My Investing Plan for 2022...

So it's that time of year. Time to start making plans and setting goals for 2022, because yes, we only have two weeks left in 2021. It's pretty ridiculous if you ask me. But in this video, I'm going to be running through my full investing plan for next year. So where am I going to put my money and why? We're going to talk about my current position, where my money is invested, and how that's going to change, or not change, in the year ahead.

So hope you guys enjoy the video. I also just want to give you a heads up that I'm going to be away for the Christmas period. So actually, this should be my first week off since before the pandemic. Can you believe that? In fact, it might even be longer; it might even be the year before. So I'm going to go down to Adelaide. I'm going to hang out with my family there and have a good time.

It might be a little bit lighter on with content on the channel. My plan is to still have some content for you guys while I'm away, maybe just some Q&A videos. But I just won't be able to react to breaking news, that sort of thing, if something major happens because I'm not taking any of my equipment or anything. So there'll be some stuff, and if you do see that stuff pop up, I'll just really appreciate you guys giving that content a watch just to keep the channel humming so that I can take a bit of a break. I honestly, I'd really appreciate that.

But yeah, next year's gonna be big. We hit the ground running real fast, real hard, real fast in 2022. But with that said, my investing plan for 2022, let's discuss.

So if you don't follow the channel closely, most of my investing is in the stock market. I am a long-term Buffett-style value investor. I understand real estate at a basic level, and I have made one real estate investment there. But that's really just going to be like where I live in, say, the next five years. It probably won't start out its life as an investment property. So I'm not a huge property investor or anything like that.

You know, I don't currently invest in bonds either, but honestly, like, why would you when you can get any sort of return anywhere else? And they're kind of your three big investing classes when it comes to cash-producing assets: stocks, bonds, and real estate. So I'm mainly going to look towards stocks over anything else in 2022. But I'm already getting a little bit ahead of myself.

What does my portfolio currently look like? Well, as you can see here, this is my current position. So this is the portfolio of my assets, and you might actually notice that I don't include my channel there. The reason for that is because it's basically impossible to sell the channel. So while it's valuable from an income point of view, I don't actually put a dollar value on it as an asset.

Actually, I haven't even valued profit for what it potentially could be sold for. That percentage is just basically the value of the assets and the cash on the books. But anyway, here we are. Firstly, I should say, you know, please don't read into these percentages too much. For example, like last year would have been like 80% cash and stocks with practically nothing else.

But because of things like Profitful's performance over the past year and because of the apartment that I bought, they now take up a larger percentage, and my stock portfolio occupies a smaller percentage. But anyway, this is currently my portfolio of assets: 32% taken up by Profitful, 32% taken up by my apartment, we have 4% in passive investing, 20% in individual stocks, and 11% in cash.

So with that said, where am I going to be putting my income next year? Obviously, I don't really want to hold it as cash, so what am I going to do with it? Well, ideally, I want to invest lots of money into the stock market. But as Warren Buffett says, you know, the immediate prospects for that are not good; prices are sky-high for businesses possessing decent long-term prospects.

Call me old-fashioned here, but one of the key pillars of my value investing strategy is to buy really solid companies but buy them only at prices that are well below intrinsic value. And you know, while yes, you can always find bargains in any market and there are opportunities out there, personally, I'm not really finding a huge amount of enticing deals within my circle of competence, which is frustrating.

But I do know enough about investing temperament, thankfully, to know that I should definitely not start just drifting outside my circle of competence just to chase something that seems cheap. So, you know, while I would like to substantially invest in the stock market in 2022, I'm not sure I'll be given those great opportunities to buy.

You know, however, having said that, in 2022, we will likely see inflation continue to bite, stimulus stop, and rate hikes beginning, which may cause some turmoil in the markets, particularly because right now we are seeing pretty extreme overvaluation. As I said, you know, it doesn't take much to pop a severely over-inflated balloon, right? But of course, that's just a maybe.

Honestly, if things just continue as they are, I just don't think I'll get many opportunities to buy great companies at discounts to intrinsic value. So chances are I probably won't be doing too much active investing, which makes me sad because obviously that's what I like doing the most. But having said that, one thing I will continue to do is invest passively.

I will continue to buy my select few market tracking ETFs every single quarter, and you might say, "What? Why would you buy a market tracking ETF when you just said the market is extremely overvalued?" But the reason for this is because you know passive investing is all about following a very specific strategy called dollar-cost averaging.

For passive investors, their goal is simply to participate in the broader market and just reap the benefits of a long investing time period, like two or three decades. The goal of the strategy is simply to get the average annual return of the market over time, which ends up being 7-8%.

But you know, in order to achieve the goal of getting the average, you have to continue to invest frequently. So you're investing during the highs, the lows, and everything in between. So a lot of people do this, you know, every quarter; that's personally what I do. But increasingly with new apps and brokerage-free websites, automated investing apps catching on these days, really, you can just do it every week if you wanted to.

You just set it up so that your brokerage-free app buys you a few market tracking ETF shares, you know, every Tuesday. It's really easier than it has ever been to implement. But honestly, I still just do it manually every three months, log in, buy some shares, and yeah, passive investing is still definitely my plan for next year.

You know, even though in the current market I probably won't be buying a whole bunch of individual businesses, I will still absolutely be buying into my ETFs. A quick note, you know, if that sounds like maybe the style of investing that you're interested in implementing yourself, then Six Park, sponsor of this video, might be worth a look.

But anyway, yeah, passive investing will definitely continue, although it's only like 20% of the stock market investing that I do. But man, fingers crossed, I can put more cash into individual businesses next year. Just seems unlikely at this point, which is unfortunate.

But with that said, there is one place my money is definitely being invested next year, and in fact, I imagine most of my income in 2022 will be invested here. The stock market is unlikely, more property is unlikely, bonds are unlikely. But I mean, you want to put your cash somewhere, right? I do not want to keep my income as cash and just let inflation destroy a big chunk of its value.

So what do you do? Well, as you guys know, I run two businesses: obviously, New Money and Profitful. The return on invested capital for both of those businesses is extremely high. You know, so far, for every dollar that I put into, say, the YouTube channel, I probably get about three dollars back, and that is assuming that my time costs at least kind of $80,000 a year.

And for Profitful, it's even better. So for that reason, in 2022, I’m pretty much going to spend every spare cent I can find on growing those two businesses. For example, as I said in my recent channel update video, next year I'll be hiring social media managers, researchers, editors, etc., for the YouTube channel. And then on Profitful's end, I'm also looking to completely rebuild that site and create a lot more content for it.

Not only will these moves help me create better YouTube videos for you guys to watch and create better courses for Profitful, etc., but it will also hopefully provide really solid investment returns. You know, if the current business model and the track record for both of these businesses is anything to go by, then in fact, I should, in all honesty, probably just forget about the stock market next year and just focus a lot on these two businesses.

Because you know, while stock market investing is very powerful, if you can get like 20% returns per year, then you're doing amazing. But especially when it comes to very small businesses—well, very small in the grand scheme of things—then it's not out of the realm of possibility to 2x or 3x your entire company in, say, a 12-month period if you play your cards right.

So because I potentially have an opportunity like that, and the track record of the channel and of Profitful suggests an outcome like that is possible, that's naturally where I want to spend my money in 2022. And if things go well, honestly, I want to keep that investment going. I want to spend as little money as possible, you know, keeping myself alive, and I want to spend as much money as possible on expansion.

And you know, hopefully that leads to increased video quality, which leads to increased viewership, which leads to increased revenue, and then we can just—it's essentially just a snowball, and we're just trying to kick it faster down the hill.

So anyway, guys, that is kind of how I'm looking to invest in 2022. I'll have to make another one of these videos in 12 months' time to see how I went. I got pretty optimistic goals; I'm not someone to die wondering. So overall, I think that's just the honest truth of where I think my money is going.

I hope that we get a massive stock market crash and all these businesses that are in my circle of competence have just been thrown at me for very cheap valuations. I hope that happens. But I think realistically, it's just very hard to find returns at the moment.

But I think because of, you know, it's just my own personal situation and circumstance, it's just these businesses that I've got—they're worth pushing as hard as possible, and they probably deserve more capital to be thrown at them. I've just been running a pretty tight ship over the past couple of years with both those businesses.

But anyway, that's how I'm going to be investing most likely in 2022. Of course, nothing's set in stone; it could change. It just depends on what situation we get thrown at us next year. But I'd love to hear, how are you guys going about your investing next year, or what do you feel as though you'll be looking at doing more of or investing in more in 2022? Let me know that stuff down in the comment section below; I'd love to hear from you guys.

As always, leave a like on the video if you did enjoy it. Subscribe to the channel if you're new around here and you have not subscribed. Still, a massive fat percentage of my viewership on the channel is not subscribed. So I mean, if you're at this point in the video, you're still watching, then just hit the subscribe button; I would appreciate it.

Anyway, guys, check out Profitful down in the description below if you wanted to check out some of the courses I've made about my investing strategies—active and passive investing. But that's about it for today, guys. Thank you as always for watching, and I'll see you all in the next video.