October 2014 Net Worth Update

This year is just about over which seems really crazy to me. It feels like only yesterday that I was lying on the beach in Maui, contemplating my next moves in life. At that time, I was getting very much acclimated to the lifestyle I envisioned early FI would look like, and kind of figured that I would just need to grind it out at work for ONLY ONE MORE YEAR

How quickly things change… These days, I’m immersed back into the world of work and engineering again. The hours are long, stress high, and the lifestyle is basically the complete opposite of a beach in Maui.

Short term sacrifice for long-term reward? Well, that’s my story, anyway! Let’s get to the net worth update and see if all these “sacrifices” are making a noticeable difference…

Net Worth

According to Mint, my net worth is currently $716,124.37. This represents an increase of 1.92% from last month ($702,618.90). I’m still using Zillow’s Zestimate to determine the value of my properties.

Screen Shot 2014-11-15 at 9.39.58 AM

Cash

I currently have $11,043.12 stashed away in my checking account ($7,257.38 previously). These are funds I have readily available for investing.

This month, I was FINALLY able to pay off all the debt that I owed my business partners, who helped me come up with funds necessary to close escrow on Rental Property Side Hustle #2.

With that repayment out of the way (courtesy of my $30,000 sign-on bonus at the new job), I should be able to rapidly build up free cash moving forward.

After some debate, I’ve pretty much accepted the fact that I won’t be looking for any more real estate deals. I might possibly attempt a cash out refi on one of my existing Bay Area units, but I don’t anticipate having to save up funds for a new purchase anytime soon. By soon, I mean within the next six months or so.

At this point, I really would like to just hoard cash and get back into buying stocks again. For the better part of 2012-2014, my sole focus has been on rental properties… I purchased 1 rental in 2012, 3 rentals in 2013, and 3 more this year (2 partnership deals). I currently control 7 properties and 9 units total.

I’m going to strive for some more balance now.

Loans

I owe the following loans:

Rental Property #1: $225,192.46
Rental Property #2: $224,777.07
Rental Property #3: $115,729.48

Total: $565,699.01

Investments

I currently own Alibaba (BABA) stock. My other investments are in 401k and Roth IRA.

401k: $127,377.93
Roth IRA: $58,456.96
Brokerage: $13,590.17

Total: $199,425.06

Investments are up this month across the board. The biggest change occurring this month was the rapid ascent of BABA stock. I also purchased an additional 18 shares last week to increase my position to 118 shares.

Properties

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

Rental Property #1: $432,459.00
Rental Property #2: $458,664.00
Rental Property #3: $119,520.00
Rental Property #4: $86,130.00
Rental Property #5: $106,386.00

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 (25%), 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

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 #4: $63,758.01
Rental Property #5: $125,080.41

Total: $1,073,622.92

Rental properties experienced a ton of volatility this month. Rental Property #1 is up noticeably, but the Chicago properties got hammered this month. Rental property #3 is down about $20,000 and Rental Property #5 is down $30,000. Yikes!

But not to fear, because these are income producing properties anyway, so it really doesn’t matter what Zillow thinks…

The good news is that I was able to eliminate my $6,495.66 debt this month! 🙂

Summary

The total value of all assets now checks in at $1,470,689.18, an increase of 0.43% from last month ($1,464,413.94). I also owe $754,564.81.

Overall, the net worth is up this month, but it hasn’t really moved the needle in quite some time. A lot of that has to do with Zillow’s fluctuation in property values, which again swung violently in the negative direction this month. In any case, we will just have to keep on marching forward towards early FI. If the market holds up, who knows, maybe we’ll be able to close in on $1,000,000 before early FI! Who would have thought any of this would even be possible just a few short years ago?

Fight on!

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writing2reality
Guest

The nice thing about your higher income and solid cash flow is the ability to overcome shortfalls quickly. The debt is gone AND you built up your cash a bit further. In six months you should be sitting on a sizable chunk of change, ready to invest further or maintain your existing properties. Thanks for the update!

Leigh
Guest

Woo, up $13.5k! Pretty good 😉 Are you contributing to your 401(k) at your new job? I’m wondering whether I’ll kill my mortgage next year or not. It might turn out that I have just enough funds to pay it off in full next December if I sell my taxable investments and use up all my savings. That seems possibly worth it to have it gone though and it should only take about 3 months to build back up a $20,000 savings buffer at that point. High cash flow = options and freedom, minus the 40 hours a week stuck at a job!

Financial Samurai
Guest

It’s all about the money! Nice increase.

I’m gonna make a bet you will be working for at least 5 more years. Once peopke taste more money, it’s hard to stop.

Martin
Guest

He could work another 5 years, but I bet it would be because he wants not because he musts. It is also my goal to be able to generate enough cash to stop working and work only because I want to work.

Also, I would like to work on making more money trading options than doing engineering (although I like it).

Financial Samurai
Guest

One of the hardest things about reaching financial independence is shunning money. It’s very hard to do b/c money is what gives us findependence, and therefore more money is generally always better.

Martin
Guest

Very nice numbers FI. Congrats on the development of your properties and net worth. I am happy for you!

Jason @ Islands of Investing
Guest

Ah the old ‘one more year!’. It always seems so easy when you have to keep working (like me!), to think ‘if I have enough money to stop, then I definitely will!’, but I just don’t know yet if when I get there I’ll be doing the same ‘one more year’ thing! Must be kind of addictive though to just keep adding to this massive portfolio, and have the luxury to dabble in a few extra Alibaba stocks for example.

Inspiring stuff FI Fighter! Hope you can stay positive and motivated with the engineering job!

A Frugal Family's Journey
Guest

Welcome back to the working class and to stock investing. Just think of it as a road to even better retirement that you last envisioned. 🙂 And way to go with your $30K signing bonus…that is awesome!

Look forward to seeing your next net worth update…I imagine we’ll start seeing your brokerage account balance begin to grow at a quicker rate. 🙂 AFFJ

DoneByForty
Guest

I think you’re doing the right thing by re-focusing on stock investments. Real estate is awesome but an AA balance between the asset classes is really key. Best of all, the cashflow from your units will make the rebalance happen quickly.

No Nonsense Landlord
Guest

Great job so far. As I wind down my last 19+ months to FIRE, I am already planning on some long RV trips across the USA.

I will likely not pay off any additional mortgages, just sock away money in the market.

And never say no more RE deals. You never know when one pops up. And when they do, you need the cash to put it together. Keep your power dry, there are always deals that come up.

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