I'm pretty happy with the gain in my Networth this month. In the middle of the month, it did not look so good due to dips in the market. Here is how things ended up:
Assets:
- Rental Property - $137,000
- Primary Residence - $193,000
- Car - $29,500
- Retirement - $43,309.32
- Cash (checking & savings) - $42,031.54
- Brokerage - $3,514.14
- Household Items - $7,500
Total Assets: $455,822.00
Liabilities:
- Rental Property Mortgage - $150,439.07
- Primary Home Mortgage - $183,470.25 (1st and 2nd mortgage)
- Car Loan - $25,592.57
- Student Loan - $22,223.81
- Credit Cards - $10,694.62
Total Liabilities: $392,420.32
Net Worth: $63,461.68; change from prior month = 5.49%
Comments: My non-mortgage debt continues to decrease although not at a rate I would like. I was able to decrease my debt from $59,261.20 at the end of September to $58,511.00 at the end of October for a change of roughly 1.3%. My goal is to be less than $56,000 by the end of the year.
My credit card debt is as follows: $7506.81 @ 2.99% until balance is paid, $3150 @ 0%. The remaining balance of $37.81 is for charges that will be paid in full next month.
If my offer is accepted on the investment property I am considering purchasing, that closing will occur this month which will take a major chunk of my cash.
I haven't read through all your blog (so you may have already answered this) but I wonder why you'd be using your cash as a deposit on another real estate purchase when you could use it to
a) pay off credit card debt
b) pay off car loan debt
c) use remaining as an emergency fund, or, use it with a margin loan facility to buy an investment in a stock index fund/
You are already overweight in real estate from an asset allocation point of view (no matter how great you think property is, diversification is proven to improve your risk adjusted return). Also, I'm not sure that the expected ROI of the proposed real estate investment would exceed the interest costs of your credit card and car loan debts.
Regards
http://enoughwealth.com
I agree with the comment above from enoughwealth. I'd sell everything I could and get out of debt and sleep better at night. We can't all be Donald Trump.
@ enough wealth - This will not be a deposit, I will be paying for the entire purchase price of the home. My credit card debt is at 0% and 2.99% for life so I am not in a big hurry to pay that off. Thanks for the comments!~
@ ronnie - Yeah, I would sleep alot better if I had no debt.
Thanks for the update! Glad that you're on your way to reducing your debt.
Have you thought of selling off your car and buying a used one (I'd get one between $5000 to $8000). You'll probably get about $15000 to $25000 in cash depending on the sale of the car, and pay off the higher-rate loans? The credit loans at under 2.9% is quite low, but I don't know about the interests on the other loans.
Just by selling your car almost overnight you can pay down your debt by about $15000 or more, and still have a decent enough car ($8000 can buy you a decent late 1990s or even early 2000 car that is dependable). I am simply saying this is what I would do myself...
Good luck, and keep up the good work.
@ Mr. S - I don't want to sell the car. I plan to drive this car until the wheels fall off.