We’ve made it to the 30th entry to my net worth series.
I’m documenting my path towards reaching $30,000 in annual passive income by 2025 and a $1 million net worth by 2027.
For detailed numbers, you can check out my net worth tracker. I update it monthly.
Let’s see how last month went…
Last Month’s Expenses
Last month was pretty expensive, at least relative to my normal spending.
I had a couple of trips last month.
One of them was to Houston; I traveled down for a weekend so I could take a look at houses.
The Houston trip cost about $1,000 altogether.
And I went under contract on a house shortly thereafter. More on that in a moment.
The second trip was a belated birthday present for my dad – he’s always wanted to go to TankFest in Bovington, England. I’ve always wanted to go as well, so it seemed like a nice birthday present to get him to celebrate his 60th birthday.
We were supposed to go last year, but we ended up delaying it to this year thanks to travel restrictions last time around.
It ended up being a great trip!
Thankfully, I was able to subsidize a large portion of the trip using 100,000 points from my Chase Sapphire Preferred bonus signup that I had from a few months ago.
Travel hacking makes big trips a lot easier.
I used all of those points to pay for a majority of the airline tickets, and that saved us about $1,000.
Besides the trip, I’ve been spending money on a Houston real estate deal via inspection and loan fees.
Whether it’s your money or someone else’s money, you have to come into a real estate deal with quite a bit of cash, no matter how you spin it. Quite often, a bit of your money is involved.
I’ll get back to that in a second – for now, let’s get into the numbers.
July 2022 Net Worth Numbers
As a reminder, my net worth last month was at $138,223.18.
Assets – July 2022
I have been trying to keep a close eye on our cash position. We’re scheduled to close on July 8th for this house, and we’re going to need some cash to close.
The purchase price is $285,000 (coincidently the same price as my Chicago town home that I bought almost a year ago).
I plan on putting 5% down on the property. And I’ll need some serious cash to go towards the rehab it’ll need.
I’ve already paid a few grand in earnest money that’ll go towards the closing costs. However, we’re preparing to funnel in another $15,000 or so prior to closing.
Anything that’s not covered by my existing cash pile is probably going to come from my M1 Finance or my HELOC, since both are relatively low interest. I would be aiming to pay those back pretty quickly.
Because of this upcoming deal and all of my spending this past month, I didn’t add a whole lot of new funds to my stock portfolio (which got battered this month).
That being said, I’m still adding about 10% of my monthly income to my 401k.
My earnest money deposit will be going towards the new property so long as I close.
And, just for fun, my tiny crypto position decreased by about 50% just in the past month.
So our assets are at $751,952.19.
Liabilities – July 2022
I have some carryover credit card balances that will get paid off before any interest accrues.
Otherwise, the last chunk of my wife’s student loans just got rolled in. She’ll be done with school in the next month or so.
We’ll see how long interest stays frozen, because as of right now, it doesn’t make sense for us to pay those down.
We have other debt to worry about, like the HELOC.
Our HELOC is on a variable rate. The interest rate is climbing; it started as low as 2.25% interest and now is up to 3.75%. It’s getting more significant and it’ll make less sense to keep that balance outstanding.
We have about $75,000 that we could take out from the HELOC if we wanted to, although there is always the risk that they can freeze our ability to take out money if times got tough.
For now, it’s a nice layer of flexibility.
Additionally, we have about $30,000 that we could take out in margin debt via M1 Finance if we wanted to do that – that’s still around a 4% annual interest rate.
All told, our liabilities this month are $633,303.45.
My Net Worth – July 2022
That leaves us with $118,648.74 in net worth.
That’s a total decrease of $19,574.44.
Our debt ratio is at 84.22%.
And our passive income remains at about $1,100 per month.
What’s Next? (Under Contract in Houston!)
The house is going to be the biggest priority over the next few months.
It does need a significant amount of work, so we’re talking with some contractors now to see if we can get the bulk of that done during July right after we close.
We’re aiming to move in August before my wife’s job starts in September.
As a general overview, the property is currently under contract for $285,000.
We’re also getting a $7,000 credit from the seller which will offset a chunk of the out of pocket costs.
We’re using conventional financing with a 5% down payment, so we aren’t putting a very much cash towards the initial purchase.
However, we’re probably going to end up putting about $50,000 into the property to do a pretty significant rehab.
I’ll have exact details on the rehab and the cost breakdown once we actually go through with the contract.
It will be tens of thousands of dollars in additional costs, no doubt.
Either way, I’m excited about this deal; this will be my fourth property and will finally allow me to rent out our current primary residence in Chicago. That’ll bring me up to three rental properties.
And we’ll get to live in a much larger house in the meantime. Everything’s bigger in Texas, right?
Whatever happens, I’ll be sure to keep you updated.
See you in the next one!
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