When we started the year 2020, the stock market was surging. Our brokerage accounts were hitting all time highs. Our liquid investments of $22,085 surged to over $26k in mid-February.
And then, as you all know, COVID-19 happened. A stock market pandemic followed by a recovery that was faster than anyone could have guessed.
In this article I'm going to reveal our 2020 savings and investment performance analysis. Read on to learn what we did well on and where we missed the mark.
Where We Began the Year
I started Beyond Pennies in late January of 2020. One of my first posts, Investment Income Report – Jan 2020 showed the following results:
So we started the year with a brokerage account balance of $22,085. That will be our baseline for this analysis. At the time, most of our assets were in stocks.
Over the course of the year, our allocation of assets changed quite a bit.
Stock Market Coronavirus Crash
When the stock market crash began on February 20, 2020, we all should have known it was coming. If we sold our assets mid-Feb, we would have saved ourselves a $5,000 loss that I lament to this day.
It may not be much to some folks out there, but for us, that was a chunk of sailboat money in an account that was just starting to grow.
We sold everything – we closed all of our stock and options positions – and decided to wait it out. I had no idea it would recover as fast as it did.
Our Biggest Mistakes
Our biggest investment mistake this year was sitting in cash for too long. I didn't think the market would recover so fast, while we were still in the midst of a pandemic, with no end in sight.
Somehow it did. And we missed out on gaining back some of our losses, as stock prices rose.
Meanwhile, we were not hitting our savings targets. We were self-medicating during the quarantine with an unhealthy stream of Amazon purchases and Kirkland's prosecco. Yes, we were day drinking.
Eventually that got old.
We went on a vacation in mid-August that was postponed from April. Almost in defiance of the Coronavirus, we flew to Florida in the middle of their surge.
We spent much needed time on the beach, at the pool, and then we went on a sailing charter to earn three sailing certificates we needed.
The sailing charter was a disaster. And at the end, my husband received a phone call about a tragic accident involving his father. Our vacation came to an abrupt end, and it was time to fly back to Oregon.
And then drive to Montana for a funeral.
Learning to Blog
Meanwhile I was learning how to blog. My writing skills improved, and the design of the blog improved as well. Growing social networks has been a boon to my blog traffic.
I started out with a goal of adding 1,000 email addresses to my list in 2020. I ended November with less than 100. But then something happened.
I finally created a lead that got clicks! Since November, I've added nearly 200 email addresses to my list. Using Leadpages has changed everything for me. Their pop-ups make it easier for visitors to opt-in to my email lists because there are fewer steps.
My Leadpages is integrated with my Convertkit email list. When someone signs up to my lead, it kicks off a sequence of emails that delivers a free worksheet every week to those who opt in. This process enables me to provide a lot of value to my readers.
Blog plugins that add tons of value and automate processes to run my blog include Pretty Links, Revive Old Posts, and Social Welfare.
For 2021, my goals are to build my readership, traffic, and start a revenue stream by promoting products I use. I will spend less time worrying about creating a product to sell, and focus more on value to my readers.
A product to sell will happen later, when I understand exactly what to create. I'm not there yet.
Despite the slow build, my focus on creating unique, quality content using my personal expertise on the subject of finance will continue, instead of hiring writers to churn out articles. I love that my blog is written by a finance expert (me), and not some random blog writer off the web. However, I will invite more guest posts, particularly those with a story to share about a personal experience (if that's you, contact me!)
Investment Performance – Liquid Assets
Our current liquid asset allocation includes the following securities:
- Cash
- Stocks and options
- P2P Loans
- Cryptocurrency
- Real Estate Crowdfunding
We began 2020 with $22,085, and ended the year with $47,723, for a gain in savings of $25,638 or 116%. This includes a realized loss of approx. $3,500 in stocks, an unrealized gain of $3,239 in cryptocurrency, an unrealized gain of $33 in Real Estate Crowdfunding, and an added $10,689 in cash from bonus/stimulus money.
Our spending was up, and we could have done a much better job of saving money. We spent a chunk of change on our August vacation, and experienced a loss of income from my husband that we expect to make up in 2021. I also got a promotion to CFO at work (yay!), so that helped fill the gap.
How did we save money? A year-end bonus of $25,000 was our primary source of savings. Our savings goal for the year was $36,000, and we missed that goal by 31%. I attribute the miss to two primary causes: overspending and the loss of my husband's business with his father in August.
But we still gained 116% on our savings in a year of pandemic. We will celebrate that win by finding ways to cut costs in 2021 and do even better.
Our savings goal for 2021 is $30,000, with an overall liquid investment target of $70,000 by year end.
Current Stock Allocation
As of the time of this writing, our holdings are in the following stocks:
- NYMT (Dividend stock)
- AMD (Growth stock)
- NUAN (Growth stock)
- FBC (Growth stock)
- MGC (Index ETF)
- CRSP (Growth stock)
- SHPD (Dividend ETF)
I plan to research more on dividend stocks this year, and will report what I learn in a future post. The focus will be on companies paying monthly dividends
Our Primary Residence
During the pandemic, remote workers started fleeing dense cities and moving to top-rated communities around the US. We live in one of those – Bend, OR.
We bought our house for $460,000 in September of 2020. Its currently worth $525,000. We will sell it in 2022, so I'm hoping home prices keep appreciating, or at least hold steady for the next year.
The appreciation of our home value was unexpected, but totally welcome. If the price holds until we sell, it will make the execution of our future plans faster and easier. We have a knack for picking undervalued homes – this one appraised at $490k during the purchase process.
Chiefly, we don't buy fixer-uppers – our house is really nice. We look for homes that people are in a hurry to sell, and will often accept a lower price to get them sold. This is a great way to make money if you are willing to move every couple of years.
Always wait 2 years to sell so the profits from the sale are not considered taxable income.
The Bottom Line
2020 was a rocky, emotional year with pitfalls, hurdles, and grief. For us, it was a financial success. Many Americans and people around the world fared much worse. I'm grateful we were able to feed our family, take a vacation, and grow our savings.
Looking forward to 2021, we hope to grow a new business (my husband's project), develop this blog to bring more value to readers, grow our savings, and look at next steps to launch our epic dream (stay tuned).
