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.
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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.
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!
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.
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.
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!
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!
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.