Public companies report their quarterly performance, but households do not because that information is private. The second quarter of 2022 begins April 1. It would be difficult to prepare your first quarter financial reports if you are unaware of the outcomes of your financial behaviors. By tracking your monthly transactions like a publicly traded company, describing your performance for the first three months of this year would be easy.
A quick calculation of the Riddick household’s finances revealed a $138,477 loss of wealth from January 1 of this year. To put that number in perspective, imagine yourself driving three miles and throwing $46,159 out the window at each mile marker. You get the picture.
Being aware of the loss is one thing and understanding where it came from is another. The majority of lost wealth came from a decrease in the value of stock investments. Wealth can increase or decrease depending on the market’s movement. This is to be expected and since no shares of any investments were sold, that temporary loss has the opportunity to recover in the future. Ultimately, share price is most important when buying or selling an investment.
Although this loss of wealth occurred over three months, it was not known until calculating the Riddick household first quarter performance. Also, this wealth loss did not cause a kneejerk reaction and initiate a selling spree. The Riddick’s wealth building plan was put in place many years ago and this most recent loss is like a single speed bump on a 10-mile-long road.
If one of your goals at the beginning of 2022 was to save more money, pay off debt, or build wealth, it would be wise to treat your finances as if you are running a million dollar corporation. In actuality, you are. It just so happens that the $1 million in income might take place over a decade or two. There will be many ups and downs during this journey, however, the main goal is to not quit.
