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I’m 28 Years Old, Control $1,000,000+ in Assets, and am $578,740.76 in Good Debt!

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Gold piggy bank on money

How’s that for a summary of my current financial status? Don’t let the numbers scare you, I’m still saving as aggressively as ever. Yes, the debt is ballooning… but I’m not worried. Unlike congress, I’ve got everything under control! In fact, it’s all going according to plan.

The Assets

Although I am not quite near being ready to retire just yet, I am making progress and headed in the right direction. I haven’t posted an update regarding my net worth in quite some time… mostly because everytime I check it on it shows my debt balance being more negative than the last time! 🙁

Since I first started my real estate investing journey, I’ve been borrowing more and more money to fund each transaction. Even though my total balance owed is increasing, the corollary is that the total value of my controlled assets is also rapidly rising.

Here is a breakdown of assets:

401k and Roth IRA:   $143,070.50
Stocks:                     $12,162.66
Rental Property #1:  $400,000
Rental Property #2:  $400,000
Rental Property #3:  $160,000

Grand Total: $1,115,233.16

Stocks are actual values as of closing on July 26, 2013. Rental Property numbers are what the appraised value would most likely be today (somewhat conservative estimates).

And how much they pay me:

401k and Roth IRA:   $240/month
Stocks:                        $0/month
Rental Property #1:  $2090/month
Rental Property #2:  $2150/month
Rental Property #3:  $2050/month

Grand Total: $6530/month or $78,360/year

Using gross numbers, my yearly yield is 7.02%. This is pretty good, considering my stocks (TSLA) are currently paying me $0 in income.

The Debt Numbers

Obviously, if I was actually receiving $6530/month in net cash flow, I’d already be retired and relaxing on the beach! 😉 But because I’m borrowing so much money, that’s not the case. However, here’s a quote I truly believe in:

What you owe today, you’ll be worth tomorrow.”

Like planting a tree, it’ll take many years before I can harvest the fruit. All in due time. I know if I put in the work now, I’ll reap all the rewards later. The sooner your start the journey, the better off your future self will be.

Here are the scary debt numbers:

Rental Property #1: $230,507.99
Rental Property #2: $230,107.77
Rental Property #3: $118,125.00

Grand Total: $578,740.76

These debt numbers might seem daunting at first. And they definitely eat into my returns since the mortgages are so high. But that’s just temporary. As readers are well aware, I’m a huge fan of leverage because I believe it’s what will ultimately set me free sooner rather than later. Even better, even though I’m on the books for more than half a million dollars (yikes), ultimately, I’m not going to be the one to pay it back! This monumental task will be distributed amongst my current and future tenants.

And really, that’s what sets real estate investing apart from all other investment vehicles out there. To become wealthy, you MUST own valuable assets. Anyone seeking to become wealthy must partake in an arm’s race to acquire as many valuable assets as possible. Leverage will allow you to become wealthy over time as you gain more and more control of ownership over each piece of asset that you own. Eventually, with full 100% control, you will owe zero debt. That’s when the real fun begins!

Cash Flow

Even with all this debt, my rental properties are all cash flow positive. After all payments, my net cash flow looks as follows:

Cash Flow:

401k and Roth IRA:   $240/month
Stocks:                        $0/month
Rental Property #1:  $460/month
Rental Property #2:  $330/month
Rental Property #3:  $620/month

Grand Total: $1650/month or $19,800/year

For rental properties, numbers were calculated without factoring in reserves for vacancy and maintenance. So, these numbers are more optimistic than conservative. Still, my original early FI target was just $1500/month, so it looks like I’m pretty close to reaching my original goal (need to exclude 401k + Roth IRA cash flow). Before I exit the rat race for good, I’d like to be at over $2000/month.

Next stop, Rental Property #4! Let’s do this!

And in closing, my net worth is now… *drumroll*…

Net Worth: $536,492.40

{ 24 comments… add one }
  • Dan23No Gravatar July 28, 2013, 2:51 pm

    Congratulations! The speed of your property accumulation is quite impressive. Quibbler that I am, a lot of the net worth you are stating seems to be based on unrealized appreciation. For property 1, you purchased it for 315K and are valuing it at 400K. While you may be one of the few who is realistic, just about everyone who purchases properly tends to say pretty quickly that it is worth a lot more than the purchase price (often justifying it using appraisals). I am generally skeptical of them until a sale happens, though if appraisal based, as I suspect your estimates are, it at least allows additional borrowing. In addition, if you sold, there would be transactions costs (potential broker fee + potential property transfer taxes + potential lost rent + tax on profit if you do not do 1031 exchange and actually want the cash).

    If you actually are convinced that selling property 1, for example would realize 400k, will you sell it, in order to buy a higher cap rate property in the near future? Cap rate on 400k of property 1 assuming 1/3 expense is 4.2%( 2090*12*2/3/400k), assuming 50% expenses is 3.1%, both which are quite low. Property 2 has a similarly low cap rate on your current valuation.

  • FI FighterNo Gravatar July 28, 2013, 3:07 pm


    Thanks for the great comment! In all honesty, the net worth # means absolutely nothing to me. It’s worthless really b/c at the end of the day, all that matters is the cash flow/month.

    Originally, I was going to just use the purchase price as the full rental property value, but adjusted it to the “appraised” value since I know prices have risen by 20 to 30% this year in the Bay Area. The purchase price # wouldn’t be accurate today. Even the $400k number for Rental #1 and Rental #2 are conservative… Rental #2’s neighbor just sold for $420k and it is a smaller unit.

    What I’m definitely not doing it pumping up the numbers just to give myself an ego boost or pat on the back. Appreciation is meaningless unless you sell or do a 1031 exchange, like you mentioned. I would either do a 1031 or live in one of the rentals for 2 years to avoid capital gains. No use in paying so much in taxes when it’s completely avoidable.

    If I do sell, yes, I know of many other alternatives to invest in. I love my Bay Area properties but I’ll be the first to admit that they don’t cash flow all that well. Rental #2 is probably my best purchase, but it cash flows the least… I do place a strong emphasis on securing quality properties though. With Rental #2 I have peace of mind. I know I can rent that unit out in a matter of days. And over time, I do anticipate that unit bringing me much more cash flow. It could easily rent for $200 more each month, but I opted to give the current tenant a discount.


    • Dan23No Gravatar July 29, 2013, 3:04 pm

      Thanks for the response. Did you initially buy either of rental 1 or 2 to live in? If not, what led to you buying them-pure cashflow investment decision or other factors. If I understand correctly 1 and 2 are local and 3 is out of state. Is 3 the only one that you bought turnkey?

      • FI FighterNo Gravatar July 29, 2013, 6:55 pm


        I purchased Rental #1 and Rental #2 with the idea that I might want to live in there someday. Since it cash flowed, and interest rates were so low, I figured it would be a solid investment.

        From a pure investment point of view, I probably overpaid since the returns are not so great. As always, real estate returns are relative to individual markets. However, since I can see myself living there someday, it was worth “overpaying” for.

        Yep, Rental’s #1 and #2 are local in the Bay Area. Rental #3 is in Chicago. Actually, all my properties are turnkey. I fully rehabbed Rental #2. Rental #1 needed no work. I guess you could say I’m the opposite of a slumlord. I like to take care of my tenants as best I can.


  • The StoicNo Gravatar July 28, 2013, 6:20 pm

    Impressive FI!!

    I’m enjoying keeping up with the progress in your real estate investments. Keep the updates coming!!

  • FI FighterNo Gravatar July 28, 2013, 9:06 pm


    Thanks! Great job on the rehab so far. It’s awesome seeing everything come together for you.


  • Compounding IncomeNo Gravatar July 28, 2013, 9:30 pm

    Wow that’s a nice cash flow you have there! The net worth number is meaningless you mentioned. I don’t know why people are obsessed with it. I think it stems from foolish people getting into debt then looking at it in reverse when it’s paid off.

    You’re a tycoon in the making. Have you stopped the 401k and IRA yet? Why wait 31.5 more years to see the money, you’re getting close my friend!

    • FI FighterNo Gravatar July 29, 2013, 6:46 pm


      Thanks! I agree with you that the net worth number is pretty meaningless. I think people obsess over it b/c it’s something relatively easy to track and it’s an easy way to chart “progress”.

      For someone who uses leverage, it gets even more complicated. I’m just going to do the simple thing and focus on cash flow. Every month and every year, I want my cash flow increasing. If that happens, I’m doing something right.

      I’ve stopped both 401k and Roth IRA. If I have money left over at the end of tax season, I’ll fund the Roth. I maxed out around $5000 on the 401k. I think I’m done for good. Don’t think I need any more funds in retirement accounts at this point. Gotta focus on the early FI now!


  • Dividend investing MartinNo Gravatar July 28, 2013, 9:46 pm

    Fighter, I don’t think you will go wrong. If you manage your cash flows carefully, stay frugal, save aggressively you will get rewarded tremendously (and I want you to be my friend, because you will be very rich). You are buying your properties still fairly at the bottom or near to it. I believe that in 5 or 10 years from now (if not sooner) all those properties will gain a lot of equity, which can provide you with a great cushion. So if anything goes wrong, you will be able to sell with gain. As I know you so far, you are not an idiot who has no clue what he is doing, so you will be fine… very fine. I am happy for your endeavor and success.

    • FI FighterNo Gravatar July 29, 2013, 6:58 pm


      I appreciate the kind words. And yes, when playing with leverage, one always has to be extra careful. I’m aware that another recession could have catastrophic consequences. Since I’m so heavily focused on the accumulation side of things right now, I’m not really able to fill out the other portion of my plan. But eventually, I will work on building huge cash reserves to weather any economic storms. There’s a plan in place, I just need to execute. 🙂

      Glad to have you along for the ride, my friend!


  • LeighNo Gravatar July 28, 2013, 10:27 pm

    It’s so cool to see your net worth number at last 🙂 My place would probably appraise for $50k more than what I have it set at in my net worth, but I’m leaving it at purchase price so that I won’t take a hit of the closing fees on my net worth when I sell…

    I’m curious to see how the next few years pan out for you since we’re taking such different paths to FI! I don’t know about your stock investments, but mine ran up quite a bit this month. It’s insane how much my 401(k) is up this month (I think almost $5k including my regular 1/12 of $17,500 contribution)! It’s crazy how much cheaper that midwest property was than your Bay Area ones!

    • LeighNo Gravatar July 28, 2013, 10:28 pm

      P.S. When I saw the $536,500 net worth number I went and checked my forecasting spreadsheet and I think I should hit that around age 27 or so 😉

      • FI FighterNo Gravatar July 29, 2013, 7:01 pm


        No surprises there. You’ll be light years ahead of me when you get to my age, I’m sure of it. 🙂

    • FI FighterNo Gravatar July 29, 2013, 7:01 pm


      There you go, just for you! Yeah, I’m not surprised your condo would appraise for so much more, especially since you live in a desirable location.

      One way to cut out fees would be to get a real estate license to sell your own properties. This is something I plan on doing. I want to cut out as many middlemen as possible 😉

      Yeah, stocks have been doing great. 401k and Roth are up big time this year. TSLA is also up 300% since May, so I’ve been enjoying that ride up.

      Midwest is the place to be for investors. Cash flow is great and property prices are cheap. What more could you want?

      Take care!

  • PaulineNo Gravatar July 29, 2013, 1:59 pm

    I love that quote. Great job on letting your tenants build wealth for you. That is an impressive cash flow already, well done!

    • FI FighterNo Gravatar July 29, 2013, 7:03 pm


      That quote is my new mantra, along with a few other ones. Yeah, I’m learning that money (and other people) are capable of working much harder than I possibly can. After 6 years of the grind, I’m ready to call it a day.


  • IntegratorNo Gravatar July 30, 2013, 4:30 pm

    Nice going on the asset accumulation. Like you I’m not averse to using leverage to accumulate income producing assets, though $576K sounds like a pretty big number :). I think the greatest amount of debt I’ve had was about $250k on my stocks a few years ago. The good thing with property is that there are no margin calls to my knowledge, so you can afford to just sit and ride it out and let your tenants keep paying off your debt.

    • FI FighterNo Gravatar August 1, 2013, 10:14 pm


      Thanks! You and I are a lot alike — we are big fans of leverage 🙂

      The debt is quite a lot, so I try not to think about it. And that’s exactly the plan, let it cash flow and have the tenants pay it off. Without risk, there’s no reward. All investments are risky. You just have to try and mitigate the risks as best you can. Since I want to check out by 30, I need to take bigger chances.


  • EvanNo Gravatar August 7, 2013, 12:30 pm

    Have you had any RE problems? I only ask b/c 20k per year of cash flow today (I know that isn’t what you are focused on) doesn’t seem worth it for the headaches that have to come with 3 properties? Or maybe I am just showing my wuss ways lol

    • FI FighterNo Gravatar August 8, 2013, 10:04 pm


      So far, so good. I’m hiring a property manager to handle the out of state investment. The cash-on-cash returns are awesome (compared to other common investment vehicles), so I think the extra “headaches” are worth it. I love real estate. It’s been very lucrative and is helping me achieve my dreams.


  • StevenNo Gravatar December 27, 2013, 7:58 am

    I’m a little new to your blog, but so far I’m enjoying the content. Can you elaborate a little on your end goal. Is the plan to replace your income with cash flow from rentals, investments, etc?

    My track is to have the cash flow equivalent to my salary with no debt, this will be done with 2 rental properties, small side business, investments will be treated as my Retirement Bonus at age 60. Like your plan mine is growing as I am as well.

  • flipping strategyNo Gravatar August 29, 2014, 9:18 am

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    I have a blog based on the same information you discuss and
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