Major Boost to Cash Flow – (February 2023 Net Worth Update) 

Over the past 3 years, I’ve been documenting my journey towards reaching two goals:

  • $30,000 in passive income by 2025
  • $1 million net worth by 2027

I’ve posted an update every month during that time.

You can check out my net worth tracker for a full history. I update it each month.

And we had a major change this month!

Closed on a Small Business Purchase

In the past month, I finally closed on the carpet and steam cleaning business I was under contract for in Houston.

The business has definitely altered my financial situation in a significant way.

For one, I have employees to worry about, which is a new layer of responsibility that changes my financial incentives.

At the same time, I now have a significant revenue stream to manage (and plenty of expenses necessary to operate it).

Although I took out debt to buy the business, I have new cash flow that can be used to pay down debt or reinvest back into the business.

At least if all goes well. More on that in just a bit.

I spent around $185k to buy the business and fund the initial operating capital.

If it performs as it did in the last couple of years, it should throw off around $70k per year in cash flow.

However, I will likely make some changes off the bat. More on that in just a moment.

For now, let’s get into the numbers.

February 2023 Net Worth Numbers 

As a reminder, my net worth last month was $88,424.85.

Assets – February 2023

Our cash pile from last month has disappeared, as it was invested into the business that I just purchased.

Speaking of that business, it is now listed in my spreadsheet after closing. The current equity I’m assigning to it is $185,000, which is the purchase price plus the cash reserves I added to it

Going forward, I probably won’t change the value of this asset on paper until I have some significant operational history that would suggest a need to change the value.

That said, if I add a significant amount of cash to the business or acquire some new asset within it, I would likely update it at that point.

In other news, the stock market has been on a bit of a tear over the last month, so I’ve seen some pretty significant gains that have been helpful for net worth purposes.

This leaves our assets at $1,282,205.39.

Liabilities – February 2023

As we discussed last month, I took out a bunch of personal loans that allowed me to make the business purchase. Now, I’m focusing on deleveraging.

My current goal is to pay down $200,000 in debt this year.

When it came to debt paydown last month, I focused on paying off my M1 Finance margin. I was able to wipe the vast majority of it, which ended up being about $18,500 in paydown.

The rest of the paydown was just from making minimum payments on the loans.

I’ve also been making “courtesy” payments on student loans, about $500 per month. I will likely stop that to focus on the new, interest-bearing debt I’ve taken out.

This leaves our liabilities at $1,174,296.31.

My Net Worth – February 2023

All told, our net worth is $107,909.08.

That’s an increase of $19,484.23 from last month.

That leaves our debt ratio at 91.58%.

And our passive income remains at about $1,100 per month.

Running a Business (What’s Next?)

With my new business purchase, we have some exciting times ahead of us.

Thankfully, things were already set up pretty well when I acquired the business so there isn’t a ton to do to get things going. It’s more about optimizing and looking for new avenues to grow the business.

I’m in the middle of hiring a manager for the business. I want someone else to manage the day to day operations so I can continue to hold down my day job while still being able to grow the business.

That’s what I’m focusing on currently: building a team, improving systems, and simply trying to put the business in a better position to succeed.

If all goes well, the business should be a nice source of future cash flow.

Regardless, this will be a challenge and there’s a lot to learn!

I’m looking forward to this next chapter in my life and financial career. Whatever happens, it should prove a very educational experience.

This website, and any communication stemming from it, while hopefully informative, should not be taken as financial or legal advice. Assume all links are affiliate links. I am an Amazon affiliate.

Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

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