Based in Los Angeles, The Money Smiths is a blog comprised of thoughts related to personal finances, real estate investing, and musings on early retirement.

Net Worth Update #4: October 2018

Net Worth Update #4: October 2018

You can check out my latest net worth update here.

You can also find my personal net worth template here.

This has been another busy month for us, and I’ve also been trying to visualize the data in a way that’s a little more interesting, so let’s jump right into the numbers.

Assets

Primary Bank Account: $11,356.75

Change from last month: (-582.68)

This account is still acting as a holding account for us, as it always has. I’m expecting this number to drop significantly next month, as we weren’t paying down our bills as aggressively in anticipation of our move.

Savings Account: $5,255.73

Change from last month: +208.21

The way this account has been steadily rising has been great. We continue to add $200/month into it and it continues to print a few extra dollars in interest. I was expecting to dip into this account since we have a bathroom renovation kicking off today, but if it works out and we don’t have to move this money to have to pay the contractor, I’ll be perfectly happy. Another note with this account is that it just increased the interest rate again, (this happened last month as well), and we’re now receiving 2.05%! I know that’s still small money, but it’s nice that our funds aren’t being 100% wasted sitting around.

401k: $63,178.45

Change from last month: (-3,229.98)

The markets have not been kind to us this month, and this is a pretty big swing down. I’m hopeful that this will make a swing back, but it’s reasons like this month that make me weary of investing in stocks. The only reason we put money into our 401(k)’s is because we get an employer match. The amount at which our 401(k) value dropped was over 5% - That’s pretty significant losses, considering that there’s nothing I could have done to prevent them. (For more info on my thoughts about investing in stocks, check out this post).

 

Lending Club: $796.55

Change from last month: +61.56

We're still keeping our semi-monthly injection of $25 per paycheck going into this account.  I’ve noticed that this account has started to pick up speed with it’s gains lately. Granted, we never had a ton of money in it, but now that there’s a steady flow of loans actively cycling through, I find myself logging in every few days to send more money out there into the world, which is a good thing! The fact that my current annualized return is over 12% also doesn’t hurt.

Lending Club 11032018.PNG

 

S Pine Street: $375,000.00

Change from last month: None

No changes here from a value standpoint, still just waiting to get to that glorious 20% equity mark in our property. Once we get there we’ll be able to look at refinancing into a traditional mortgage and removing the $246 dollar PMI payment that hits us every month. That will also unlock the ability to potentially tap into the equity in our home for some cheaper financing options that will allow us to buy properties quicker. For now though, we just keep plugging along.

The value of this home is likely going up as we’re renovating a bathroom right now, but that won’t reflect in the numbers until the next appraisal. Separately, with lease renewals and new tenants, the monthly income from this house will be increased $150 by January - up to $4,400 total!

Total Assets: $455,587.48

Change from last month: (-3,542.89)

Assets 11032018.PNG

Liabilities

Mortgage: $351,048.89

Change from last month: (-635.55)

Another payment sent, another small nudge in the right direction. As mentioned above, the ability for this property to make more money is improving! I think part of this lends itself to the fact that our rents have likely been below market for a while, but more income never hurts. You can learn more about our investment property here.

 

Student Loans: $20,977.63

Change from last month: (-314.55)

These loans aren’t going down at an impressive rate, but that’s because they aren’t our current focus for pay-off. These loans also represent the lowest interest rates in our liabilities, so there’s no rush here. This total is made up by many small loans, and every time I look at the accounts, I debate on just paying them off. But in the end - I normally just send extra to the PLoC.

 

Credit Cards: $10,714.36

Change from last month: +1,122.53

Would you believe me if I said that even though we have over $10k on our credit cards, we don’t actually carry a balance over from month to month? Mrs Money Smith has been travelling all over the world for work lately, and she gets to put all of that on her card, to be reimbursed later. This is actually ideal for us because it get’s her airline status built up, and at no real cost to us!

 

Auto Loan: $17,838.70

Change from last month: (-471.95)

Same old story here as well, which isn’t a bad thing! We’re paying just above the required payment on this loan, because it’s only a 2.49% interest rate. It’s such a small amount of interest over the life of the loan, that we have no real desire to put money towards it aggressively, at least for now.

 

Personal Line of Credit: $5,317.92

Change from last month: (-1,640.33)

Back on track for paying this down! If you remember last month, I needed to build a new PC and sorta put this target on hold. Well, now we’re right back to sending the majority of our extra payments straight to this loan. The bad news here, is that the rate is variable, and this loan has climbed up to 9.49% APR! This is significantly higher than the 7% rate that we started with a few years ago, so we’restarting to be laser focused on paying this down ASAP.

 

Mass Save Loan: $18,304.20

Change from last month: (-277.40)

This loan actually represents a lot of pride for our ability to get free money. We were able to take advantage of a grant giving us 0%, 7 year financing for upgrades to our investment property. There was no way I could turn that down! But again, only minimum payments to this one, as there’s no reason I can think of to pay this down sooner.

 

Total Liabilities: $424,201.70

Change from Last Month: (-2,217.14)

Liabilities 11032018.PNG

OUR NET WORTH: $31,385.78

Total Change: (-1,325.75)

Trend 11032018.PNG
Ratio 11032018.PNG

Overall thoughts for the month:

This has actually been a pretty stressful month, all things considered. What you aren’t seeing just from these numbers are some pretty big changes. For instance, we didn’t collect rent on one of our units this month, because we just had someone move out. If we had collected that $1,400 in rent, then we would have actually still seen positive growth in the aggregate of our accounts. You can read about what I’ve been doing to get new tenants here, (Plus Part 2 + Part 3).

Another big deal is that I’ve actually recently accepted a new position with a different company. This represents a lot of change for us, as I’ll now be making more money, and taking on more responsibilities. That will actually affect us negatively to start though, as I plan to take a week off between jobs and I won’t be paid for that time. The current game plan is to take all of the additional income from my new paychecks and take 100% of the difference to pay our debts down faster.

Lastly, about our net worth in general. This is the first time, in 16 months that our net worth has actually gone down. We still have an outstanding check which is our security deposit refund from our last property, but I haven’t cashed that yet due to a dispute I’ve raised with our previous property manager. So technically…If I were to include that amount in our numbers, we would still be trending positive, but I don’t include amounts like cash on hand, or checks waiting to be deposited in our accounts. That just leaves too much ambiguity up to what I feel like including each month. <—Likely more to come on the issue I’m having with the property manager this month, (I want to see it’s resolution first in case it comes to court).

Goal for next month

Last months goal was to share as much as I can about the process of finding new tenants while living out of state. I can say that I shared a lot of it, and it’s provided a new outlook on my processes. This goal idea has worked out really well for us so far, so in the spirit of continuing that:

The goal for November is to commit real time to relax and enjoy ourselves. This is sort of already decided, as we have a week of skiing planned for Thanksgiving, but as we come to the holiday’s, I think it’s important to focus on the stuff in life that isn’t represented by numbers in an account.

Let me know what you're goals are down below in the comments, or shoot me a message on the contact page.

-Mr Money Smith

How I Find New Tenants Out of State - Weeks 3/4

How I Find New Tenants Out of State - Weeks 3/4