It’s been a long time coming, but the moment has finally arrived… I am pleased to share with readers that as of this month, I am officially (on paper) a member of the millionaire’s club! 🙂
I just came to this realization about 5 minutes ago (once I finished crunching numbers for this month’s Net Worth report)… Right now, it’s way too early to say how I feel about this accomplishment. If anything, it all just feels surreal…
Ultimately, the main objective of this journey is to reach early financial independence. For the most part, we are all just digging our heads into the sand and working hard towards that underlying goal. In the process, we will achieve small victories here and there, and the milestones start to add up.
Well, today I reached a rather BIG milestone (at least in my book). Sure, $1MM doesn’t buy quite what it used to, but it’s still a major accomplishment for many people out there. So, I won’t try and downplay this special moment… There’s still a lot of work to do, but I think it’s important for us to stop every once in awhile and appreciate what we’ve accomplished along the way.
Without further ado, here are the nitty gritty details for this month:
Here is where my Net Worth stands at the conclusion of June:
Here is a breakdown of assets:
Here is a breakdown of debts:
Cash and Credit Cards
I currently have $19,682.00 stashed away in my checking account ($27,014.83 previously). Cash decreased this month as I paid down some bills and additional mortgages to give myself some more breathing room.
I owe $0 in credit card debt.
I have $99,311.62 hidden away for a rainy day, or for future investment opportunities. My emergency fund is now sitting at a level that I am very comfortable with, moving forward into the future. Now that I’ve basically secured my baseline target of $100,000, I believe that I will be able to get back into investing in the very near future. Although I still feel like the markets (as a whole) are overvalued, I now feel comfortable enough with my backup plan to allow myself the confidence to proceed forward. I don’t plan on buying any more real estate, but stocks and other commodities will definitely be on my radar again.
I owe the following loans:
Rental Property #1: $323,777.71
Rental Property #2: $327,308.48
Rental Property #3: $114,226.27
Rental Property #5: $123,326.73
Rental Property #4 is owned outright and there is no loan associated with it.
Side Hustle Loans
Rental Property #SH 1 (25%): $387,490.33 ($96,872.58)
Rental Property #SH 2 (25%): $385,989.96 ($96,497.49)
Rental Property #SH 3 (50%): $403,331.26 ($201,665.63)
Total: $1,177,975.74 ($395,035.70)
My portion of the Side Hustle loans are accounted for above. My partnership stake in each property is shown in the ( ).
I currently own stocks in my taxable brokerage account. My other investments are in 401k and Roth IRA.
Current 401k: $4,956.03
Roth IRA: $60,422.39
Stocks were down this month which dragged down my 401k and Roth IRA investments. Also, I liquidated my stock positions in Coca-Cola (KO) and Toronto-Dominion Bank (TD) this month, transferring the funds back out into my emergency fund.
I am just about done with liquidating stocks… Right now, I only own the following dividend stocks: Norfolk Southern (NSC), Union Pacific (UNP), and Walmart (WMT). I have about $15,000 allocated into these three positions.
Alibaba (BABA) is still my largest individual position… The stock is in the doghouse right now, so I’m holding out for a better opportunity to sell. Now that I’ve been able to build up my emergency fund to a level that I feel secure with (~$100,000), I’m less inclined (than before) to sell. At this moment in time, I’m not in a rush to liquidate. If I do, I would like to transfer the proceeds back into some income producing assets, instead.
Here are the values of each property, based on my own estimate:
Rental Property #1: $490,000
Rental Property #2: $490,000
Rental Property #3: $157,500
Rental Property #4: $95,000
Rental Property #5: $180,000
Properties were reassessed, which explains the large delta experienced this month. In general, I try to be as conservative as possible with my projections. Based on sales comps, Rental Property #1 and Rental Property #2 are probably sitting closer to $510,000. To be on the safe side, I went with $490,000.
For Rental Property #3-5, I elected to stick with the original purchase price. These properties are located in the Midwest, and the neighborhoods I invested in don’t appreciate quite so rapidly as the Bay Area. Again, to err on the side of conservative, I’ve decided it’s best to just stick to the original purchase price.
For properties, I will refrain from updating the values each and every month. Instead, I will review and re-assess quarterly, to allow sufficient time for the market prices to stabilize.
My last reassessment was June 2015. The next property assessment is scheduled for September 2015.
Side Hustle Properties
Rental Property Side Hustle #1 (25%): $550,000 ($137,500)
Rental Property Side Hustle #2 (25%): $580,000 ($145,000)
Rental Property Side Hustle #3 (50%): $520,000 ($260,000)
Total: $1,570,000.00 ($542,500.00)
The side hustle properties were also reassessed this month. The latest comp for Rental Property SH #1 recently sold for $630,000 (the buyer grossly overpaid). Rental Property SH #2 could probably sell for about $650,000 in the current market environment. Lastly, the latest comp for Rental Property SH #3 closed escrow at $560,000.
Using conservative figures, I pegged each of the side hustle properties to what I believe is fair market value (not based on irrational exuberance which some recent comps are clearly based off of).
My portion of the Side Hustle equity is accounted for above. My partnership stake in each property is shown in the ( ).
The total value of all assets now checks in at $2,317,769.31, an increase from last month ($2,223,692.26). I also owe $1,283,674.89.
Well, that will do it! In a span of less than 4 years (since we first embarked on the journey to early FI in February of 2012), I’ve gone from owning 0 properties to having an ownership stake in 8 properties. And in the process, I’ve been able to clear a childhood goal of mine by obtaining a net worth of $1,000,000!
I realize that when it comes to early FI, the name of the game is cash flow and NOT net worth. Nevertheless, it’s a great feeling to be able to build up both important parameters to freedom… Besides, an increasing net worth is never a bad thing! If it holds steady, one can always convert net worth to cash flow…
Thanks to the Fed (low interest rates) and Quantitative Easing, I’ve been able to aggressively buy up properties and stocks over the last few years, and snatch up some bargain bin discounts. Since 2012, stocks and real estate have only continued surging, so I was fortunate to be able to ride that wave all the way back up…
In essence, that’s how I built my net worth and became a millionaire… Buy low… and I did sell some stocks “high”. Along the way, I’ll never deny that luck was a HUGE component in my success. For myself, it was definitely much more luck than brains… So, I’m most thankful for good fortune! 🙂
Now that the first million is out of the way, I guess we continue marching on and set our eyes on the next big target — $2MM! 😉
I’m sort of at a loss for words right now, so I will follow up on this post with a less disjointed one next week.
Happy 4th of July everyone! It’s fitting that I will be celebrating this new milestone on Independence Day!
May freedom reign!
2015 Net Worth Summary:
June 2015: $1,034,094.42
2014 Net Worth Summary:
2013 Net Worth Summary: