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.
It’s been a bumpy ride. The past few months in particular have not been kind to my numbers.
Let’s see if I turned it around last month.
The Financial Onslaught of the Last Few Months
We’ve lost tens of thousands in net worth over the past few months.
This is pretty significant given that we now have a net worth below six figures.
My investments have not been spared by the recent market turbulence, with some being hit significantly harder than others.
Additionally, my wife and I made our move to Houston – we bought our new primary residence and did multiple renovations to it, which brought with it a net worth loss.
We’ve also been getting our former primary residence ready to rent, so it was sitting vacant for a bit, meaning we were paying two mortgages at the same time.
During most of this time, my wife was waiting for her license so she could begin working full-time.
Now that she is, we’re now comfortably dual income.
Let’s see how that affected the numbers last month.
November 2022 Net Worth Numbers
As a reminder, my net worth last month was $78,125.43.
Assets – November 2022
Markets have been very volatile, mainly towards the downside, over these past few months.
This month was no different, but the market was not as brutal to my portfolio as it has been lately – this applies to our taxable stock holdings and retirement accounts.
I would like to add more aggressively to my stock portfolio, but we have a lot of debt to worry about at the moment.
In all likelihood, I won’t be contributing to my taxable stock holdings for the foreseeable future.
As for our real estate holdings, our valuations are fairly conservative.
On paper, I could probably add $25-$30,000 in equity across the property entries if I wanted to, but that wouldn’t take into account the fees associated with selling and potential capital gains taxes.
Additionally, conservative valuations provide me an artificial cushion in a volatile market.
In total, this leaves our assets at $1,082,661.41.
Liabilities – November 2022
The balance on my credit cards can be attributed to some furniture purchases for our new home. That balance will be gone next month.
The majority of our take-home pay is going to be going towards our M1 Finance margin and our HELOC balance, since those are revolving and variable rate loans – with rates currently rising.
Otherwise, not much has changed.
This leaves our liabilities at $998,720.69.
My Net Worth – November 2022
All in all, our net worth is $83,940.72.
That’s an increase of $5,815.29 from the previous month.
That leaves our debt ratio at 92.25%.
And our passive income remains at about $1,100 per month.
What’s Next? (Searching for a Business)
We’re back on track! For now…
We’re going to be focusing a lot of our energy on continuing to deleverage, which we got a nice start at this past month.
That being said, I am looking to acquire a business.
If I need to raise more debt, I’m still in a position to be able to do that – so long as the numbers make sense.
I’m only willing to take on more debt at this point if it provides substantially greater cash flow and would “move the needle” for me financially.
I’m going for a very high cash flow business relative to something like real estate, though of course the risks are drastically different.
Here’s a video from a recent trip to look at a business:
But, long term, I think this is the route that makes a lot of sense for me. I’ll get back to more aggressive real estate and stock investing after that.
Put another way, I’m focusing on “offense” (driving more income) rather than “defense” (preserving wealth through things like real estate and stocks).
Either way, there should be a lot to learn.
Onwards!
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