecting to have to pay enormous sums to the Finanzamt (the German tax authority) in estimated taxes. Because the pandemic depressed our incomes, our estimated taxes also correspondingly fell. When our incomes recovered, the Finanzamt wanted to adjust our estimated tax payments to new unheard-of levels. Thanks to the quick work of our tax preparer, we got the necessary paperwork organized and dispatched, which saved us from having to raid our savings just to cover estimated taxes.

It was a stressful moment, and it reminded me that I need to be more actively saving self-employment money as estimated tax funds. We shouldn't have allowed ourselves to get into that position.

That said, we're still digesting our elevated travel costs from the past few months. This will hamper saving. We also paid an outstanding tax bill from 2022, and that alone may wipe out any savings we accrue. It's hard to say without knowing the future.

Until next time, stay healthy.

First Quarter Update 2024

We had an excellent first quarter of 2024. Our net worth rose 8.42%/%10.82 quarter over quarter to $182,025/€168,542.

After I'd tallied everything, it hit me that we might cross the $200,000 mark sometime this year. It wouldn't even take outstanding performance. Even if our wealth compounds at 7% over the next two years, we'd pass that threshold sometime in 2025. Naturally, it's best to not become attached to any rate of return, but I'm trying to steel myself for the fact that growth might come more quickly than I'd anticipated.

Naturally, the primary mechanism of this is stock market growth. I've been saving every month, but the market has been easily outpacing my contributions. It's also been outpacing my spending (I went to the United States and bought a new iPhone this quarter). However, the reverse could just as easily be the case. So far in April, our portfolios have plunged more than our current year contributions. That kind of volatility is to be expected, but it's still bracing to see. Our contributions are gentle rows in a canoe that's already flowing through the water, but the current can still take us in unexpected directions.

Pension Valuation

We crossed the $100,000 mark sometime in late 2020, and I didn't recognize it at the time. I hadn't begun adding my German pension to the calculation, so life continued as normal. Frankly, I could probably goose the current numbers to equal greater than $200k now; all I'd have to do is value my pension as the equivalent of my contributions. But without a good reason to do so, I won't do that. When considering a pension rationally, the value of it can only equal or be greater than the value of contributions when viewed in hindsight.

One new emergent factor in my pension calculation is the reduction in life expectancy in the United States. Being American, I use the Social Security actuarial tables, and I have discovered that life expectancy has dropped by several years. I suspect this has to do with COVID-19, but regardless of the reason, with a potentially shortened lifespan, the valuation decreases.

Second Quarter Forecast

This has already been and will continue to be an expensive quarter.

The stock market thus far has been harsh to all factors. The one bright spot has been my small gold ETF position, but this is a mild retardant to the drawdown. Ex-US has also been relatively stable. However, this drawdown has already been nearly as severe as the cost of any of the spending I'm about to mention. If the drawdown continues, it will easily be greater than whatever spending we embark on.

My wife and I have decided it's time to do some remodeling and lifestyle upgrading, and we're spending on new bits of furniture and other household accouterments. It's nothing extravagant, but it's a cost. We will likely re-enter the world of TV ownership sometime in the next few months, for example. Ikea has also been padding its cash flow statements with our money.

We also plan to visit the US briefly this summer. My wife has an ill sibling, and we're taking some time to visit them. We also recently helped financially support this sibling's adult child, who had a cash crunch. Although they offered to reimburse us, I agree with Dave Ramsey that loaning money to family members is a way to hurt that relationship, so we gifted the money instead.

We also owe taxes from 2022. We don't know when the Finanzamt will hit us with the bill we know is due, but it's coming any day now.

Despite all that, we're doing well. Until next time. Stay happy and healthy.

2023 Update: New Worth, Reflections, Businesses

Staying the course worked.

When I wrote my end-of-year update for 2022, I was feeling pressure due to the severe drawdowns in our assets. 2022 was a rough year in nearly every asset class, and we were not spared. However, the choice to begin using ETFs for much of our portfolio meant that I didn't make any catastrophic choices despite the drawdowns, and that change paid off in 2023.

In 2023, I made additional changes, which have further solidified my temperament. Namely, my eliminating debt and restarting IRA contributions, I've taken steps that will pay off for decades while taking off some of the pressure to nail stock picks.

Net Worth Update

At the end of December 2022, I wrote:

However, December was also the first time that our net worth was down in every metric that I track. There are four comparisons at the top of my spreadsheet: USD month over month, EUR month over month, USD year over year, and EUR year over year. For the first time, all of these metrics were negative.

The story was very different in 2023.

Our net worth rose in December to $167,897/€152,080, which is a month-over-month rise of 6.6%/5.15%, a quarter-over-quarter rise of 13.90%/9.16%, and a year-over-year rise of 34.11%/30.10%. This represents an all-time high for our accumulated wealth.

2023 Changes

Debt and IRA

The biggest change was the decision to close out the loan I'd taken and restart my IRA contributions. This was not taken lightly, though some triggers made 2023 the year. I've mentioned those triggers before, but I'll summarize:

• A family conversation made me feel like I was being pushed into choices that I didn't agree with.
• Looking for emotional support to say "no" to family members, I found Dave Ramsey episodes.
• He's anti-debt, and I was in debt, and - after analyzing my feelings - I realized how stressed I was about it.
• His book Baby Steps Millionaires reminded me that tax-advantaged accounts are powerful tools for wealth building.

Looking back, had I not sold anything to pay for the debt reduction, I'd have more money today. But how would 2023 have felt? I didn't like that monthly payment to the loan company. I felt like our budget was overly tight because of it. It was a negative in my mental life, and although I'd have more money now had I simply persisted, I don't think I'd be as happy.

I filled up our IRA contributions for 2022 and 2023 early in the year, which meant I'd have to do the more complicated tax filing using the Foreign Tax Credit. I managed that, and it's not so bad, but U.S. tax filing remains a major net negative in our lives. Every year it's a stressful frightening experience.

Small Business People

We've been active small business people here in Germany. My wife made great strides in 2023, acquiring new customers and increasing her income. She diversified away from a single high-volume, low-paying customer and negotiated higher rates from several new clients. It was impressive.

I have several small businesses, and while they aren't able to compete with my wife's for income, they have increased our bottom lines. One of them is still in its infancy and therefore unprofitable, but I believe that will change in 2024. The other is almost pure profit. The attention is give towards them is what I might have in the past directed towards stock picking. This new focus is much more productive and fun.

This year, we've modified our budget spreadsheet to account for these varied sources of business income.

2024 Expectations

I don't know what will happen. At the end of 2022, I didn't expect that a single conversation with my sibling would so disrupt me. I didn't think I'd seriously enter this new line of business. I thought I might leave my job, which I didn't.

I know there will be disruptions, and there will be surprises. At least I hope so. If I could completely plan year 2024, that would be outrageously boring.

Until next time. Happy new year, happy saving in 2024, and stay healthy.

Third Quarter 2023 Update: Boredom Hack, Net Worth, Side Hustles, Taxes

I've had a breakthrough.

Here's a question: how much poor stock market performance is due to boredom? As in, if we're bored with our lives, are we turning to the markets purely for entertainment? For example, the speculative extremes during the pandemic may have been caused by people having nothing better to do.

In my own case, it's a likely factor in much of my own bad behavior. I have periods, especially since moving abroad, where I feel directionless. Due to the lack of upward mobility of my day job, it's hard to get excited about it when I'm at home. My wife can't absorb all of my neediness (nor should she be expected to, of course), but it has to go somewhere. My stock market life became an obsession and a fantasy, where maybe, just maybe, I could find the formula to let me bail on my day job and its constrictions.

This singular focus on it did some good things for me. Learning about companies is learning about the world. However, the anxiety of watching the market plagued my mental health. As a result, I've made a number of decisions that were poor and have led to head-scratching consequences. "What was I thinking?" has been a recurrent thought.

Two things have lightened my mental load. The first is having bitten the bullet and moved to mutual funds. Taking some of the pressure off of my individual stock positions came with an unfortunate tax bill (more on that later), but the concomitant reduction in anxiety has been worth it. The second is the reinvigorization of my side hustles. Over the summer, one of them got new life breathed into it. Having somewhere else to project my ambitions has been great for me.

Being too busy to worry about markets is an incredible hack. I go days now without looking at my portfolio's performance. It exists and does its thing. Honestly, as clever as I think the Wiseguy Portfolio is, I'm considering simplifying it even further because I want to spend even less time worrying about it and fiddling with it. Because there are more dividends from different funds coming in at any given time, and because I need to occasionally rebalance all these different funds, it gives me more chances to look at it and worry. It also eats up time that I could be using productively elsewhere.

I haven't made a final decision about that.

Net Worth

Our net worth increased quarter over quarter to $150,992 and €142,714, which is a quarter-over-quarter gain of 1.27% and 4.81% respectively.

The third quarter generally sees a lot of income come in (haha), which offset some of the market shenanigans. I got my summer bonus, and my wife also got some good-sized payments from her customers. Since our vacations were modest this year, we didn't have large summer outflows, and she could work more often uninteruptted.

The past two months have seen high market volatility, and my portfolio was hit. Bonds have been especially strongly hit, but some of my individual stocks have been beaten up too. Green Brick Partners, for example, has had a rough go of it due to some bad news in the mortgage market as well as Greenlight Capital selling a sizable chunk of their position to rebalance.

Side Hustle

One of my side hustles generated some sales, but I also had expenses that more than offset those. I'm trying to sell some things to keep the hit in line, but so far, I've been unsuccessful. I've also gotten a refund on one expensive item that will show up the next time I write one of these.

I want this side hustle to become a profit generator for me, and that's where most of my ambitious energy has been directed. The upside is that making wild swings in the side hustle might lead to imperfect results and some wasted money, but it won't lead to disaster like a bunch of stock trades can. And if I can make even a few multiples of profit on my invested money, I can have a return generator greater than most of my stock positions.

Taxes

In 2022, when I moved a lot of money to mutual funds, I did this by selling a bunch of individual stocks. This has led to a large tax bill in Germany, whis has taken me by surprise because I had a loss in the US.

The culprit was, besides myself, the weakened euro. Some of my trades were purchased when the euro was at a high point and sold when the euro was at a low point. This made gains more valuable and losses less potent. Because nearly all of my positions are dollar-denominated, I couldn't see my mistake, and as such, I had enough gains to have to accrue my first capital gains tax in Germany. Oops.

That hit hasn't landed in our net worth statement yet, but it's coming.

It's made me realize that it's very hard for me to determine the euro cost basis of my positions. I knew that I'd sold during a weak time for the euro, but I didn't realize that the difference would be that extreme. However, to determine my liability, I'd have to track every single lot purchase in a spreadsheet. Interactive Brokers does not provide good cross-currency tax planning tools, and if I don't do it myself, I'll just walk into this trap over and over again.

Final Thoughts

Even with the missteps, this was a good quarter. I feel relaxed about money for the first time in years, and I feel like I have somewhere to direct my creative energies outside of my day job.

We'll have some big costs coming up. My wife wants to see her family over Thanksgiving. The aforementioned tax bill will hit. I still have some investments I need to make in this side hustle. Hopefully, these costs are offset somewhat by some additional side hustle sales, some sales of personal items, and increased income from our day jobs. As for the stock market, it's anyone's guess.

Until next time, stay healthy.

2023 First Half Update

2023 Second Quarter Update:

The first quarter was full of re-evaluations of financial goals and strategies and was full of fear over impending disaster in my family. Back then, we had to make difficult decisions and have difficult conversations.

The second quarter of 2023 was much milder.

New All-Time High

After a year and a half of being in a net worth drawdown, we emerged at the end of June at a new all-time high. We're just shy of $150,000 at $149,097/€136,162. That's a quarter-over-quarter rise of 10.05%/9.05%.

The 2022 bear market, although not extreme by historical standards, was the worst extended drawdown we've had to live with during our married lives. Despite some losses, there were no disasters in our portfolios, and the stress lead to some necessary reappraisals of how best to allocate savings. I'm grateful for the lesson and happy to allocate most money to an ETF/mutual fund asset mix. While my stock picking has done well this year, I feel safer knowing that all of our eggs aren't in that basket.

The drawdown was exasperated by the drawdown of our incomes. My wife has a lull in her business as she changed strategies, and my extra income opportunities at work dried up. As the market corrected, we were unable to add money in any kind of aggressive way. However, both of those states have started to change: I've found new sources for additional work, and my wife's new business strategy is starting to pay off. It's exciting.

Family Disaster Averted

After much Sturm und Drang back in January and February, it appears that PoorParent will stay put. Staying put means staying in an uncomfortable but stable situation with a family member who has health problems.

It's clear that PoorParent isn't thrilled with this, but they also don't appear to be angry at me and Sib.

Honestly, Sib did most of the heavy lifting. I helped Sib define their own boundaries and see how they weren't respecting their own limits and desires. This lack of self-respect led to Sib not respecting my limits. But once Sib understood this, they had the uncomfortable conversation with PoorParent. Thus far, admittedly, I haven't spoken to PoorParent about my worries. They haven't brought it up, and I won't either.

Portfolio Performance

My individual stock portfolio returned 19.91% in the first half. This was mostly led by Greenbrick Partners and Apple Inc. Greenbrick is now a 1 bagger. It's had astounding performance. But so has Apple! Frankly, if there's any greatest mistake I've made while investing, it's selling even one share of Apple, and unfortunately, I've sold many more than one.

The laggard was Abbvie, which is facing increasing competition from Humira biosimilars. I may add more to the position if its price nears my purchase price.

The Wiseguy Portfolio as I've implemented it is hard to measure. Because it's across three different accounts and uses Vanguard "Admiral" funds in addition to ETFs, it means that getting close to the target weights is currently very tricky. Additionally, the iteration of the portfolio I call Wiseguy 2.0, which includes REITs, didn't take place until a few months ago.

An idealized version of the portfolio returned 12.07% in the first half of 2023. That underperformed the S&P 500, which returned 16.81%.

Second Half Financial Goals

As of yesterday, I have maxed out our 2023 IRA contributions. I put the final $2,000 into the US REITs portion because I refuse to hold a REITs ETF in my taxable accounts. Currently, I'm overweight REITs and US large-cap growth and through the rest of the year, I'll be adding to gold and the small cap value buckets in my taxable account.

We're also rebuilding our emergency fund. If we aim for 6 months of spending, then we need around €16,000, which we're not close to. I'm not planning on pulling a Ramsey and devoting every euro to that goal, however, and I will simply be adding monthly sums to it in addition to other saving. That kind of single-minded focus doesn't make sense when I have plenty of assets, and the risk to my livelihood is so low in comparison to the American "at will" employment reality.

That said, having extra cash would be reassuring.

We've also begun a small down payment fund. We're not devoting large sums to it yet, but it's frustrating not having anything saved for a better living situation.

My wife suggested a dog fund. We both want a dog someday, but we're concerned about the cost, so we've begun saving for it.

Wrap Up

I don't see any disasters on the horizon. The stock markets could always take a dive, which would be both a bummer and an opportunity. No matter what, we'll keep saving as best we can without running afoul of our dual tax situation. Until next time, stay healthy and keep saving. It adds up over time!

2023 First Quarter Update

When I decided to move to a quarterly posting schedule for these updates, I did so out of fear that I was getting repetitive. How many times could I write, "Net worth was up/down a bit... Mostly it was thanks to stocks one way or the other"?

Pretty dull.

The first quarter of 2023 was not dull, however. The consequences of one conversation rippled outward and touched all areas of our financial lives.

The Texts That Launched 1,000 Ships

One Sunday in January, I got a series of texts from my sibling (hereafter Sib) regarding my poor parent (hereafter PoorParent). It was a horrible conversation full of disagreements.

I've thought about writing more details about this, but it's much too personal. Long story short, the worries I laid out in My Baby Boomer Parent is Poor are threatening us much earlier than I had anticipated. The reality for me and Sib is that supporting PoorParent right now is only possible by severely limiting our lives in other ways. It would also make it more difficult to help PoorParent in the future when more dire situations arise.

Sib agrees with me now, but getting there was an unpleasant path.

Enter Dave Ramsey

I went to YouTube and looked up advice for people in my situation. There's hardly any, which is shocking, and the only person out there really talking about the duties or lack thereof of children when it comes to supporting their elderly poor parents is Dave Ramsey. So Dave Ramsey re-entered my life for the first time since I read his book Total Money Makeover back in 2009.

Although I'm not a pure Ramsey-ite, Dave's thinking has deeply influenced mine. Many of my money concepts can be directly linked to The Total Money Makeover. I've been budgeting for that long because, well, he told me too. I've become a true budget believer, and so has my wife. Even our "Blow" category is directly taken from his budget outline. Suffice it to say, I was primed to listen to what he had to say.

One thing that became clear was that I'm allowed to say no. To use his metaphor, I'm allowed to put on my own financial oxygen mask before I help other people, and that includes my parents.

Additionally, I now suspect that Sib and I had been enabling PoorParent. We can only take so much responsibility because we were much younger, but I can look to specific choices that PoorParent made that were emotionally and/or logistically supported by us. Had we gone along with fewer of these choices, we might currently have a better situation on our hands.

Tchüss, Debt

I was taking too much risk. That giant loan I took out in August 2021 was dumb. Sure, the interest rate was rock bottom, but so what? The monthly payments were annoying, and they limited our actual choices.

In February, I mostly paid it off after selling off a bunch of my individual stock positions. There's a pre-payment penalty for nearly all German debt, so I left slightly more than three scheduled payments to avoid that trap. You'll see a big change in the assets and liabilities of our net worth chart.

My thinking about the loan was wrong from the beginning.

FOMO

Reflecting, I got the loan after visiting America and feeling FOMO. I had this sense that I should do something, which is not a great emotional place from which to make decisions.

Most of the time, as I'm learning, the adult choice is just to keep on doing smart stable things. As Dave Ramsey describes it, his baby steps 4 and onward are pretty boring. Saving for retirement takes time, dedication, and patience. It's exciting in terms of the power of compound interest, but otherwise, it's a boring process. I've listened now to many calls into his show where someone has had a windfall and wants to do something to maximize their return on that money. For most people, the correct answer is to simply pay off any debt and their mortgage, and invest in mutual funds. This advice is often unsatisfactory for the caller, however.

Since I've become much less tolerant of holding individual stocks, the cognitive dissonance of being in debt while holding individual stocks became unbearable for me. I have no idea if I'm any good at picking stocks. For someone like me, borrowing money while owning individual stocks is especially dumb. I've learned in the past that my thinking goes crazy when I leveraged a position, and sure enough, I felt perpetually crazy.

The risk I had taken was:

• Job loss risk and risk that I couldn't make the future payments
• Increased risk of emotional volatility leading to poor decisions
• Currency rate risk (borrowed in euros to buy in dollars)
• Opportunity cost since that income was tied to monthly payments

It also bothered me philosophically that I was in debt. I liked being out of debt, and it was a point of pride that I'd paid off my student loans early. Along the way, yes, I had some installment plans, but there was never any interest attached. But now, I was in debt and paying interest. Yuck.

But even those installment plans need to be a thing of the past. Making choices for future me to pay for stuff is a mean thing to do to myself. It also assumes that the future looks like the present, which is not guaranteed.

Re-enter the IRA

During my Dave Ramsey rabbit hole, I listened to the Chris Hogan book "Everyday Millionaires" and read Ramsey's "Baby Steps Millionaires". One of the statistics was that most millionaires did it by steadily adding to their 401k plans. I hadn't added to my IRA since 2012, which was my loss because the money I'd put in between 2008 and 2012 - a total of $1,750 - had quintupled.

Therefore, after a decade of avoidance and fear, I've decided to continue adding to my IRA. For expats, this is tricky but doable. I'll have to use the Foreign Tax Credit rather than the Foreign Earned Income Exclusion to prevent tax payments to the US. This is more work, but having tax-sheltered investments is too important.

Wiseguy 2.0

I'll continue adding to the Wiseguy Portfolio allocation across my various accounts. Using Portfolio Performance, this is relatively easy to do with the Asset Allocation feature.

I've made an adjustment to weightings, however, which I'm thinking of as Wiseguy 2.0. There's now a 10% weighting to REITs, now that there's a tax-sheltered place for me to put them. REITs in a taxable account are dumb dumb dumb, which is why I left them out before. Within the REIT basket is a 25% allocation to ex-US REITs, so 2.5% of the total portfolio. That may seem paltry, but the fees on the Vanguard ex-US REIT fund are high. I'd like exposure, but until the fees come down more, I can't justify a heavy weighting.

To make space for the 10%, I've reduced the bond allocation to 10% from 20%. I'm taking more risk, which means that any future drawdowns will likely be more stomach-churning. However, I'm hoping this will also lead to long-term greater returns. I can't access my IRA money for another 30 years after all.

So Wiseguy 2.0 is this:

• 25% US Small Cap Value
• 25% US Large Cap Growth
• 25% ex-US Small Cap Value
• 10% Long-term bonds (both Treasury and Corporates)
• 10% REITs (75% US/25% ex-US)
• 5% Gold

Net Worth

Image: A stacked bar chart of our net worth over time. Click to enlarge.

As of March 31, 2023, our net worth rose since December by 8.22% in USD and 6.83% in EUR to $135,357 and €124,753 respectively. Liquid net worth is $99,747.

This new chart is meant to simplify viewing. The previous style was pretty difficult to read, and this new iteration makes it clearer. It also, perhaps a bit pretentiously, uses typical business accounting terms for some items, such as "Cash and cash equivalents". "Accounts receivable" at this point means strictly dividends for which the ex-dividend date has passed.

Stock Performance

Stocks have more or less been in an uptrend. Of the Wiseguy components, US large-cap growth, gold, and bonds have all done very well. Small-cap value has performed poorly, likely as a result of banking industry volatility. The purchase of the REIT funds accidentally corresponded with a bounce for that asset class, which wasn't intentional but worked out in my favor.

Spending

In addition to the big macro money moves, we've also re-committed to following our budget. We reined in our grocery spending, cut down on subscriptions, and otherwise made choices that resulted in lower spending overall. I'm also turning reward points (classified as "intangible assets") into groceries or money as much as I can.

We did buy a plane ticket for my wife to visit her family in the States. That was necessary. However, we've declined to go on a big vacation this summer in the US. This was a secondary set of conversations with my family that were difficult, but I'm at peace about it.

Simultaneously, the elimination of the debt also eliminated the lifetime interest cost, which I had added to the liabilities side of our balance sheet. That was about €2,000.

Second Quarter Forecast

Considering how much activity there was in the past three months, it's hard to consider what might happen in the next three. Here's some of what we know:

Our heating bill has gone up a lot. We'll have to eat a big upfront cost in April, and our monthly warm rent will rise. That's a bummer, but it's the situation Germany finds itself in.

My wife and I will likely plan some modest trip for the two of us. We'll probably pay for it before the end of June.

I'm going to aggressively add to my IRA until I hit the max for 2023. $6500 is a doable number, and I hope to never miss hitting the max ever again. I doubt I'll get there by the end of June though.

The last debt payment will be gone at the end of May. Good riddance.

Until next time, stay healthy and avoid FOMO.

December 2022: Update and Full Year Summary

December was a great month. We had family visit us from the US over Christmas for the very first time. We traveled some. We ate some great meals and had a lot of laughs.

However, December was also the first time that our net worth was down in every metric that I track. There are four comparisons at the top of my spreadsheet: USD month over month, EUR month over month, USD year over year, and EUR year over year. For the first time, all of these metrics were negative.

Just like the stock market isn't the economy, your net worth isn't your life. But since this is a money blog, let's focus on the money part of things.

Net Worth Changes

Image: chart of our net worth in USD over time

In December, our net worth fell to $125,071/€116,780, which represents the following changes:

Metric	Percentage
Y/Y USD	-14.23%
Y/Y EUR	-8.79
M/M USD	-2.53%
M/M EUR	-5.71%

Maybe I can assuage my disappointment by creating a new metric: quarter over quarter. How's that look?

Metric	Percentage
Q/Q USD	6.83%
Q/Q EUR	-2.25%

So now one metric shows improvement. I'll take the win where I can I guess.

Our liquid net worth stood at $95,876/€89,521.

So what's up?

Inflation Devours All

The obvious big story is this:

• Due to the war, supply chain, stimulus programs, and energy shocks, inflation rose drastically.
• The Federal Reserve and other major central banks raised their benchmark interest rates to counteract this.
• Since the present value of equities is all future cash flows discounted to the present, both the discount rate and the - assumed - poorer quality of those cash flows put downward pressure on the value of stocks.
• Rising interest rates caused bond prices to fall.

We were not spared from this, and I took some serious hits on the large number of growth companies I had in my portfolio. They weren't the worst growth companies to have owned, but they were hit very hard anyway.

I took some steps to protect myself. In my IRAs, I sold in February due to trend following rules being triggered, which protected us there. I decided to reduce my exposure to individual companies and create the Wiseguy Portfolio, which is a kind of "all seasons" portfolio.

Image: Chart of portfolios in 2022: Green is my IRA, teal is my ETF account containing the Wiseguy Portfolio (started in May), red is S&P 500 benchmark, black is all portfolios together, yellow is individual stocks.

Finally, the effect of rising interest rates has caused a reduction in the estimated value of my pension. Since the pension is discounted at the rate of the 10 year treasury, rising rates reduce the future value. In a sense, this value is both real and imaginary; I'll never be able to pull out all this cash one way or the other, but I do have a guaranteed income stream in addition to government social security. It has value.

Spending

I've created a Sankey diagram that documents the flow of our money. For practical reasons, the numbers are slightly different in some cases compared to our actual budget, but overall this represents money received and spent/allocated well.

Image: A Sankey diagram showing the flow of money from income sources to spending categories.

Excluding tax, social security, and health insurance costs, our largest expenses fall into these categories:

• Rent (warm) (€10956.81)
• Groceries (€5984.66)
• My BLOW money (€4605.97)
• Travel costs (€3532.05)
• Her BLOW money (€3532.05)

A reminder: BLOW is anything we buy that is personal and doesn't require discussing with the other partner.

You can see the mark of inflation on our two largest household expenses. Our rent was raised in August, which was a bummer that upset my equilibrium for a while. Our grocery bill for the year rose from €5,158.22 in 2021 to €5984.66, which is a ~16% jump. Some of that could be carelessness on our part, but some is definitely climbing prices.

Our travel costs included a trip to the US for her, a trip to the US for me, a few weeks of fun in Europe in the summer, and a late year trip with the family who visited us over the holidays. As much as I'd like this number to be lower, there's a reality that an expat who has good relationships with his family will also likely have recurring large travel expenses to contend with.

Image: Chart of the EURUSD price in 2022

Unfortunately, my US trip coincided with a weak period for the euro against the dollar. This made the trip much more painful than it otherwise might have been.

Mindset Changes

There were three major changes in how I view our financial goals in 2022.

Cash

At several points, I felt hemmed in and without options. The most acute phase of this happened when we had our rent raised, but it was a recurring theme in the second half of the year. Yes, we had stock assets, but should we ever actually experience and emergency, our stock wealth would have to be sold off to actually give us flexibility. This increasingly felt intolerable to me, since I was sort of mentally double spending that money: it was both meant as a long term savings but also potentially a bail out, emergency, house, career change fund. It was untenable.

So we are now allocating much more towards cash. Savings accounts both in the US and Germany actually pay something now (though it's still crazy low in Germany). This allows us to pursue opportunities the way a big stock allocation can't.

The Implausibility of FIRE

It is unlikely that we will be able to retire early in any significant way. Perhaps that will change, but it won't change in the next few years, and in acknowledging that reality, I have to ask some questions.

For example, are there other career paths that might be more rewarding? If we have to work anyway, then why not do something that is genuinely enjoyable during that time? Perhaps staying put is the best option, but I should create the space where that's a choice rather than mandatory.

So much of the online financial world is fixated on this idea, that to acknowledge it may never be reality for us feels like a failure. However, my desire is to keep working. It always was, and the FIRE idea was mostly a way to give myself permission to pursue avenues that I find more fulfilling.

Stock Picking

Until this year, I'd exclusively been a stock picker. The US extraterritorial taxation regime has made the purchase of mutual funds tricky, and I'd believed I'd be able to handle individual stocks as the container for all our long term wealth.

It's safe to say that I was wrong.

I've grown as an investor, but I still make silly mistakes that should probably make it clear that stock picking ought not be my primary savings strategy. Yes, I've become less trigger happy, but I'm still too damned trigger happy. Just in the past few months, I sold several securities too early and missed out on rebounds. And my analysis is often rudimentary at best.

I've also discovered that focusing on stocks is not the best use of my time from a "quality of life" point of view. It's stressful and distracting. I have better questions to focus on and better uses of my time than worrying about whether such and such company faces an existential threat or is just going through a rough patch.

My returns thus far - while not catastrophic - align with returns I could more easily achieve by buying ETFs, and so that's what I'm mostly doing now. I just hope that the US/Germany thing doesn't bite me in the ass; if Germany adopts a PFIC type punitive taxation regime again for foreign mutual funds, I'm SOL. But best to save those worries for the future.

2023

The four big questions hanging over me now and likely throughout the year are as follows:

• Do I change jobs and potentially enter a riskier line of work in the hopes of greater life satisfaction and potential long term economic benefits? Or do I remain as I am now: basking in the weird safety of my current position, but potentially plagued by long term doubts around what might have been?
• How do I allocate limited savings for a potential risky life change?
• Do we participate in an expensive vacation that my family has planned out? We participated this year in Europe, but in summer 2023, it's further away and likely much more expensive. This is part of a larger question around family expectations and travel. I should probably write about this, but in general, I feel a lot of pressure to travel to see family, even though the prices are often higher for me, and my income is lower than the other people participating in the trip.
• Does the ticking time bomb of my poor Baby Boomer parent finally explode. There have been indications just in the past month that it might.

One change to the blog is that I will switch to quarterly updates rather than monthly. I find that I repeat myself too often month to month in these updates, and the movements within a month are often noisy.

With that, I leave you for now and wish you a happy and healthy 2023 full of great moments that let you forget about any financial stress you may have.

November 2022 Update: Electricity, Net Worth, Portfolio

We got a refund on our electricity. Hallelujah.

In 2016, I got it into my head to track our electricity in a spreadsheet. Weirdly, we're required to do our own meter readings and report them to the power company, and since the meter was right there in the apartment, I figured I'd track it. Every Sunday and first of the month, I dutifully snap a photo of the meter. Each photo's numbers gets plugged into a weekly or monthly spreadsheet, which tells me the change week over week or month over month. Add in some spreadsheet functions, and I can see how we're doing in a given year and how our usage has changed over time.

Image: Chart of average weekly electricity usage over time. Does not include heat, which is a separate bill.

Until recently, our average had steadily been moving upwards. This felt inexorable until we made some drastic changes. The main one has been reducing the shower's heat. As I've written before, this means lukewarm rather than luxurious. I also only run the shower when rinsing; while lathering up, the water is off. Both of us are in and our pretty quickly.

Long story short, we managed to save enough electricity to warrant a small refund from the power company. This was a nice boost to November and a pleasant surprise in a sea of horror stories about electricity prices.

All in all, I recommend this practice of proactive electricity usage tracking. Obviously, if I had a smart meter, this might be easier, but this current process forces me to stare at results and ponder why one week was higher or lower, which has prompted changes.

Net Worth

Image: Chart of our net worth in USD since 2013

Our net worth rose 5.33% in USD and .52% in EUR to $128,316 and €123,857 respectively. Liquid net worth stands at $99,626 and €96,164.

Euro Strength

The main driver of the discrepancy between USD and EUR returns was the strengthening euro. Last month, the euro could buy $0.98871, while now it can buy $1.036. That blunts the upward movement of gains in a USD portfolio.

It's fine by me though. One small benefit is that credit card purchases made on US credit cards are cheaper to pay off since the value of the debt has shrunk over time thanks to the currency movement. Yes, I track this.

Portfolio Performance

Image: November portfolio performance as a percentage. Green line = Wiseguy portfolio, yellow = individual US-listed stocks, red = S&P 500, blue = IRA

My portfolios, with the exception of my IRA, outperformed in November. The Wiseguy Portfolio did especially well, rising just under 8%. This was led by the strong performance of the Avantis International Small Cap Value ETF at 12.82%(!), the Vanguard Long Term Bond ETF at 8.55% and the abrdn Physical Gold Shares ETF at 8.45%.

Image: Breakdown of returns within the Wiseguy Portfolio in October and November vs. Vanguard's S&P 500 fund.

Portfolio Changes

Image: My IRAs in blue vs. the S&P 500 in red in 2022

After the last day of November, the trend following rules were hit, and I bought Vanguard's Total World Admiral Shares in my IRA. It is entirely possible that I'll get whip lashed out of that position if the market resumes a downward trajectory. Them's the breaks with trend following.

Near the end of November, I sold Exxon Mobile for a small profit. The proceeds were sent to the Wiseguy Portfolio at the start of December. I'm not good at holding oil extraction companies and should probably avoid them. Berkshire and the small cap ETFs have significant exposure to energy commodities as is.

Other Factors and December Outlook

We received the yearly family subsidy for my wife's piano lessons. That will be stored in our high yield savings account.

December is shaping up to be a mixed bag, savings wise. Christmas is generally expensive, but I also receive my holiday bonus. However, some of my wife's customers were laggards paying their invoices in November, which meant fewer euros being carried over to December. Some of our expenses were also unexpectedly high in November.

We expect visitors from the US for Christmas, which is worth some spending and fun. It's such a pleasure to have anyone visit us over here, and we may do some small scale Europe travel. We will certainly get some kind of Christmas tree.

We also plan to make a donation to our local food bank, whose services we personally witness since they're in our neighborhood. More than food, they provide other nourishment for those who are having bad luck in their lives.

Until next time, count your blessings and help others where you can.

October 2022: Portfolio Performance, Net Worth

Throughout October, I spent much of my free time inputting all of my trades into the application Portfolio Performance.

I wanted to answer the question: am I any good at this? What have I gained by trading individual stocks? I'm not interested in bullshitting myself or anyone who reads this, and so despite the tedious nature of inputting hundreds of transactions and the RSI issues of sitting at a computer that long, I just took the time and did it.

The answer was mixed.

There were many times that I groaned at an ill timed buy or sell. But there were also times when my instincts served me well and saved me from a painful drawdown. It's not a stellar record by any means, but it's not horrible either for someone who barely knows what he's doing.

To summarize: I stumbled along and avoided doing anything disastrous. However, all my efforts added up to underperforming the S&P significantly.

One major takeaway is how fees add up. In my Interactive Brokers account, I've paid over $1,000 just in fees since 2017. Their fees are low, so it's hard to see just how they add up over time. That doesn't include interest costs from using margin either.

It's also clear that maintaining a steady asset allocation somewhere in there is important. The decision to implement the Wiseguy Portfolio was a good one. I'm a mediocre stock picker, and I shouldn't keep all my money in individual names.

The project isn't totally finished; I still want to enter my high yield savings account, since that has been my preferred holding place for cash the past few years. I also need to include the loan I took out, but that's trickier. My goal is an honest accounting, but that's easier said than done.

Here's an image for you though:

Image: Portfolio performance in 2022

Notice how the blue line drops a bit then flat lines with small ticks upwards? That's my IRA gone to cash in February 2022 when the trend following rule was hit and receiving monthly interest payments. This tweet from Cliff Asness sums it up:

Net Worth

As of October 31, our net worth rose in October 4.06% in USD and 3.14% in EUR to $121,828 and €123,220 respectively. Liquid net worth sits at $93,016 and €94,078.

Image: Net worth chart in USD

The stock market did well, and my various portfolios also performed well:

Image: October's portfolio performance chart

You can see that they underperformed the S&P 500 (red line), though my individual stock holdings (yellow line) traded places throughout the month. The Wiseguy Portfolio (green line) fared less well.

The euro strengthened, which lowered the value of USD assets relative to euros and raised the burden of our euro debt relative to dollars. However, my general belief is that I win either way: a strengthening euro is a raise for my income, while a strengthening dollar makes me richer in Europe. It's not a terrible position.

Image: net worth chart in euros

Portfolio Changes

After selling Store Capital at the end of September, I used the money to add to Enbridge, Alphabet, Lowe's and Ally Financial while starting new positions in Pepsico, Exxon Mobile, and Cloudflare.

Purchases

I bought an iPad Air. I love the thing. They've improved so much since my last iPad, and I used Amazon's incremental payments scheme to spread the cost over five months (reflected in the additional euro liabilities burden).

November Outlook

There have been some big portfolio changes in November, sadly. Namely, I sold Ally and spread that around to other companies. That was a long holding, and I hope to re-enter one day, but I would like to lower my tax burden before the end of the year, and selling at a loss can do that.

Otherwise, it's a normal month. Until next time, take care of yourselves and those you love.