I am trying to reach financial independence in 5 years. Additionally, I am aiming for $1 million net worth in the next 7 years. This is my fourth update in this series, which I began in February.
With this series is that I will leave a complete record of my progress (or lack thereof).
When I reach my goals, I would like to have it all documented in greater detail than if it was entirely reflective. With this format, I can explain things in as close to “real time” as possible.
If you would like to see ongoing updates of my progress throughout my journey, you can view my net worth tracker here. I’m also documenting it all on YouTube.
Ramping Up My Real Estate Business
A couple weeks ago, I learned that I lost the summer job that I had lined up at a law firm in Chicago. Not all is lost – I will receive a generous stipend from the firm this summer. But it won’t be as much as I would have made in the job itself.
However, this means I have a lot more free time this summer.
So I’ve decided to make a temporary career pivot.
I’ve been sitting on my real estate broker’s license for about a year. Besides helping out some family and friends, I haven’t done much with my license.
But, now, I’ve finished up my agent site and am ready to ramp up my efforts as an agent.
My plan for this site is to start some ad campaigns, get some traffic to the site, and eventually get some leads. Even during the crisis, people still need a place to live. I also want to take advantage of relatively cheap ads and limited competition.
And if things don’t go great, I can start building a pipeline of leads for when the market does improve.
Anyways, let’s get into this month’s numbers:
May 2020 Net Worth Numbers
As a reminder, at the beginning of April, we were at $58,940.48.
Assets – May 2020
Not much has changed on the asset side of things.
I’m still sitting on a good amount of cash right now, ready to be used towards a real estate deal.
Recently, I made a video about how my go-to LLC property lender is no longer doing loans due to the ongoing crisis. In short, credit is tightening significantly.
I might need to wait a little while to buy a rental property in Indianapolis. Meanwhile, I parked a good amount of my cash that I had drawn from my HELOC account into my M1 Finance account.
My M1 Finance balance is split fairly evenly between a bond-heavy and a stock-heavy portfolio.
Additionally, I’ve bought some put options in Robinhood to protect against the downside while still remaining invested. The market seems a little overly optimistic currently, and I want to avoid getting burned in the short term while I have so much debt pulled out.
Additionally, I’ve opened a Fundrise account. This is a real estate investment platform which lets you invest in special REITs that are not available on the public market. I am still fairly new to the platform, so I will let you know how it goes as I get a little more account history.
All told, our assets this month add up to $356,448.53.
Liabilities – May 2020
Our liabilities look almost the exact same as they did last month, except I did take out a little bit more cash from my HELOC. I still have nearly $20,000 in available HELOC balance that I can tap into.
For those of you who may be confused about why I have all of the cash in addition to a hefty HELOC balance, this was to avoid the risk of having my HELOC frozen due to the current credit environment.
The interest rate is only 2.25% right now, so it also doesn’t cost very much to have that debt taken out.
Our liabilities this month are at $295,640.91.
My Net Worth – May 2020
That means, in the last month, our net worth has increased by $2,317.4.
Our current net worth is $60,807.62.
Our debt ratio remains around 83%, which is certainly higher than I’d like, but I think it’s temporarily justifiable.
At the very least, we’re not negative this month like we were for the last couple of updates.
What’s Next
The markets have recovered a decent amount of their losses already. Although this may only be temporary, it did help my numbers.
I’ll be trying to earn some more income in the coming months through my real estate agent business. Ideally, that will speed up our progress even while I’m still in law school.
I really haven’t been making that much money since I’ve been in school this year. Even a slight income boost will be significant to our progress, but I also do have a stipend to look forward to pretty soon.
I’ll probably use a good chunk of any new income to pay down debt unless the market drops significantly again. If that happens, it’ll be time to invest more aggressively.
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