Aggressive Debt Paydown (November 2020 Net Worth Update)

It’s the first of the month, which marks another update on my net worth series

I’m trying to reach two goals: $1 million net worth and $30,000 in annual passive income. This series is a way to document that journey.

I am trying to do this before I turn 30 years old, so I have a little under 7 years to go. 

Aggressive Debt Paydown 

I’ve been adjusting my financial position to try and be well equipped for whatever environment we’re heading into for the next few years. 

Those of you who follow this series know that we have quite a bit of debt right now. 

Between my wife’s student loans, our HELOC, and some other liabilities, a lot of our assets are “canceled out” debts. 

We’ll likely focus on de-leveraging in the coming months. 

Luckily just before this last crash, I cashed out about $10,000 of our index funds that we had in Vanguard. We paid that towards our HELOC.

So I guess you could say our de-leveraging is well underway. 

Stock Market Update 

The previous month continued the very strange situation the stock market finds itself in. 

Despite all of the bad news we saw in the spring and the summer, the federal reserve spent a lot of money and issued a lot of new currency to try and prop up the markets.

Really, they were quite successful in doing that.

However, just this past week, we saw the stock market take a big dive. It’s still very high compared to what it was in March, but it’s a pretty big pullback from what we’ve seen for many months now.

A lot of this probably has to do with the stimulus shock wearing off, and the expectation that we won’t have another massive stimulus package to boost the market.

There’s also a lot of uncertainty with the upcoming election, which certainly adds fuel to the fire. We’ll see what certainty we get in the next week or two. 

When it comes to policy, I think both parties have mailed in the fact that the debt is completely out of control. Rather than do anything about it, they’re just going to keep adding to it – which is great in the short term. We’ll see how much longer it can last.

All I can do is focus on trying to put myself in a better position in the meantime.

Paying Down the HELOC

Even though HELOC is only at 2.25% interest rate right now, it is a variable rate. 

Of course, if a situation gets too rough, our credit line could get frozen.

I’m not too worried about that right now. 

The reason I pulled all of the funds out of HELOC back in the spring was because we were shopping for a rental property. We wanted to make sure we had cash available to close on our deal in what was a very uncertain environment.

As I covered previously, we ended up closing on a rental property this summer

Now that we’ve closed on the deal, we don’t need all of this extra cash we have at the moment.

But, we do want to keep things fairly liquid if possible. 

So paying down the HELOC does seem like a decent move in the short term since we can redraw on it later.

November 2020 Net Worth Numbers 

As a reminder, our net worth as of last month was $68,658.20

Assets – November 2020 

Assets November 2020

We still have $21,000 in cash. We have less cash than before since we are using it to pay down the HELOC.

As I mentioned, I sold off a lot of our Vanguard index funds, so that taxable account is very small now.

I did move some of that money into M1 Finance to buy things like gold and gold mining stocks, which is a small (but significant) portion of that portfolio now.

[If you want more information on that, I review my stock holdings in my M1 Finance series.]

The stock market did go down quite a bit, but it was coming down from an extreme high. All things considered, we’re doing alright.

We’re left with a total of $370,868.75 in assets.  

Liabilities – November 2020 

Liabilities November 2020

As for liabilities, nothing’s changed since last month besides our HELOC. 

The balance is now well below $100,000 (at $78,000 or so). 

The total size of the line, if I wanted to max it out, is about $120,000. 

We’re getting much closer to what I’d call a “normal” HELOC balance level. That said, ideally we can get this down to zero sometime within the next year so we have it available to use whenever we want. 

All of that said, our liabilities are now at $299,620.75

My Net Worth – November 2020 

This means our net worth is $71,248.00

That’s a total gain of $2,589.80

Our debt ratio decreased to 80.79%

And our passive income has remained the same at about $350 per month

What’s Next 

Like I mentioned, I think this next year will be really focused on de-leveraging. 

Of course, I will still be on the lookout for deals. I think there will be some pretty good opportunities if and when we continue seeing some negative movements in the markets again. 

The stock market is still pretty high, relatively speaking, but it has come down very quickly just in the past week. This could be the start of another crash like what we saw in March. We’ll see.

I’m going to focus on paying down debt as a general goal.

However, if there are opportunities to get very undervalued assets, I’ll go ahead and do that. 

In just under two months, I’ll be graduating from law school.

The bar exam won’t be until February, but I’m looking forward to freeing up some time to focus more time and energy on earning more income (rather than studying for free!).

On to the next one.

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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