Debt sucks, period. Most people accept debt as normal and expected, but that is crap. Still, I have debt though, and am working on crushing it. So here goes:
Car #1* (my car): $7,198 (maturity: 6/2021, $250 / mo.) interest = 1.9% ($2831 reduction from last year)
Car #2 (her car): $12,585 (maturity: 10/2020, $475 / mo.) interest = 1.5% ($5459 reduction from last year)
Mortgage: $329,855 ($2100 / month, 30 year, 4% interest)
Family Cash: $30,000 - a family obligation 0%, no timetable (help received purchasing our house)
Revolving debt / credit cards: No balances carried or maintained, used as debit cards with credit points.
Total monthly debt payments = $2825
Total debt: $379,638
Currently, we pay my wife's car in exact amounts, and I pay a little extra on my car and our house. I count our house exclusively as a debt. Could it be an asset? Yes, but at the moment its a little more important than that.
* - I almost sold my car, but due to work family and obligations, doing so would be a real problem.
My wife took the end of last year off to spend time with the baby, and will head back to work at the end of this summer. Last year our total income was approximately $110,000 before taxes. This year our expected income is closer to $94,000. Her return to work, coupled with a very conscious effort on my part to cut expenses should help me to eliminate debt and make purchases of stock.
Expected income (2018):
My main job: $80,000
My side gigs: $1,000
Looking forward to the second half of this year is a very pleasant thought. Our income will balloon, savings will grow, and we will focus extra cash on more stock. Additionally, I will like to dispose of one of my car loans.
This is the fun part. Current assets that are to be considered are my taxable investments, Roth IRA, IRA, 401K, and other retirement savings. Cash, Health Savings Accounts, and miscellaneous assets are not counted unless they fit into another category. I work to shield liquidity this way, and separate out what is needed versus what can be invested. Assets including cash in investment accounts:
Taxable Invested Assets: $39,775
Roth IRA: $20,078
Traditional IRA: $38,468
Wife's Retirement / Pension: $15,416
Total = $133,042 ($32,195 total growth)
At the beginning of 2015 the total stood at $47,000. At the end of 2015 it was $54,000, and at the end of 2016 it was $87,000. Since the start of 2016 both my rate of investment and the market have been on tears. Purchasing a house will stifle this, but only briefly. This past month is the first time our total assets broke $100,000, so time to double down. It is my goal to make this number hit $145,000 by end 2018.
Total Net Worth = (-$246,596)
Last year I wanted to increase my income and investments, and decrease non-housing debt. That was a success. So I want to now lay down concrete debt related goals to reach before my next birthday.
1 - Begin retiring some of my family debt.
2 - Eliminate a car payment.
3 - Networth approaching or above $-230k.
At the moment we are doing well relative to our peers. However, though our peers represent a good metric, they are not what I want to use to measure my life's progress. The primary drive is to achieve financial independence in a meaningful way - that independence would then be leveraged to pursue work and life goals that my current 9-5 does not give me time the time to chase.
- How is your net-worth coming along? Buy a house recently?