It was the best of times, it was the worst of times. June was an interesting month. On one hand, Whitney and I have been having the time of our lives in Alaska hiking, camping, and fishing in some of the most beautiful places we’ve ever seen. We’ve gone to several national parks in Alaska since we’ve been here, and we’re loving our part time travel jobs. On the other hand, inflation is at 40+ year highs, making everything very expensive at the same time crypto collapsed and equities are getting crushed, putting a squeeze on everyone’s finances, mine included. This month was my second largest drop in net assets ever in percentage terms and the largest drop ever in dollar value.
The fluctuations don’t bother me nearly as much as they used to, which I believe has a few different explanations. First, our business continues to grow which means higher monthly revenue and less financial risk. Second, I have a very large cash cushion (around 25% of total assets) that I’ve been accumulating throughout 2021 and 2022 which blunts drawdowns. Third, I really believe in the long term promise of Bitcoin, so drops in price feel more like exciting buying opportunities than a terrible loss. Fourth, having paid cash for our townhouse in 2020 means very low fixed expenses, which further reduces risk and gives me peace of mind even when markets are way down. Overall, I’m a significantly less emotional investor now than I’ve been in the past.
Income from our websites (FifthWheelPT and Travel Therapy Mentor) for June was nearly 50% higher than in May, and our second best month of all time behind only April 2022. The crazy thing is that this wasn’t even a special or even particularly busy month like April was where we had a backlog of payments. Also June has historically been a relatively low revenue month for the business. In fact, income for this month was a full 5 times higher than June of last year! Every month I’m amazed by how well the business is doing, but particularly so this month.
In June my monthly expenses were the highest they’ve been in any single month my entire life. Our housing is very expensive in Alaska, gas is crazy expensive and we’ve been driving a lot, and we have trips and tours booked almost every weekend that are insanely expensive. For example, a day trip tour to Katmai National Park is $1,050/person and that’s with doing everything possible to reduce the cost! There have been times in my life where I spent less than $1,050 for an entire month so $1,050 for a day seems crazy. But, we’re determined to make it to all of the national parks, so we don’t have a choice in terms of spending the money. Although Katmai is the most expensive, almost all of the national parks in Alaska cost at least $350 to really experience them. I estimate that my savings rate for the month was at about 55% which isn’t great based on the income earned.
The S&P 500 was down about 8.4% in June was is pretty dismal, but nothing compared to crypto. Bitcoin was down about 37.2% on the month, with most of the alt coins down much more than that. That’s neck and neck with the highest monthly drop of all time for Bitcoin, which says a lot with how volatile Bitcoin has been in it’s history. Inflation continues to rage, and now a recession is a near certainty. Economic activity is undoubtedly slowing down with the housing market dropping off a cliff since the dramatic increase in mortgage rates as the Fed hikes rates to try to tame inflation. I’ve been taking advantage of the low prices, especially in Bitcoin, to buy. I now have the most money I’ve ever had invested in Bitcoin and am more certain than ever that this is a good decision for the long term. I could always be wrong, but these low prices seem like a major blessing and a result of liquidations combined with market overreaction instead of a real change in the long term outlook of Bitcoin. To a lesser extent, I’ve been adding money to equity index funds as well.
Financial Independence Progress
My net assets decreased by 7% in June which was way better than I was expecting with the bloodbath in my investment accounts. My high monthly income and big cash position along with home equity continue to cushion these investment drops. With this drop, I’m now sitting at assets equal to 47.4 times my yearly expenses.
In July we’re insanely busy. We have trips planned every weekend and some on weekdays as well. We’re doing our very best to take advantage of all Alaska has to offer before we leave here in August. We also have a travel therapy meetup planned in Anchorage. And of course we have to plan time in our schedules for our business to get articles, videos, emails/messages, accounting, business calls, and social media posts done.
I’m optimistic about at least a bounce in Bitcoin and equity prices in July with such a bad start to the year. Hopefully all of the bad news is priced in now and we start to see a real recovery from here, but I’m not holding my breath on that.
How was June for you financially? Let me know in the comments!