I figure that you’ll want to see some data points, and I want a chance to crow about my successes a bit, so I’m backdating this to the beginning of the year. Just to be clear – I’ve been working on this for a few years now, so this is after lots of hard work and successes. I’ll go back at some point and give you a timeline of where I started and where I’ve been, so you can get an idea of my path to today, but the beginning of this year is as good a time as any to start with regular updates.
As for those regular updates I’m thinking monthly. That’s when I update my spreadsheet, so it’s the best time to get the most information. I’ll do a few updates before next month to catch us all up to where I am at the moment, then build on that going forward. Sound like a plan? Groovy!
Here are my numbers for January of 2018:
- Personal:
- Gross monthly W2 pay: $4,410
- Net monthly W2 pay: $3,145
- Total credit card debt: $24,972
- Total other non-mortgage debt: $21,165
- Total mortgage debt: $123,280
- Cash/cash equivalents: $15,006
- Total retirement savings: $130,225
- Net worth: -$24,186
Analysis: So…uh, yeah. That’s a pretty big red number, no? Yes! The beginning of this year, largely thanks to a recent Bigger Pockets podcast with Grant Cardone and the advent of the Bigger Pockets Money podcast, I started consolidating ALL of my information in one place. Before this year I had been tracking some of my debts, and periodically logging in to other accounts when I remembered they existed (that is to say, infrequently).
As you can imagine, seeing everything in black and white was a solid kick to the twig and berries. Not only was my non-mortgage debt almost a full year of (gross!) salary, my net worth was negative as hell. I’d been working on making money for decades, and all I had was red to show for it! This stark reminder of how close I was to sliding back under water was a heck of a wake up call, and started me on my path to my yearly goal…PAYING OFF DEBT, JACKASS!!!!
Come back next week to find out how I plan on doing that (see how marketing-y I can get? Also, I’m tired and want to stop typing for a while).
Dumpling,
I know many calculate net worth regarding their mortgages differently. Some do not count their primary residence mortgage liability against their net worth since it represents the equity portion of their property owned by the lender/bank. But do count the equity (difference between market value and principal owed) towards their positive column. What is your philosophy? You mention rental real estate. Is the Total Mortgage Debt category including rentals?
I don’t calculate equity as part of my net worth (as it is too illiquid). I do count all my mortgages against my net worth because I have no primary residence – the Total Mortgage Debt line is a sum total of all my property. I’m house hacking, so I have roommates and I pay my mortgage expense from my rental income. I’ll be posting a detailed breakdown of what’s in each category within the next week.
I think I don’t include equity because of the liquidity, but also because my long-term FI goal with my rentals is to live off the cash flow. So the equity isn’t really a benefit to me until/unless I decide to sell or refinance. If that makes sense.