January 2015 Net Worth Update

by FI Fighter on February 7, 2015

in Net Worth

January 2015 marks the final month of working full-time for me… Moving forward, I don’t anticipate my net worth rising much (if any), barring any substantial appreciation gains. But then again, I may gain approval for short-term disability, which would keep the paychecks flowing in until I’m able to return back to work again…

There are still open items up in the air, but I’m not going to stress myself out too much thinking about them. Of course it would be wonderful to see the Net Worth increasing each and every month… If that doesn’t happen in the short-term, I’ll just have to live with it.

Let’s see how we did in January!

Net Worth

According to Mint, my net worth is currently $785,811.26. This represents an increase of 0.48% from last month ($781,996.44). I’m still using Zillow’s Zestimate to determine the value of my properties.

Screen Shot 2015-02-07 at 8.32.59 PM

Cash

I currently have $12,532.08 stashed away in my checking account ($9,323.02 previously). Due to my cash out refi on Rental Property #2, I didn’t have to make a mortgage payment in January. The lender isn’t requiring a payment on that property until February, so that freed up some cash for me this month.

Also, since I was still employed during this stretch, I was able to save up some cash thanks to three paychecks this month. Moving forward, it’s going to be tough to keep accumulating funds without my W2 income… More than likely, I’m going to have to start dipping into my emergency fund.

But I planned for the worse when I initially asked for a leave of absence…

Loans

I owe the following loans:

Rental Property #1: $223,992.48
Rental Property #3: $114,900.62

Total: $338,893.10

Rental Property #2 was eliminated from the ‘Loans’ section this month. Since I haven’t yet registered my account through Mint, for this month, I am accounting for the new Rental Property #2 loan under the ‘Properties’ tab.

Investments

I currently own stocks in my taxable brokerage account. My other investments are in 401k and Roth IRA.

Current 401k: $4,740.11
401k: $128,046.65
Roth IRA: $59,873.45
Brokerage: $22,084.84

Total: $214,745.05

I added some stocks this month in the form of investments into Chevron (CVX) and Caterpillar (CAT). Stocks are mostly down this month as Alibaba (BABA) is going through tough times right now.

Properties

According to Zillow, here are the values of each property:

Rental Property #1: $478,172.00
Rental Property #2: $475,164.00
Rental Property #3: $118,356.00
Rental Property #4: $86,306.00
Rental Property #5: $101,974.00

To keep track of my side hustle deals, I am simply inputing the downpayment amount. Rather than having to keep track of each property value and dividing out my ownership stake, I’m going to keep this simple and uncomplicated. However, these deals were made with the idea of future appreciation in mind, so ultimately their property values do matter!

Rental Property Side Hustle #1: $24,500.00
Rental Property Side Hustle #2: $32,562.00
Rental Property Side Hustle #3: $35,000.00

The following debts should be listed under the Loans tab, but unfortunately Mint forces manually inputted loans to show up under the Properties tab.

Rental Property #2: $330,000.00
Rental Property #5: $124,447.58

Total: $897,586.42

Rental properties experienced only slight movement this month. The local properties continue to climb up, although more gradual now that the market is finally starting to plateau. The out-of-state rentals are decreasing, although they aren’t dropping as much as in recent months.

Summary

The total value of all assets now checks in at $1,579,311.13, an increase from last month ($1,534,158.81). I also owe $793,499.87.

2015 is getting off to a decent start. With my leave of absence, realistically, I’m not anticipating increasing my net worth too much in the short-term. Not a big deal, and this time off will be a good test to see how the Net Worth survives as I taper off from earned income.

With the cash out refi on Rental Property #1 nearing completion, I should have some more funds to at least keep active in the investment game until I’m ready to go back to work. As I continue to pour more and more funds into acquiring more assets, over the years, the investments should reach a point where they can keep appreciating, even without further active involvement from my end.

I’m not quite there yet, but I’m going to keep working on it.

 

Fight On!

 

2015 Net Worth Summary:

January 2015: $785,811.26

 

2014 Net Worth Summary:

December 2014: $781,996.44

November 2014: $763,680.73

October 2014: $716,124.37

September 2014: $702,618.90

August 2014: $724,476.61

July 2014: $718,780.24

June 2014: $693,514.01

May 2014: $665,115.97

April 2014: $633,456.43

March 2014: $598,435.05

February 2014: $557,154.47

January 2014: $586,137.08

 

2013 Net Worth Summary:

December 2013: $569,022.97

November 2013: $542,725.46

October 2013: $527,010.49

September 2013: $444,860.79

{ 17 comments… read them below or add one }

1 Dividend Growth InvestorNo Gravatar February 8, 2015 at 5:12 am

I hope they give you short-term disability, so that you can get a few months of pay. With the cash you are going to get, you will have the ability to cushion any short-term blows. Since you no longer have a job, do you think you have adequate cash reserves in case your expenses went up, or in case some of the properties require repair and maintenance? And most importantly, do you think you can never hold a job at this stage?

I was also wondering, how reliable are those Zillow zestimates? For some properties I have seen, they are wildly fluctuating all over the place. Of course, without them, you cannot really put a value on those properties ( other than historical cost).

Sorry, I have a lot of questions 🙂 I think that you can probably live on the $2K – $3K from your property “empire” if you retired today, but maybe you need to move to another lower cost place in the US..

Reply

2 FI FighterNo Gravatar February 8, 2015 at 8:31 am

DGI,

In regards to properties, yes, I do have funds set aside for maintenance and repairs…In addition, although I hope it never comes down to this, I do have security deposits for each property… Again, I don’t ever plan on having to touch that.

Right now, I don’t anticipate being away from work for too long… a few months at most… definitely not for a year or something too significant.

Zillow’e estimates aren’t too reliable, but I think they probably average out ok for all 5 of my properties. The Bay Area ones are overvalued, as Zillow prices them around $470k and my recent appraisals show they are closer to $440k.

For the out of state properties, for example, I purchased one in Chicago for $180k and Zillow now shows $101k. So, it doesn’t look like the purchase price is given too much weight… and in this case, the property I purchased was significantly rehabbed which is why it deviates so much from other comps in the area.

I plan on working again… even after I quit my corporate job. Right now, I’m focused on getting better, so I’m avoiding most stresses… even though I’m still making time to blog. In the future, I would like to try writing as a side gig to earn income.

Yes, I agree, $2k to $3k in unstable rental income isn’t feasible for most places in the US… My plans will be to travel overseas first, and then figure out how to live stateside after… Hopefully with some side hustles and rent/dividend appreciation I can make the numbers work.

We’ll see…

All the best!

Reply

3 Dividend Growth InvestorNo Gravatar February 9, 2015 at 9:03 am

Hi FI Fighter,

I am not at all experienced in real estate investing, so I am a little confused as to why you have not included all the extra cash you discuss in your responses to me. I am sure there is probably a reason, I am just curious. Otherwise, I don’t think your net worth is as accurate, if you omit assets. Are there any liabilities that you have omitted as well?

I commend you for posting numbers every month on Net Worth. But I think it might be easier for someone like me to read your balance sheet (Net worth) if you just posted the gross values of each property… And then list below the debts behind each property.. I find the way mint tracks your net worth to be confusing..

I don’t want to sound judgmental at all. I wish you all the best, and I hope that you can earn enough from your rental properties so that you never have to hold a day job. But I find it confusing when you post a Net Worth report, and then you reply that you have money stashed elsewhere.

Best Regards,

Dividend Growth Investor

Reply

4 FI FighterNo Gravatar February 9, 2015 at 9:16 am

DGI,

I have many accounts scattered throughout and Mint can’t access all of them… For instance, my PM in Chicago sets aside a portion of rental income to be used for maintenance reserves… that is not accounted for in Mint.

I also don’t keep tabs of my emergency fund on Mint. Some folks like to tack on their automobiles as well, but I don’t see the need for that…

In regards to liabilities, everything is accounted for except the additional loans on the side hustle deals which my partners signed on for… But I also omitted the property values for those side hustles as well… As mentioned in the report, I simply inputted my own downpayment for the side hustles and nothing more.

The net worth report just provide a general overview… I don’t expect it to be 100% accurate, and I don’t need it to be. The Zestimates are already pretty loose themselves…

Yes, Mint can be very cumbersome, but I’m hoping these latest two cash out refis will be fixed once I register for an online account with the lender… but they require some seasoning first before I have access to the online portal.

All the best!

Reply

5 writing2realityNo Gravatar February 8, 2015 at 6:34 am

Similar to what DGI asked, do you keep some level of emergency cash off your balance sheet above? For me, $13k would seem to be extremely low given the lack of W2 income and the potential downside from owning so many properties. Of course, pulling out the extra $100k would bolster that significantly, just seems to be a bit of a gamble should the refi not materialize as expected.

Reply

6 FI FighterNo Gravatar February 8, 2015 at 8:38 am

Writing2reality,

Yes, I have emergency funds spread out into various accounts that are not accounted for in this report… Without the paychecks, I may have to dip into them if the rental income isn’t sufficient on any given month. The $13k is cash which I can use for investments, or expenses… It’s the first line of defense before having to dip into emergency fund, which is something I never want to touch… But these are special circumstances right now…

To brace myself, I’ve already started clamping down and reducing “luxury” expenses… Luckily, at least the price of gas these days isn’t hurting the wallet so much anymore.

Yes, the $100k will definitely give me peace of mind, which is why I’ve been fighting so hard to get that squared away… With my spending the way it is, $100k would last a very long time… even longer once I depart for my overseas travels.

The refi is in the final stages and i signed off the docs… funding should occur next week. Fingers crossed!

All the best!

Reply

7 No Nonsense LandlordNo Gravatar February 8, 2015 at 8:25 am

Are you planning on going back full-time at some point? Or going to wing it from here?

Good thing you were able to cash out now, while you still had a full time income. Often, banks frown on giving out loans to a person without a job.

Best of luck.

Reply

8 FI FighterNo Gravatar February 8, 2015 at 8:43 am

Eric,

Yes, I plan on returning to work in a few months… I have a pretty sweet gig, so it would make sense to go back and accumulate some more funds.

Also, yes, definitely, the cash out refi wouldn’t be possible without the W2 income… Should the earned income stop, no lender will want to deal with me… I had to make sure everything was aligned prior to putting in the leave of absence… I’m not in the clear yet, but will feel a great sense of relief once funding takes place. Hopefully next week since all the papers have been signed…

Take care!

Reply

9 Midwestern LandlordNo Gravatar February 8, 2015 at 10:18 am

Some others seem to be a little concerned about your long term financial viability without a W2 job moving forward; I am not in that camp. It really comes down to creativity, flexibility, and keeping the personal monthly nut at a reasonable figure which you have done. Even without the upcoming cash out refinance, you have a lot of tools at your discretion. The ongoing rental income is the foundation, but you have around $228,000 in liquidity not including some off balance sheet funds that you have discussed. For someone who is expense conscious, this buffer seems more than enough to get through a rough patch if it were to occur. Also, there are other ways to make side money once the corporate job has ended. As has been discussed, sitting on the couch and doing nothing the rest of your life after the corporate job ends is probably not in the plan. Having freedom to do what you want is in the plan.

Reply

10 FI FighterNo Gravatar February 9, 2015 at 4:38 pm

Midwestern Landlord,

I very much agree with your outlook on life and early FI… I definitely also feel that the end of corporate life isn’t the end of making money… Life is never quite so binary, and like you said, if you can manage to stay creative and flexible, many new doors will open up.

When you put things in that perspective, yup, cutting the cord doesn’t seem quite as scary… It’s tough to really ever know when enough is enough, and I’ve heard enough varying viewpoints to make my head spin… I’ve heard you need a minimum of $2MM in net worth… to how come you haven’t retired yet… or last year?

The key is to maintain a modest lifestyle and not go overboard… To achieve early FI takes a lot of discipline and I’ve always sort of felt that if a person can do that, they have the necessary discipline in place to succeed. It takes a lot of mental rewiring to buy into the low expense, high savings rate compromise we all make to build wealth.

Then again, building wealth is pretty addicting stuff and sort of a hobby now… If I have any excess funds, I’ll probably just invest it anyway… It’s habitual now 🙂

All the best!

Reply

11 Midwestern LandlordNo Gravatar February 9, 2015 at 9:21 pm

FI Fighter,

In the big picture, you are doing great. To be only 30 years old and on the brink of FI is a great accomplishment. It took me until I was 38. Regarding timing, only you can decide that. But just based upon what I have learned about you from your blog, I have no doubt that you could declare FI at any time moving forward. It boils down to what you want and how you want to live. That is an extremely personal decision.

For me, it had nothing to do with net worth. It had to do with cash flow. When my cash flow exceeded my personal expenses (with a buffer included), it was time to move on from my corporate job.

Reply

12 TawcanNo Gravatar February 9, 2015 at 10:49 am

Good to hear that you plan to go back to work after a few months of rest. Also it’s good to see that you have reserve money allocated. Your health is very important, take care of it first before worrying about other stuff.

Reply

13 Super StockerNo Gravatar February 9, 2015 at 5:44 pm

I noticed you are investing in CVX. I only agree the oil industry is a good investment for stocks. However, I would recommend that you take a look at ConocoPhilips (COP). It has a higher dividend and it follows a more conservative stance towards the lower oil prices. They are following Plan B which considers that oil will remain low for awhile before moving back up. Cheveron (CVX) is still following Plan A which follows that the oil prices will only go up from here. It may mean you have less return but isn’t the first thing about investing is to “don’t lose money.”

Reply

14 Gen Y Finance GuyNo Gravatar February 10, 2015 at 3:39 pm

I know you mentioned the $100k would you are pulling out in your cash out refi would last a long time with respect to covering your living expenses. But it also sounds like you plan to use this money to in the stock market as well.

What is the plan if the stock market turns sour or if for some reason (and not saying it will happen) a couple of your places go un-rented for a few months.

Whats the Plan B?

Reply

15 EvanNo Gravatar February 12, 2015 at 7:10 am

It may be too late now, but why not use that cash out Refi to bolster income? For example if you paid off Real Estate Property #5’s mortgage – how much more would that provide in terms of income?

Also, whenever you do go back to work you should try and see if you can get some personal DI (if you are insurable still).

Reply

16 JohnNo Gravatar February 14, 2015 at 10:30 pm

I forgot but do you actually own a home in the bay area or do you rent?

Reply

17 Al HarrisNo Gravatar February 15, 2015 at 8:02 am

I was in a similare 401(k) situation last year until I studied and implemented my solo 401(k), now that money is sitting in rental properties in Milwaukee rather than on the stock exchange.
Property #4 closed for $3,765.00, I plan on doing around $3,735.00 as the current tenants are not fussy about improvements.

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