- Hey, friends.
In this video, I'll go through what I plan to do
with my money in 2022.
And I know that it can sometimes be helpful
to hear what other people are doing
and why they're doing it.
So here you go.
Every year I sit down a few weeks before the new year
to decide what my investment plan is going to be
over the next 12 months.
Personally, I'm not someone who has any interest
in over-complicating my investments.
Now it might seem like the more money you have,
the more you need to put it into random things
like watches, cars, fine China, angel investing,
NFTs or Pokemon cards just to diversify.
But in my opinion, that's a load of BS.
The more of that garbage you own,
the more time you're gonna have to spend
at worrying about it all.
Keep it simple if that's what fits your personality.
I know there's a lot of things that can change
within that short amount of time.
So I like to leave a little bit of room
for those out of the ordinary scenarios,
like what happened in early 2020,
but I'll talk more about that later in the video.
I've decided that over the next year,
I'll be putting all of my money
into the highest quality investment
like the ARK Flagship ETF.
Think about it.
With Cathy Wood claiming her fund is going to deliver
a 40% compound annual rate of return
during the next five years,
how could you not wanna go all in on her ETF?
- What! - Shoot,
she must really believe in the stocks
that she buys because the ARK ETF has a turnover ratio
of wait for it, 71%.
- What! (Jarrad laughs)
- That means that she sells 71% of the stocks
that she buys within a one-year time period.
I'm literally laughing because it's funny.
It sounds to me like someone might have some, I dunno,
commitment issues, am I right?
Okay, okay.
I'm poking a little too much fun at this person,
so I'll stop now.
I bet she's a really great gal,
but not great enough for me to trust even a penny
of my money in her disruptive, innovative, world-changing,
insert every other buzz word ETF.
The first thing I'm gonna be doing is an investment,
but only if it's done properly
and that is remodeling my kitchen.
This thing has needed done for so long
because it's extremely outdated and extremely ugly.
So I figured, hey, the best time to dish this money out
is of course, when I'm jobless.
If there's one good place to spend money
when remodeling portions of a home,
the kitchen is close to the top of the list.
According to a few places that I checked out,
an 80 to 85% return is what you can expect.
But there's something else that I have to keep in mind
during this process as well.
The current plan is to rent this place out
whenever I buy my next house.
Because of that, I have to make sure
not to over-improve the property to the point
where I won't get a decent return on investment.
On the other hand, I don't wanna under-improve the property
to put this house at the bottom of the rental range
that I'll be expecting.
To figure out this sweet spot, I've done a couple of things.
First, I looked at a ton of comparable rental properties
in the area to get an idea of what the homes look like
and what they're charging.
The second thing that I did was reach out
to two different real estate investors in my area
to have them come by, to give me their thoughts.
I'm fairly new to this whole thing,
so I wanted to talk to a few people
who have way more experience than me.
The third thing that I did was look at comparable homes
in the area to see what they're selling for
and what the insides look like.
Even though I don't intend to sell the home
once I move onto my next place,
I added this part of the process in because I'm a,
what you would call a backup plan kind of guy.
I'm one of those people who wants to know
where the nearest exit is in a place that I go into,
just in case I need to dip out really fast.
In all seriousness though,
I know that a lot of things can change between now
and when I start renting the home.
For all I know, I'll meet the woman of my dreams
and having a rental property won't make sense at that time.
So just in case, I wanna make sure that this home
is able to be sold at the highest end possible.
Right now, I'm planning on spending around $15,000.
Now this will upgrade the kitchen enough
to where I can get the higher range of rental prices,
and also fix a few things
that I don't personally have the skills to do on my own.
I'm, of course, going to try to keep that amount
as low as possible.
But if I go a little above that $15,000,
then we should still be good from an investment perspective.
Index Fund ETFs will continue to be my bread and butter
for the year, but I plan to make one slight change.
I'm officially going into the year
owning zero individual stocks
and holy smokes, does it feel good.
Right before the end of the year,
I offloaded the last few free shares that I received
from Robinhood over the past couple of years.
For whatever reason, I'm less likely to pay attention to,
or even worry about the price
of an index fund ETF that I own,
which is one of the big reasons that I prefer
that asset class over all of the others.
The only investments that I hold right now
are spread between the S&P 500
and total stock market index fund.
Can anybody say boomer alert?
Even though I'm a big fan
of the three fund investment portfolio,
I haven't actually started holding international stocks
or bonds yet.
Link to check out that video is above my head
and in the description of this video.
But this year have decided to start allocating a portion
of my money into an international ETF.
Yes, I'm finally going global, baby.
- Prestige.
Worldwide, wide, wide.
- It's taken me a while to get to a point
where I wanna add them into the mix
because I just look back at how US-based companies
have absolutely clobbered international over the years.
For the longest time, I've convinced myself
that I don't need to add international
because if I own something
like the total U.S. stock market index fund,
then I'm kind of already investing internationally
because a lot of the bigger stocks do business,
of course, globally.
While that technically is true,
I'm still missing out on the true international stocks
that are located outside of the U.S.
I've definitely become a victim of home country bias.
It's when an investor looks at investments
within their own country as superior
to anything outside of it.
Could international continue to underperform the U.S.?
Absolutely.
Will that most likely cause me to miss out
on some of the upside?
Absolutely.
But I'm willing to give up a little bit
of that potential juice to diversify my overall portfolio
more than what it is right now.
Just to be clear, I'm not allocating a large percentage
to international at this point in time.
Heck in my Top 5 Vanguard ETF video,
I mentioned how I would personally avoid
the Vanguard total World ETF
because it holds 40% international,
which I think is absolutely bananas.
For now, I'm going to rebalance my retirement account
so that 5% is international,
then slowly get up to probably about 10 to 15%
at some point in time in the future, beyond 2022.
So it's gonna take me years to get up to that 10 to 15%.
Other than this international allocation,
the rest of my money going into the stock market
will be towards the boring, boomer, total stock market
and S&P 500 index funds.
I also plan to invest some money
into a few other various things outside
of the stock market and real estate.
The first is putting some money
into the Private Financial independence community
that we started at the beginning of January.
This will mainly go towards giving more value to the members
and to help grow the community.
Link is in the description to check that out
if you're interested.
On top of that, I'll be investing more money
into different areas of education for myself
that I think will pay off in the future.
Now, these will be in the form of different hobbies,
courses, and books as well.
I don't have any plans to purchase
any additional cryptocurrency.
I'm currently happy and content with what I own right now.
Right now I have a little bit more cash on hand
than I normally do.
The only reason for this
is because I'm in the middle of a mini-retirement
at the moment.
If things get weird out there, then this will benefit me
because I'll put some of it to good use.
Once I decide to stop being a bum and go back to work,
this money will be deployed back into the stock market
or real estate.
Make sure to hit that thumbs up button before you go,
check out the description for more resources
and playlist to help out
with all of your financial independence
and investing needs.
I'll see you in the next one, friends.
Wait for it, done.
(upbeat music)