Real Estate - $853,000
Retirement accounts - $202,003
Brokerage - $64,650
Cash equivalence - $20,803
Other - $2,005
Real Estate Mortgages - $423,660
Net Worth: $718,798
I did not get to pay off one of my mortgages last month like I previously would have liked. I've been having an ongoing issue with a chilled water AC unit in one of my rentals. I have no idea how much it's going to cost, so I didn't want to blow half of my cash for the rentals on paying off the mortgage. Although if I can get paid by everybody this month I should have enough to pay it off, depending upon some other unforeseen circumstance.
Real estate assets increased by over $4,000, but the bigger gainer was the increase in the stock market. It's been increasingly hitting new highs, which always makes me nervous, but the conditions aren't right for a major collapse. Famous last words. My net worth 2 months ago actually fell, but it more than made up for it this month with an increase of 1.6%.
So far I'm track for the overall 1% gain a month through out the year. If I can keep it up, it would put me around $750k by the end of the year. I've previously written about my concern with the chilled water system in one of my rentals. If it can't be permanently fixed then I don't know what I'll do. I have about $70k in equity for the unit that if I can't sell it for more than my loss than I will have to give it back to the bank. I would also need to talk to a lawyer about what sort of financial repercussions this could have on me. Will I still be liable for the entire mortgage or will giving them the property suffice them.
This situation has caused me a great deal of angst over the past month. I've also seriously been looking at my philosophy in how it relates to debt and risk. I hate debt! I only use it because I have to, but on the same token if you're cash flow strong, then putting too much of your equity into one investment could be a serious problem. Now that I write this out it seems obvious. It's call diversification! My original plan was to pay off said property asap, however, I may instead either build up cash to buy another property or I could just continue to accumulate cash to make a huge investment in the stock market when it accumulates again. Both would help me diversify more and also to spread my risk around. I'm paying a very low interest rate on the final property, so paying it off early would actually only lower my return on equity, versus a more profitable venture.
This website was created due to the atrociously misguided financial advice that I've heard over the decades. Financial freedom is not intellectually strenuous, but it takes discipline.