January 2014 Net Worth Update

We’re already into the second month of 2014, so that means I’m one month closer to retirement! Things were pretty quiet again this month, as I’m still working on closing Rental Property #5. The good news is that I now have enough funds in my accounts to satisfy the underwriter. As soon as the property closes, and I pay off the remainder of my Hawaii bill, I’ll be going full swing into rebuilding my cash reserves.

Net Worth

According to Mint, my net worth is currently $586,137.08. This represents an increase of 3.0% from last month ($569,022.97). I’m still using Zillow’s Zestimate to determine the value of my properties.

January_2014_Net_Worth

Cash

I currently have $63,103.03 in cash sitting in my primary checking account. Last month ended with $48,329.27, so I’ve made some good progress in coming up with the funds needed to close Rental Property #5. When I first got into contract, I had originally only anticipated needing to come up with a 25% downpayment. Since the underwriting guidelines now require 30% (this is my fifth rental), it forced me ramp up the savings in a hurry.

How did I come up with the extra funds so quickly? I didn’t pay off my mortgage bills on Rental Properties #1-4 this month. No, I’m not delinquent on any payments to the lender, and I wonder never do something like that! Actually, I am about three months ahead on each property, so skipping one month was within reason (See next paragraph). Once the dust settles, I will try even harder to keep pre-paying the mortgages in advance so that my next due date is pushed out even further into the future. Before I check out of the game for good, I would like to be at least one year ahead in mortgage payments, for each rental.

The credit card bills are close to $7000. This is a combination of Hawaii and Vanilla Reload cards. Have no fear, the bulk of the bill is in Vanilla Reloads that will be paid off with the cash flow coming in for February. I used Vanilla cards to make those “missed” mortgage payments. So, although the lender thinks I paid this month, I did “miss” those mortgage payments since the Vanilla balance is still there. No, I didn’t go out and splurge on some new toys… and although Hawaii was expensive, it didn’t cost me an arm and a leg either.

Quite simply, I’m just shuffling money around to accommodate for closing. Everything should return to normal next month.

Loans

I owe the following loans:

Rental Property #1: $228,247.76
Rental Property #2: $228,173.78
Rental Property #3: $117,023.82

Total: $573,445.36

Investments

I currently own no individual stocks. My only investments are in 401k and Roth IRA.

401k: $100,220.46
Roth IRA: $50,966.67
Brokerage: $4.65
Other Brokerage: $0.03

Total: $151,191.81

Investments are down for the retirement accounts this month as the stock market starts to cool off. Last month ended with investments valued at $154,705.25. That’s ok, I’m not sweating the fluctuations… These are retirement plans, after all.

Properties

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

Rental Property #1: $466,738.00
Rental Property #2: $361,532.00
Rental Property #3: $152,360.00
Rental Property #4: $80,706.00

Debt: $45,000
Rental Property #4: $64,173.48

Total: $952,162.52

Again, most of the rental properties are holding steady in value, but Rental Property #1 is up again, closing at $466,738, an increase of about $12,000 from last month ($454,165.00). The other rentals are roughly the same, although I am noticing that Rental Property #2 has dropped in value, for a third consecutive month. I believe this is contrary to reality, since Rental Property #2 is by far located in the best location out of all my properties.

Summary

The total value of all assets now checks in at $1,275,630.84, an increase of 1.73% from last month ($1,253,982.52). I also owe $689,593.76. Let’s close Rental Property #5, and start rebuilding the cash reserves!

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writing2reality
Guest

Nice work FI! I’m sure it will feel good to get this next property closed. When would you anticipate buying the sixth property considering you are also focusing on building your cash reserves?

Sundeep
Guest
Sundeep

Awesome job getting to this point man. I wonder if you’ve thought about swapping out the two California properties for some better cash flowing out of state properties? Similar to swapping out DGI stocks once they’ve run up I’m value…maybe another way to maximize your returns.

Regardless, keep it up!

Done by Forty
Guest

A 3% increase in one month is preposterously awesome, especially since the stock market struggled in that month. Well done!

JC @ Passive-Income-Pursuit
Guest

I can’t believe you have almost $1.3 mill in assets now. That’s amazing even if there is debt attached to it. If there wasn’t commission involved you could take a flyer on a penny stock with that $4.68 in your brokerage accounts.

The First Million is the Hardest
Guest

$1.2mm in assets and a round the world trip booked. Life is good, eh? Keep it up!

Martin
Guest

Fighter, you are a magician! When reading your posts about how you do this or that, it all looks like a piece of cake! One would want to jump on the same wagon too.

Are you really only one month (closer) to retirement? 🙂

Good job!

Leigh
Guest

Why do you pay the mortgages early rather than keeping a cash buffer around? Are you worried you would spend it? That would also make it easier to have a cash buffer around to satisfy the underwriters.

Eric
Guest
Eric

You are making progress, but here are some things to think about. I assume that the tenants deposits are somewhere, safe from being spent by you. And NOT included in your checking balance.

Do not prepay mortgages, especially a year in advance. Pay extra if you want. Set them up on auto-pay. Make sure they get paid. Get rid of any credit card balances. If you are paying .01 in interest on credit cards, you are living too high on the hog.

Keep up the good work. Make sure you can handle the mortgage payments for at least 6 months, even if you get $0 in rent. If you cannot, save more, skip the trip.

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Derek Olsen
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Wow! All this before the age of 30. Way to go!

Thanks for posting all this juicy info. I really appreciate it and support what you are doing. Keep it up.

My wife and I just started posting our numbers. Thanks for leading the way.

-Derek

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