The State of our Finances

I had some tweets today that touched on my very first blog post, in which I talk about my catalyst to start changing my life around. It took a while for things to get going, but I finally feel like we are heading in a positive direction and that I am catching up with my age peers (I am currently 36 years old).

The whole purpose of this blog is to capture my journey towards achieving the “elusive” $1M net worth. Beyond periodic net worth updates (most throughout the twitter account these days), I think it would be valuable to post more specifics about the “state of our finances” periodically. So, here we go:

Income:

W2: We are a single-income family, with my wife staying home with our child. I currently make just under $125K as a K-12 administrator, and will be making $131K as of July 1st, 2021.

Real Estate: We currently have three investment properties (two were recently acquired in March/April 2021). All of them are rented and have the below gross cashflow:

Investment Property #1: $7,500 per year

Investment Property #2: $7,680 per year

Investment Property #3: $9,240 per year

Side Hustle: I do not currently have a steady side hustle income, but in 2020 I generated $3,400 from teaching at a community college, $200 from writing articles about stocks, and $1.50 from Amazon associates commission (every little bit counts, ok?). I could continue leveraging these in the future, but onboarding my new properties combined with continued pressure related to COVID-19 at my W2 job has kept me from making progress here in 2021.

Total income: 

W2:         $125,000 (soon to be $131,000)

Real Estate: $24,420

Side Hustle: $0 (for now)

Total Income: $149,420

Savings

Our savings rate is not the best, but we are aggressively saving towards the acquisition of real estate properties. The majority of our money is being saved for that purpose at the moment:

$24,420 from real estate cash flow towards additional real estate investing

$13,500 from the W2 job towards real estate investing

$3,250 from the W2 job towards a 403b account invested in index funds

Total: $41,170 

Savings rate: 27.55%

Note: In addition to the savings mentioned above, I contribute 11% of my salary towards a compulsory pension system. If I retired from this system, I will be able to receive a pension of 80% of my salary. The jury is out on whether I’ll be around that long. While I would get my money back if I leave the pension system before retirement, I don’t count those contributions as savings. 

Assets and Liabilities

We see our primary path to $1M being through the acquisition of cash flowing assets, mainly real estate. Our first deal was a very successful BRRRR deal, which I discuss on this post. We have since purchased two additional properties, and don’t plan to stop anytime soon (although I promised my wife in 2024 we will improve our primary home).

Real Estate:

Primary Residence:

Estimated Value $427,227

Mortgage         $284,458

Investment Property #1:

Estimated Value $320,232

Mortgage         $250,066

Investment Property #2:

Estimated Value $296,749

Mortgage         $236,000

Investment Property #3:

Estimated Value $265,740

Mortgage         $208,000

Real Estate Summary:

Total Real Estate Value $1,309,948.00

Total Real Estate Loans $979,524.48

Total Real Estate Equity $331,423.52  (25.30% equity)

Other Financial Assets:

Real Estate Investing Pool $10,283

Roth IRA                 $72,328

Roth 403b         $12,548

Other Assets:

Vehicle (2015 Nissan) $4,772

Liabilities:

Student Loans         $33,701

Total Net Worth         $397,653.26, or 39.77% of $1M goal

The below chart depicts our net worth growth since we started tracking it right before acquiring our first property. Real estate has helped us tremendously with this growth! We are happy with the progress thus far, but also very eager to continue growing. Be sure to continue following follow the journey on Twitter and here on the blog!

Note: If you are interested in learning more about the BRRRR real estate investment method, this is the best book there is about it: BRRRR Made Simple