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$8,926

Happy New Year 2021!!!

I started this journey in January 2020 right before the covid-19 pandemic. Woke up one morning, opened my journal, wrote down my plans for the year of 2020 such as lowering my debts, investing in the stock market, increasing my emergency funds and coming up with other income streams through side hustles.

No one ever expected 2020 to be such a rough roller coaster ride. As we all already know; nothing good ever comes from a pandemic. In every situation there’s an opportunity waiting to be discovered. If I had known the Do’s-and-Don’ts lessons I’ve learned last year, the year prior, my yearly report would’ve been different when it comes to my investment strategy and money allocation.

Let’s get started shall we!!

DO YOUR OWN RESEARCH

I was so eager to start investing in the stock market I made the same mistake as any new investors would have done, relying on what the media says and the so-called-gurus.

On January 24, 2020, Exxon Mobil $XOM was the first stock I added to my portfolio from my taxable brokerage account at Robinhood. When they stated that ExxonMobil was a great buy, I bought my first 9 shares without any hesitation. I added even more while it was still in the downstream. Maybe it would’ve been a different outcome if I had done some research on what was affecting the stock prices. Twenty days later, the market crashed, and $XOM was trading for $31.45.

I quickly learned timing the market is the worst strategy to apply. It’s all about the amount of time you can stay in the market and watch your wealth grow.

Now I know from my research energy sector companies like Exxon Mobil is not about to disappear anytime soon. Lately, I’ve been applying the cost-average method at a very slow paste because $XOM already holds 20% of my portfolio as of today.

INVEST WHAT IS LEFT

My ways of allocating money when I started this journey has changed from the previous years. By the fourth quarter, I had to re-strategize to the point I had to stop investing completely due to some unexpected reasons. My strategy was not working for my own benefit. I used to make it a priority to pay everyone first; then throw what’s left on my brokerage accounts after filling up my gas tank.

Formerly, I was investing 20% of my bi-weekly income in the market. Pay bills with what’s left and barely anything on my emergency fund. I still don’t believe and keeping too much money in the bank but I had enough to cover for about two months of expenses but not the three to six as recommended by the FI community then the unexpected happened

After listening to a few financial independence podcasts and studying some of the most successful investors. I’ve noticed they all have one thing they preach in common is to “pay-yourself-first”. I’ve decided to go with that approach and made my contributions to my emergency funds automatically, set up billpay from my checking account and invest what’s left.

This gives me so much ease and pleasure knowing everything is working as designed without any extra leg work.

FOCUS ON THE LONG-TERM

Compulsively checking your brokerage account trying to beat the market is nothing but a waste of time. Since I’m in it for the long-term, I will stick with the basics and keep funding my portfolio no matter if it’s a bull or bear market.

As you can see from the screenshot below, even with the arrival of COVID, my portfolio YTD returns are 10.19% from January 2020. While the average 2020 return for the S&P 500 was 8.94%,

GOALS

> Get my emergency fund to cover at least three months of expenses by the summer.

> Be debt free by the end of the year.

> Focus more on funding my index fund and less individual stocks.

CONCLUSION

I’ll be the first to admit at the beginning of the journey I was not acting out of logic. I was more acting out of emotion. Nevertheless, I’m thankful for the trials and tribulations that 2020 gave and the strength to continue the journey to financial independence.

Stay the course my growth focused family.

**Valuable Resources I Use Daily:

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