Starting Over – (October 2022 Net Worth Update) 

Over the past 33 months, I’ve been documenting my journey towards reaching two goals: 

  • $30,000 in annual passive income by 2025
  • $1 million in net worth by 2027

I record my progress in this series and in an up-to-date tracker of my current holdings.

A lot has happened over the last few months. Let’s take a look at last month’s.

Home & Career Update

My wife and I are pretty much fully settled in Houston.

Some of the costs that come with moving to a new state have carried over into this month, but luckily most of the spending seems to be behind us. 

Additionally, this past month was pretty tough on the career side of things, since it’s the last month of the billable year for the big law firm I work at. I had to pack in the hours this month to meet my hour requirements.

For reference, I flirted with 300 billable hours last month. That’s by far the most I’ve ever billed in a month. I don’t want to put myself in that position again.

I’m definitely excited to have a reset so I can get back on a more normal routine.

Let’s see what happened to my numbers in the meantime.

October 2022 Net Worth Numbers 

As a reminder, my net worth last month was $93,457.19.

Assets – October 2022

This year has not been kind to stocks, but last month in particular was very harsh on my stock portfolio. 

My M1 Finance holdings have been taking the brunt of that impact and I’m losing quite a bit of paper wealth very quickly.

With the continuous rise in rates and fear throughout the market, I imagine my holdings won’t improve any time soon.

However, I did factor in an increase to my equity for my primary residence, since I’ve made a lot of improvements to this property.

My former primary residence – listed as “Chicago Rental Property 2” – is now up for rent, and we expect to have a tenant in there pretty soon.

I’m expecting to rent that property for about $2,500 a month. That would be enough to cover all expenses, including reserve savings, but probably won’t leave me with any cash flow.

But that will allow me to pay down the hefty mortgage on that property. I never planned for it to be a highly cash-flowing rental.

Additionally, we’re getting a moving stipend as reimbursement for our move down to Houston. We can thank my wife’s employer for that one.

This leaves our assets at $1,081,805.92.

Liabilities – October 2022

We certainly have some cleaning up to do on the liabilities side. 

The credit card balance is primarily last minute purchases for our new residence, like furniture. We’ll be getting this paid down right away, ideally within the next few weeks.

After credit cards, our main priority will be paying down the M1 Finance margin loan. I don’t want to have my portfolio exposed to margin risk for any longer than it needs to be, even if the rate is relatively low.

I also want to pay down the HELOC sooner rather than later. The rate has been going up and it’s almost maxed out.

This leaves our liabilities at $1,003,680.49.

My Net Worth – October 2022

All told, our net worth is $78,125.43

That’s a decrease of $15,331.76 from the previous month. 

That leaves our debt ratio at an all-time high of 92.78%

And our passive income remains at about $1,100 per month.

What’s Next?

Well, my net worth is back down to where it was when I started this series over two years ago.

While a bit frustrating, we’ve still made some major progress in other areas.

Since we started this series in February 2020, we’ve drastically increased our capacity for income. 

I finished law school, my wife is now finished with her grad school, and we’re both practicing in our fields. While our income is significantly higher, our debt payments are higher too.

However, we’re probably sitting at something like a 25% DTI ratio. So we’re not in a bad spot from that perspective.

And we now own 3 rental properties, all of which are in good positions.

While our net worth is back to square one, our capacity to get that net worth back up is much higher now.

It’s time to buckle down and press forward.

See you in the next one!

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Jack Duffley

Jack Duffley is a real estate investor and attorney based in Houston, TX.

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