Moving on to Romeo's question, it was disappointing to see a drop of about 13% on the 2022 net worth statement, even after saving 30% – maxing out his Roth IRA, 401k, and after-tax savings. Am I doing something wrong? Talk me off the ledge here.
Yes, you are doing something wrong, and this is what it is: you're not thinking about this the right way. You're not thinking about this the right way because he said, 'Romeo said he had a 30% savings rate.' Right? 30% savings rate in a year where the market went down – I mean, it's just a broad number, about 20%, right? A significant pull-down in 2022. I would think about that 30% of my income that I was plowing into the market. I was buying cheaper and cheaper and cheaper and cheaper and cheaper. I was loading that spring. And like, if I didn't know – I don't encourage you to do entry or net worth because I like big surprises at the end of the year, but I bet if you looked at your statements as of today, halfway through 2023, all that money that you saved last year is probably looking pretty good right now. So, while you are in the accumulation phase, while you are still building your portfolio, volatility is your friend and downturns are your opportunity. Financial mutants will look at that and say, 'Man, this is the year where the dollars are made. This is where things get exciting. You don't care about the year-over-year if it goes down 13% because you know that means that when it pops, if I've loaded that spring, that uptick on the next up year when it turns around, if I keep saving, it's going to get really, really, really exciting.'
I keep trying to get this to stick and I'm going to use it again. When this type of stuff happens, it just means your portfolio is in concentrate. You know what I mean by that? You know, think about when you're a kid – oh, I know – you used to have to mix your orange juice. You used to come in little containers, and you'd have to mix it with water. You know, it was still orange juice, but it was just concentrated. And that's what happens to your portfolio when you go through down markets. It doesn't mean the value – you know what it actually – the total intrinsic value has gone away. What it means is that the Crazy Prices that get yelled at you every day on what it's worth has just had some fluctuations. I've brought in Warren Buffett's Farm Story with my own orange concentrate story, but it doesn't mean, Romeo, that necessarily the value was lost. It just means that it's been compressed down – hence the spring that Bo is talking about.
I will tell you, here's another life experience share. With charitable giving post-2008, you know what shares – when you do specific gifts, it cracked me up when you – when you looked at what shares it wanted to give, always were those shares that were at the lowest points. Because when you look at what happened to the market in 2008 and then the recovery – because remember, and I'm going to do this because I'm not old, and I'll pull old stats because that's what I remember and I think the number is even higher – the first 12 months after recovery pre-2008, it was like 26.2%. If you add it up now, I think post-2008, that number sprang up to, like, 33% or something like that. And the majority of that happened in the first two or three months. So, I would tell you, Romeo, look, we're in this period where we still have this cloud over the economy. We're still waiting to see what the Federal Reserve does with interest rates, what happens with inflation. But here's what I know: the law of acceleration, law of accelerating returns. And you look at, you know, just like we were ushered in the internet, we ushered in the mobile phone stage where everything computers went in our pocket. We got all kinds of new stuff coming in with artificial intelligence and other things. There's going to be ways to make money off of that. And you're going to see that your portfolio that, yes, was down or flat during 2022, which was not a good financial year, it's going to – you're going to look at that, and it's going to be some of your best performing shares.
I want to give you one other piece of advice, one way to, like, flip the script and think about this differently. Find a community where you can talk about this kind of stuff, and you can hear from other folks. Because you realize most folks last year, their net worth went down. Like, a lot of folks. If it's a testament to how big your portfolio is, if a downturn in the stock market causes your net worth to go down, that's a testament that you've done a really good job saving. You've built up a significant net worth that actually downturns do affect you. What's great is when you can talk with other mutants about that. Now, I don't know about you, but most of your friends, you probably can't say, 'Hey, what's your net worth? How did you do last year? How much did you save?' But you know where you can do that? In our Financial Mutant Facebook group. It's a private group available for you guys that have purchased courses, that have purchased products, so that you can talk to folks. 'Hey, you know, last year my net worth went down. Anybody else seeing that?' And what you're going to hear is, 'Oh yeah, mine did too. Mine did. Mine did.' And you're going to hear people that are going through the same exact thing but are excited because they know what the rest of the story is going to look like. So, I would encourage you, instead of getting lost in your own mind, surround yourself with folks who can also say, 'Man, I'm doing the same stuff, making the same hard decisions, building on the same path and the same journey as you are. It's going to be okay. We're going to rock this thing, and we're all going to retire together. Kumbaya.' For more information, check out our free resources