My wife and I made a pretty big investment change last month … We withdrew $35,000 from our brokerage account, took another $15,000 in cash, and invested it all into a new real estate project.
You’re probably thinking we’ve lost our marbles, since I just wrote a whole saga about how rental properties are weighing me down and why we’re moving AWAY from them … But, this new investment is not another physical house that we have to manage directly — it’s a private partnership to fund a much bigger (and professionally managed) apartment complex. It’s a purely passive investment for us.
Up until now, I’ve kept our real estate partnerships separate from these net worth reports. But I’d like to track the numbers on this particular project publicly so you can observe how it grows from the beginning. I promise to write more about the ins and outs of private syndications another time, but for now I just wanted to explain why there’s a big chunk of money missing from our brokerage account, and how the new line item “R/E partnership” for $50k popped up below.
March 1, 2021, Net Worth: $564,730 (+$14,171)
Here’s the asset summary for everything we’re tracking. In February all these assets grew by a combined $14k:
Before getting into the individual account breakdowns, here are some fun money wins for Feb!
February money wins…
We got a $200 bank bonus!: PNC Bank is offering a $200 cash bonus to anyone who opens a new account and has qualifying direct deposits. I opened an account on Jan 22, transferred $2k into it, and got paid the bonus on Feb 25. An easy (and free) $200 bonus for about 1 hour of work! (See here how Bank Account Churning works if you’re interested.)
Selling crap online: One of my friends found out I like to turn trash into treasure, so he asked if I could help him clear some stuff out of his storage. He’s giving me a generous cut of the sale proceeds, and I’ve already made over $200 the past week from selling his stuff!
Check out these Lladro figurines… Each one sells for $50 – $300 on eBay depending on the piece. Crazy!
Work, work, and more work: I picked up a new side contract gig, helping with SEO on another blogger’s website! Although it’s only a few hundred dollars each week, this should add up to over $10k throughout the year (providing the work continues to be available).
Mammoth expenses last month…
Big travel expenses: Valentine’s Day set us back about $400 due to a weekend away in wine country. We also just dropped $1,500 on a Hawaii getaway that we’ll embark on later this month. As expensive as that sounds, we actually got free flights with SW points + companion pass, and we are staying with friends for a portion of the trip.
Feels good to spend money on travel after a whole year of cancelled covid trips!
New $950 laptop: The last time I bought a new computer was in 2009, so it was time for a technology upgrade! And I’m thinking this one might be tax-deductible now that I’m a stay at home blogging nerd. Here is my new best friend, a 2021 MacBook Air:
Yes, that’s a wine stain on the table cloth. We had a little too much fun last weekend and I haven’t run the laundry yet. 😅
Detailed Asset Breakdown:
CASH Accounts: $25,934 (-$13,148): Now that my wife and I are both working, we’re happy having a little less cash in our personal emergency fund. $15k was deducted and applied to the new real estate project. We will slowly build this cash pile back up to $30k, I think before summer break.
Rental Property + Reserve Account: $234,684 (+$324): Not a great month for our duplex. We had a stove, dishwasher, and washing machine break. The repairs totalled about $900. But, I’m looking on the bright side because we didn’t have any frozen/busted pipes or water issues like many other properties in the Texas storm. 🥶
Another thing I’m grateful for here is that this duplex cost me zero *man hours* this past month. I sometimes complain that owning physical rental properties isn’t “passive” income, because there’s management work involved. But, my awesome property manager handled all problems on my behalf this past month, so no work was needed on my end.
IRA – Rollover: $146,301 (+$7,168): A portion of this IRA is invested in a Small Cap Value index fund, which is why it grew faster than the overall total stock market index.
IRA – Roths: $84,885 (+2,603): Woohoo! Tax-free growth! This is why I try to fund Roth IRAs as early as possible within the year (even if it means robbing from my after-tax brokerage account). The earlier money is invested into Roth accounts, the longer it can generate tax-free gains.
Joint Brokerage Account: $133,553 (-$31,297): Usually selling stocks is a big no-no while building wealth. The more you pull money in/out of the market, the worse off you do. For the $35k that we sold last month, we’ll be returning that shortly whenever we sell our first physical rental this year.
HSA: $2,931 (+$90): Just realized I should have funded this sucker in January, like we did the Roth accounts. Hmmm, something to add to my list this month.
New 401(k) at work: $10,944 (+$2,295): Woohoo, we crossed the $10k mark for this new 401(k) account! Not bad considering it was only opened last October.
Breakdown of Liabilities
Rental Property Mortgage: -$121,795 (+$242): Slow and steady wins the race. I just did an annual review of this rental property, which I’ll publish as a full post shortly and share the calculated ROI for 2020.
Credit Card Balances: -$2,711 (-$4,106): Some pretty hefty spending last month! But this was mostly irregular expenses, and we have the cash to pay this card off before any interest is due.
Wife and I have no other consumer debt at this time. 😎
Questions? Comments? How were your updates the past month?
Have a great freaking weekend!
– Joel
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Empower account instead (formerly Personal Capital)
Empower is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Empower - check it out here: Why I Use Empower Almost Every Single Day.
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Congrats on the new technology upgrade (and I had to smile at the wine stains on the table :))! Sounds like your net worth is continuing to climb in the right direction, which is what it’s all about. I really enjoy reading these reports – and I love seeing how you keep adding money to your net worth. Keep it up!
Cheers,
Fiona
Happy Friday Fiona! Well, I’d like to take credit, but the truth is it’s our investments that are carrying us higher each month. We might contribute a couple thousand personally each month, but the biggest growth comes from existing assets :)
Maybe I missed it. But, I don’t see a mortgage or home value. Do you rent?
Yep, we are happy renters!
We have been tracking, using the J. Money spreadsheet, since Aug of 2013…around the time I first discovered Budgets Are Sexy! And I’m pleased to say we crossed a new milestone with our March update. Granted the markets were playing very nice so it may all disappear before we can spend it, but still it is so fun to watch our line go up!
CONGRATS!!!! Tracking pays off :) Have a great weekend Tracy!
Big moves — congratulations on the opportunity! Got any tips for eBaying junk? My mom had quite the collection of random never-seen-the-light-of-day crap when she died, and dad has spent the last five years trying to make it go away…
After realizing we may well have over-funded our tax-advantaged savings, we throttled that back and started pumping money two weeks ago into a brokerage account. If we can maintain our savings rate from the last month or two, that’ll be a nice cushion to draw down from age 48ish to 59.5. It’s been crummy watching ESGV plummet over that span; good thing we won’t need it for at least half a dozen years.
I think the trick to eBay is good research. Before I list anything, I search around to see the approx $ that something might sell for. That’s how I gauge how much time I should put in, and how thorough I should be creating the listing. For stuff I just want out of the house, it’s timing that matters more than money. I’ll take $40 right now vs. $60 and have it sit for 2 weeks. I just want stuff gone. BUT, for these fancy figurines and collectables, it’s probably worth taking your time to get good photos, good lighting, and researching similar listings to see what you can expect.
That’s AWESOME about your savings rate and after-tax brokerage. It’s great to know you have access before official retirement age and can leave the taxed advantaged stuff sit longer.
Awesome stuff–love that you’ve taken the net worth baton and ran with it! And I especially love the wine stain on the table skirt! Looking forward to hearing more about this private real estate partnership.
Cheers IF! Have an awesome weekend my friend!
Our family started a challenge this month where each family member has to find one thing (every day) to either donate, sell, or trash. My son is thirteen and is making money selling toys he no longer wants – watching the light go on for him when the cash comes in is funny. He’s now trying to sell almost everything he owns to raise money for a gaming PC. It’s two lessons in one; 1) we have way more than we need; and 2) it’s better to save cash for the things you really want. ;-)
I can’t wait to play this game with my kids! A friend of mine did this a while back, with a little twist… every second Sunday they needed to *donate* an item, instead of selling it. Watching kids part with their toys and get nothing in return is sad, but boy does it teach them how to give :)
Would love to hear how much you end up making when the month is up!
Small cap value index fund? I think I just felt my #*$& move!