This is my fifth update in this series, which I started to document my path to financial independence. On the first of each month, I go through my entire personal financial statement and check my progress towards reaching a $1 million net worth and a $30,000 per year passive income.
You can check out my net worth tracker if you are solely interested in the numbers aspect.
Anyways, I wanted to take a moment to discuss why I’m doing any of this in the first place.
My Goal With This Series
Quarantine and the economic situation have played a massive role in the outpour of emotion that we’re seeing throughout the nation. People are becoming increasingly frustrated. Not only with their own situation, but also with the larger system.
Many people are in an unusual situation right now. That is why it is critical to seek out ways to improve yourself, emotionally, and socially.
There are a lot of things that I have to gain from this journey, as well as things that others can potentially gain from hearing about my own experiences.
Small, incremental improvements over time can produce huge results. And learning from my own successes and failures can go towards that effort.
A lot of people in the finance creator space document their experience retrospectively.
The fact of the matter is, many opportunities today look different than the opportunities that were available ten years ago.
And, because my series is in real time, I can explain my thinking while making a particular decision as I make it. It also forces me to articulate why I’m doing something, which helps keep me focused.
Above all, as long as I continue to learn and make progress, I want to continue to document it.
A Note on the Past Month
The investments that I do have are doing pretty well.
Meanwhile, I’m still shopping for a real estate deal. I recently made an offer in Indianapolis that was above the seller’s asking price. I learned this morning that I was denied and another bidder got their offer accepted.
It’s really amazing how strange this market is.
Throughout the country, we have record high unemployment that will continue increasing – not to mention many riots and the ongoing pandemic on top of it.
It’s very bizarre that the real estate and stock markets can keep plugging along. Though I suppose anything is possible with enough fiscal and monetary stimulus?
In any event, Indianapolis is still boasting a hot market. So it has been difficult to land a deal at a decent price.
That’s said, let’s get into the numbers.
June 2020 Net Worth Numbers
As a reminder, last month we were at $60,807.62 with a debt ratio of about 83%.
Assets – June 2020
A lot of my assets are in cash because of the big draw I took from my HELOC account a few months ago. As a reminder, I did this to prevent having my HELOC frozen. And the rate on that HELOC is only 2.25%, so it was worth ensuring that I could keep my funds free for future investment opportunities in this strange market.
Meanwhile, stocks only go up.
Despite all of the headlines, people are optimistic enough to keep pouring money into stocks.
I still have a few put options just in case things drop hard since I have my HELOC balance to keep an eye on. It’s not a large portion of the portfolio, but enough to cushion the blow in the event of a fast crash.
I’d hate to get caught in an awkward position with all of the debt I’ve recently taken out.
Until my income increases, whether through a new part-time job or via my investments, I’ll likely keep some sort of options hedge.
Speaking of jobs, I did get the stipend payment from my cancelled summer job that I mentioned in the last update. So that’s nice.
I’d expect my next big change in assets to be a piece of real estate in Indianapolis. Although, it’s hard to predict when exactly that will happen because the market is still so hot.
Otherwise, not really much has changed on the asset front. Our assets stand at $365,867.98.
Liabilities – June 2020
I made some debt payments in the past month, notably to our student loans and HELOC.
Additionally, my credit card does have a $410 balance.
To be clear, I never carry my credit card debt long enough to accrue interest. I always pay it down before that. I actually already have a payment scheduled on this card; this is just the remaining balance for the moment.
Otherwise, little has changed. Our liabilities stand at $294,723.17.
My Net Worth – June 2020
As of right now, our net worth is $71,144.81.
In the past month, we’ve had a total gain of $10,337.19, which is our biggest gain yet.
Our Next Steps
1. Buying a Real Estate Deal
Like I said, I do want to buy a piece of real estate as soon as I can.
But I don’t want to rush into a deal. I’m willing to be patient to make sure the numbers check out.
2. Paying Debt
After my real estate investment, I’m planning on turning to a heavy debt paydown mode for a few years.
EmilyAnn and I have a big chunk of student loans that we still need to get through. They’re going to increase within the next couple of years, so we want to handle that ASAP, given the current interest is 6 or 7%.
I would likely pay into my HELOC in the meantime and then use the freed up to pay down some student loans when the time is right.
It would sort of be like refinancing my student loans into a lower interest rate via the HELOC.
I do have this summer and fall left before I graduate law school. That will free up some more time to focus on my actual post law school career. I do also have a job lined up for well after graduation.
Naturally, that will make aggressive debt paydown a whole lot easier.
Though I want to remain flexible in any event. Paying down debt would be nice, but I wouldn’t necessarily shy away from more deals at that point.
3. Boosting Income
In the meantime, I want to focus on diversifying my income streams.
As I mentioned last month, I have begun to focus on my real estate agent business.
It is a little awkward given the current quarantine. But, I do have some clients that I’m working with right now in the Chicago area. They’re mostly for rentals, but I’m working with a few prospective buyers, as well.
I am also looking to create an additional stream of income through something like affiliate marketing. Amazon, specifically, has a very reputable affiliate program.
If I can get a few affiliate sites going, I can have some extra streams of income with that as well. I might experiment with that soon.
I am more flexible than a lot of other people right now. Many people don’t have the time or options to make something happen.
I have decided to take this time to explore things I have been thinking about doing for a long time.
Whether it be passive income streams or side hustles, it shouldn’t hurt to spend some time over the next few months trying some new (or adjusting old) strategies.
If they fail, we’ll just write them off as tuition.
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