October 2016 Net Worth Update

 

This is my official October 2016 Net Worth Update. Below are my actual numbers for ALL my investments and liabilities as of 10/31/2016. Detailed explanations and a quick summary can be found below. If you would like to see my previous months net worth posts, please visit my Net Worth Tracker.  I have been tracking my net worth monthly since May 2015.  If you want to learn how to track your net worth then check out how I am doing it.

How To Track Net Worth

 

How to track your net worth

 

 

TOTAL NET WORTH: $440,586

Quick Summary and comments: +$15,398

It has now been almost a year and a half since I started tracking my net worth.  I started off back in May 2015 with a net worth of $310k and have now built it up to $440k.   It has not been easy and I have had a few down months but the truth of the matter is that the main reason my net worth has increased is simply because of the real estate I have purchased.   I truly think investing in real estate is the best way for an average person like myself to be able to reach financial freedom.

This month I saw a big bump in my net worth.  If you look at the spreadsheet above you can see that my cash position went down  A LOT!!  Why?  Well because I am happy to report that I have BOUGHT ANOTHER RENTAL PROPERTY in cash!   That’s right folks, another one.   If you read my last net worth update post you will see that I purchased a new rental property last month, well this month I have purchased another.   For this new one which I will write about in more detail soon, it was a wholesale fixer upper house for $65k.  I am putting in about $17k in repairs to make it a really nice rental and I think it will be worth at least $100k when its complete here in the next few weeks.   For conservative reasons, I have it priced at $85k right now on this spreadsheet until I run real comps on it in January.   In January, I will re-evaluate the retail values of each of my properties and update my net worth accordingly.  I am planning on seeing a big bump when I do this because of my primary home that I live in which I know is worth a lot more than $100k, and this new rental property which I think is worth about $100k after my rehab.

The $15k net worth increase is not all because of my new rental property though, what you can’t see in the spreadsheet is that I have already spent about $15k in rehab costs on the new rental.  What has compensated for my cash position not dropping even more is that fact that I have been getting paid by Amazon!  And I received a quarterly bonus from my dreadful day job.   All this has helped me see a big increase for the month of October which is great.

Here is some additional info on my personal life and amazon fba business for those of you interested.

Personal Life Update – I have now been living in Indy for three months after making this drastic move to help me reach financial independence early.  We still love living here and are enjoying my first real autumn in about 15 years.   I love the trees, the colors and the weather this time of year.  This past month I have kept extremely busy purchasing my new rental property as well as coordinating the rehab for it.  Hopefully I will be done with the rehab on this new property in 2 to 3 weeks so that I can officially list this property for rent.

Amazon FBA Update –  My amazon business has been doing pretty good as far as I can tell.  I have now been selling my private label product for just over two months and have sold 336 units as of today.  I’m averaging about 5 or 6 sales a day and have been paid out by Amazon already close to $7k.   If you remember by the numbers in my last amazon update, I am all in to this business for about $17k.   Once I make $10k more I will officially break even.  The good news is that I still have 634 units available for sale and at $38, that means over $23k in sales.    I will be writing a detailed post about my amazon update this month so stay tuned.    You can check out all the posts I have ever written about my Amazon FBA business here.

Okay enough about my personal life. Now let’s get to the breakdown of each asset.

 

Assets: Explanations of each of my assets.oct-2016-net-worth-update

Cash: $65,570

I bought the new rental property for $65k, have spent about $15k in rehab costs already which put a huge dent in my cash.  Fortunately, I also received a quarterly bonus from my day job and I have seen some nice payments from Amazon for my private label selling business.   So yes, this huge drop is because of the rental purchase but it would have been much worse if it wasn’t for my bonus/amazon payments.   Considering my net worth went up because of the added value in my new rental, I am very pleased with this.

My cash as noted above in the spreadsheet consists of my wife and I’s checking account.  My REI (Real Estate Investing) checking account as well as my separate Amazon business checking account. Satisfied!

HSA account: +$126

Slight increase in my HSA account from my paycheck contributions. Nothing crazy.

My HSA deductible is $1300 for the year and I have close over $5k in this account so with that being said, since I am maxed out already with my yearly deductible, I don’t see a need right now for depositing more funds.  I am only taking a very small amount out from my day job paycheck to fund this account. Any money after that deductible will just sit in that account not making me money. I know I can use the money that I don’t put in there to get better returns as long as I invest it in more real estate. This number should increase each month a tiny bit. Satisfied!

Company Stock Options: –$1,159

Stocks in general have been really wild lately.  Not sure if its related to the whole election thing with Trump and Clinton but I have seen a decline in ALL my stocks.

These are stock options from my day job. I am fully vested. I will end up selling a bunch of these in the future if it hits a certain price. If I do sell, I would like to use the money to buy another rental property. I’m not in a hurry to sell it so I will play along with the market and see what happens. Satisfied!

Stock Portfolio: –$3,391

The majority of my stock portfolio is built of precious metal mining stocks.   They have been on a huge upswing since I bought them and overall I am up.   However the past few months have seen steady declines and this past month it really took a nose dive.  I’m not worried about it at all though, i’m just planning on riding it out.  I think 2017 will be a good year for these stocks.

I bought all my shares using tradeKing.         Satisfied!

401K: -$144

I made an executive decision awhile back to take money out of my 401k and no longer contribute any more money to it. Mainly because I do not get matched contributions from the dreadful day job. But also because I KNOW I can make better returns using that money on rental properties. I really don’t like the idea of having an account that punishes me to take money out because of age. Satisfied!

Property # 1

This is my new primary house which is actually one of my older turnkey rental properties that I have purchased.   I moved into this rental because I love the location, the size of the house and because my mortgage on it is less than half of what I was paying when I was living in Austin, TX.    Super Satisfied! Here are more details on when I originally bought this one as a rental property.

Grow your net worth today with your FREE Personal Capital account.

Property # 2

This is the property I self manage in Austin.   Even now that I live in Indy, I will continue self managing this one.  I think I can do it from afar and if in the future I realize that I can not continue being my own property manager, then I will probably just find a PM to handle it.   So far everything is going great.  I have not heard a peep out of them and they are locked in for 2 years so I’m hoping this one is a cash cow for the next few years.  Rent paid on time and no repair calls.

This is my first rental property. It used to be my primary residence at one point. I expect gradual appreciation from this property because it is in the suburbs Austin which has been growing tremendously.  Love me some HOT markets! 150K is about what its worth now based on MLS comparisons. Satisfied!

Property # 3

Rent paid on time and received one repair call to dig out a piece of rebar from the back yard.  I was going to dig this out myself but we received a call from the tenant a few days later indicating they dug it out themselves.   All is good now, rent paid on time.

This is my first turnkey rental property I purchased out-of-state in Indianapolis. I do not expect much appreciation on this property. I purchased this for CASH FLOW purposes only. Satisfied!

Property # 4

Rent paid on time every single month and haven’t had any repairs on this since the last one which all went down when I fired my property manager from.    The tenant is happy, the PM is happy and I am happy.  Hopefully I will continue to not have anymore problems with this one now that we have resolved all the issues we had before with the plumbing and the horrible PM.

This my 2nd turnkey rental property in Indianapolis I do not expect much appreciation on this property. I purchased this for CASH FLOW purposes only. Satisfied!

Property # 5

Mortgage paid on time. No issues. This is a note that I own from a house that I sold via owner finance in the Austin area.  If you notice though, the reason why this asset will continue to go down from the spreadsheet above is because it is a note and the principal balance on it goes down each month as the buyer pays me. Remember, I’m the lender on this one. Satisfied!

Property # 6

I had my first tenant turnover on this one.   The existing tenant actually left a month early however he waited for a new tenant to be filled by the PM before he left.   So although I have a new tenant, I actually didn’t have any vacancy on this one.   Which is amazing!!  I did have to pay the cost of one month’s rent to the PM though for finding a new qualified tenant.   This is the last turnkey rental property I purchased located in the Kansas City area.  I bought this in late October 2015. I purchased this property also for CASH FLOW purposes only. I am not expecting appreciation gains on this one. Satisfied!




Liabilities: These are self-explanatory so I wont dive too deep into these however I would like to include the items below for informational purposes.

Credit Card

I only use one credit card (rewards card) that I use to purchase my everyday expenses. I pay this off in full every month. I am receiving 1.5% cash back on this card and am very pleased with it. Satisfied!

Car Loan

I purchased this vehicle before I had the proper knowledge on how to be totally awesome with finance and investments so that is the only reason why I have this loan. If I knew then what I knew now, i would have purchased a used vehicle all cash. It is not worth it to me to pay this loan off because the interest rate on this loan is 2% and I would rather use that money to buy more rentals where I will make a much greater return. I will continue to pay it down slowly. Satisfied!

Last 30 days net worth graph from Personal Capital

I really do love this chart, it looks great and its nice and big. The big dip you see at the end is from when I bought my new rental property cash, then it goes back up after I added it as a new asset in the account.  Good stuff!

 

personal capital net worth update

If you want to set up and track your net worth online like I do, create a FREE account at Personal Capital.

There you have it folks! How was your month? Subscribe here if you would like to receive emails on future posts including more net worth updates.

Please show some love by sharing this article.

Cash Flow Diaries

30 Comments

  1. Wow – a $15K increase over one month is awesome! How do you like living in Indy? My job may relocate me there eventually if I stay with the company…

    Those are also amazing results with you FBA work. You must have items strewn all over the place 🙂
    Derek @ MoneyAhoy.com recently posted…How to Setup a WordPress SiteMy Profile

    • Hi Derek!! Im loving living in Indy so far. It has been easy for my wife and I so far because we have made some really good friends already which helps the transition a lot. Plus we really enjoy doing things and exploring the city so living super close to downtown is making the experience better.

      Let me know if you end up moving to Indy, we can meet up.

    • Hi Beth!! Thanks so much for checking out my updates. I have been fortunate enough to have things go my way lately but I need to stay humble and prepare for bad things. Its always good to not get blind sided you know. Mainly on having cash reserves to handle emergency situations with all these rental properties I have.

      Oh Beth!! The whole reason why I do what I do is to eventually leave the dreaded day job!! Hahaha. I think I need 3 or 4 more rental properties to give me enough passive income before I quit the day job. To be honest, Im glad you mention it because I really need to sit down and crunch some numbers to see how much passive income I get now. Im losing track.

  2. Congrats on another property! I also agree real estate (and specifically rental properties) are the best way for an average person to get ahead financially. More people need to connect the dots and figure out the saving / 401k approach isn’t getting them anywhere.

    Are you going to continue to keep your eye out for wholesale deals or check back later when you are ready for another?
    Brian – Rental Mindset recently posted…What the Heck is an Investment Thesis and Why You Need to KnowMy Profile

    • Thanks Brian!! I have a feeling the 401ks out there are going to take a huge turn for the worse in the coming years. Oh yeah Im definitely going to keep my eye out on wholesale deals. I love looking at the deals and running numbers. To be honest, I had one come my way just this past week that I wanted to buy but I just dont have the funds anymore for it. I need to really start figuring out ways to get creative and buy with no money down.

    • Yes my favorite thing to do is add another rental property to my portfolio! I went a whole year without adding one and adding these 2 new ones in the last 6 weeks or so has been really awesome!

      You know I actually have not mapped out a long term plan quite yet for adding more properties but I will begin thinking about it as soon as I am done rehabbing this new one and have it rented out.

  3. Congratulations on your Amazon FBA business really taking off! That’s a classic example of hard work and research pouncing on opportunities available. I’m in the accumulation phase and putting it in the stock market so I don’t have the money to look for business opportunities, but one day I’m hoping to put it all to good use 🙂
    Finance Solver recently posted…Environment Matters Most to Career SuccessMy Profile

    • Thanks FS!! Im glad I did the amazon thing for sure and I will be even happier once I get all the money I initially invested and start seeing the profit! I think being in the accumulation phase is a good place to be and im pulling for you to make the right decisions in that crazy stock market. 🙂

  4. Congrats on the steady progress, Alexander! I have not seen your updates in a while and was very impressed. You really are attacking the is thing from multiple angles – job, real estate, moving, Amazon biz, blog. I love that hustle! Keep up the awesome work.

    • Hey Chad!! Thanks bud. Yeah I have been hitting it hard recently trying to speed up my early retirement. Just need to keep at it! Im highly motivated.

  5. Hi Alexander,

    Awesome details! Thank you for sharing. How many rental properties are you targeting to have on your portfolio? What is the monthly positive cash flow you are targeting to achieve?

    –Michael

    • Hi Michael! I havent quite figured out the exact number of rentals I want to own eventually however I want to be making close to $10k per month in passive income before I quit my day job and live my dream life.

  6. Sweet. A new property! Congrats, Alexander.

    How’s FBA going now with all the TOS changes at Amazon? Sounds like you’ve already got some good momentum, so new reviews probably aren’t a huge deal for you. I missed getting my first product into their warehouse by 2 days. Now I have to wait until after the holiday rush (ie. mid-Dec.). Ah well, I’ve got plenty of other things to preoccupy me while I wait. 🙂
    Michael @ Financially Alert recently posted…Financial Blunders So Thoughtless, It’s Scary!My Profile

    • Sweet indeed!! LOL Well I got lucky with the whole FBA thing because i started before all those changes and have been even more lucky that they have not pulled my reviews. Fortunately I have been able to get a handful of normal reviews after I started selling so when amazon pulls all my product incentive reviews which Im sure they will, its just a matter of time, then Ill just have to hope that my sales stay the same.

      That is too bad you missed the holiday shipment rule, I read about that and thought it was crazy! You’ll have to keep me informed after the holidays on how it goes.

    • Thanks Mrs Bita! I own one index fund but it doesnt yield any income. 🙁 Im actually waiting on the market to bottom out before I dump a bunch more money into my stocks which may be years from now but ill be patient. I really like rental properties because of the passive income and its a great way to reach FIRE.

      Thanks for stopping by!

    • Thanks MSM!. Well I think it will jump at least $50k. Probably more. 🙂

    • I have 6 rental properties right now and they are all SFHs. I think its great that you have a 4 plex! You should consider getting a property manager, would make your life a lot easier.

  7. 15k net worth increase plus a new rental property? Sounds like you had a great October! I’m not counting with so many rentals in my portfolio for the future, but I think your example clearly shows that real estate shouldn’t be forgotten from a well diversified portfolio.
    Keep up the good job!
    Roadrunner recently posted…Rent or Buy? – Part 4 (Mortgage Length)My Profile

    • Awesome! Thanks Julie!! Rental properties are a great way to make some additional income and diversify your investment portfolio.

  8. Awesome ! It is really nice to see how you are killing it based on your hard work. I am wondering at some point if you are going to have to get a property manager? Between the job, Amazon, and the rental properties your free time must be getting squeezed. Looking forward to reading upcoming posts to see how many more you are buying. Cheers !

    -Brian
    Pluggingandplaying recently posted…October DividendsMy Profile

    • Thanks Brian!! Oh yeah I have a property manger on most of my rentals. Eventually I will have a PM on ALL my rentals. I only currently manage 1 property right now and it doesnt take up anytime at all. I rarely ever hear from those tenants.

  9. This detailed breakdown is awesome. May I ask how old you are? I don’t remember reading a post where you have said. Austin Texas looks like a great market to be a real estate investor in given the college and tons of young people flocking to the city. ALSO – I am so happy to hear that you are satisfied with your tenants. I have a rental property in Chicago in a nice area, but I have had nothing but problem tenants! It makes a huge difference I am sure. I have spent so much time dealing with tenants who look great on paper, but end up being terrible. Even with a property manager I still lost about 5 months rent so I lost money on the property last year. But thankfully the value of the property did increase by 25% in one year based on market growth so there is that! Thanks for sharing. I look forward to seeing Novembers update.

    • Thanks MM!! Im 37 years old. Austin in my opinion WAS a great market to be a real estate investor. At least a buy and hold investor. Back when I first moved there 14 years ago, i regret not buying as many houses as I could. The prices there are now inflated and makes it extremely difficult to find any cash flow at all. Its great for flips as long as it continues to appreciate. I personally dont like to gamble on appreciation without at least a little cash flow.

      That is horrible about your tenant issue. Even a great PM cant always find a great tenant. Its tough, fortunately I havent had to deal with a really bad tenant and ill keep my fingers crossed to delay that.

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge