NW Update – May 2021

Another month and another Net Worth update! May 2021 was the month of real estate. We had 3 closings this month. After spending months trying to find any deals in real estate and falling flat I finally found the key to success in our current market. Purchase properties from investors that come with leases. Retail buyers don’t even consider these properties that they wouldn’t be able to take possession of for up to 2 years based on a lease.

Our net worth got a large injection by becoming vested in my public employee pension and then 50% of the bump came from investment returns. Who knows when this insane bull market will end, but with 4 rental properties I feel sufficiently more prepared for any downturn than I ever have before.

I’m still toying with the idea of including our vacation cabin in our net worth calculations. It’s a small enough % of our total NW that I really don’t think it matters either way.

Assets
Real EstateValueMonthly Income
IA Rental 3818$130,000$1,050
CO Duplex 1060$580,000$1,000
IA Rental 55th$125,000$1,200
IA Rental 15th$155,000$1,200
Cabin$55,000N/A
Real Estate Total$990,000$4,450
Tax Advantaged AccountsValue
457$77,800
401k$64,300
IRA$77,200
ROTH IRA$58,200
Spousal IRA$37,000
529$16,500
Pension$55,700$20k change from becoming vested!
Tax Advantage Total$386,700$500,000 goal
InvestmentsValue
Brokerage Vanguard$74,000
Brokerage WeBull$12,100
Crypto$46,000
Retail Business$415,000
Total Investments$547,100
Cash/SavingsValue
Checking$12,000
Real Estate Checking$7,000
Sold business note$17,000
Total Cash/Savings$36,000Spent over $100,000 on real estate this month!
Total Assets$2,014,800
LiabilitesTypeAmount
Mortgage CO DuplexMortgage$399,000
Business buyout loanBusiness$93,000
Mortgage IA 55thMortgage$95,000
Mortgage IA 15thMortgage$95,000
Total Liabilities$682,000
Total NW May 2021$1,332,800

Increase/Decrease single month
$64,000

May 2021 Goals and reflections

  • Set ourselves up to max the 529 each year for the next three years. (already done for 2021)
  • $2,000,000 NW by April 2024 – May21 update- Consider moving goal posts to quit F/T job. Other avenues to get health insurance to cut 1-2 years off. Rental property income is strong and won’t make the NW goal as important.
  • Closed on 2 rental properties in May 2021. I am not actively shopping for investment properties. The market is not great for remote buyers.
  • Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
  • Invest $25,000 in cabin by April 2023.
  • Continue to max 457 and 401k until April 2023 – get pre tax to $500,000

Things to note for the coming months of 2021.

  • I’ve already achieved a June 2022 goal related to rental properties. I’m going to slow down and think through next steps. With the current real estate market and us having $1mil in real estate; building up cash to purchase aggressively in the event of a turn down might be a better play. If the market continues to rise then we are still doing well with a large real estate portfolio and if the market takes a dump then we have the cash to buy up entire city blocks.
  • Look into a Solo 401k or SEP IRA for my business income. I’m finding the rules extremely complicated with our situation – Single earner, many sources of income. The IRS has lots of avenues to tax shelter massive amounts of money and now is the time to put energy into that.

NW Update – April 2021

Another month and another Net Worth update. Despite some expensive hobby purchases, bordering on excessive to drop at once, we still increased our Net Worth by $56,200 in the previous 30 days. That is well ahead of track to be at $2 million by April 2024, but this massive bull market can only last so long. I continue with my goals to move as much after tax savings from equities to real estate as possible.

We have a $122,000 real estate purchase with a tenant already in place that will close mid May. This is on track with the goal of purchasing 3 rental properties by June 2022. This property is the first rental property I’ve purchased that I’ll be using traditional commerical financing. I’ll write a detailed report of how that goes in a future post. For now, onto the updates.

Assets
Real EstateValueMonthly Income
IA Rental 3818$130,000$1,050
CO Duplex 1060$580,000$1,000
Real Estate Total$710,000$2,050
Tax Advantaged AccountsValue
457$75,000
401k$62,200
IRA$78,200
ROTH IRA$58,000
Spousal IRA$37,000
529$16,500
Pension$35,800
Tax Advantage Total$362,700
InvestmentsValue
Brokerage Vanguard$68,500Moved all single stocks to Real Estate checking
Brokerage WeBull$12,100
Crypto$50,000
Retail Business$415,000
Total Investments$545,600
Cash/SavingsValue
Checking$61,000BIG spend on Astrophotography this month…..
Real Estate Checking$67,000 (multiple closings soon)
Sold business note$17,000
Total Cash/Savings$145,000
Total Assets$1,763,300
LiabilitesTypeAmount
Mortgage CO DuplexMortgage$399,000
Business buyout loanBusiness$95,500
Total Liabilities$494,500
Total NW April 2021$1,268,800

Increase/Decrease single month
$56,200

April 2021 Goals

  • Set ourselves up to max the 529 each year for the next five years. (already done for 2021)
  • $2,000,000 NW by April 2024 – Current FI goal date.
  • Continue moving after tax investments from apps and into real estate; purchase 3 rentals by June 2022. – Under Contract with 1 property to close in May 2021
  • Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
  • Continue to max 457 and 401k until April 2024 – get pre tax to $500,000

Things to note for the coming months of 2021.

  • $54,000 going to cabin purchase in May 2021. This will be a hobby/luxury expense and will not count towards the $2mil NW goal as it will be a liability property with additional expenses and will not be monitized.
  • Closing on rental property 2625 Mid-May with a mortgage. 20% down at 4.125% for 30 years is just crazy.
  • End of May/Early June FireDad’s pension should double as I become vested.

Setting yourself up for post FI/RE success – Setting Goals

If you are a consumer of Financial Independence content on a regular basis then you can’t ignore that there has been a MASSIVE uptick in the people who have really struggled 2-5 years into their retirement. 

It makes sense though, depending on how you measure the growth of this movement, there is no denying that it has grown to a scale no one imagined. It’s also been around long enough that there is a sizable population that has been early retired for some large chunks of their lives. Nearly all of the earliest FI bloggers have been retired for years and many of them decades. Some of them are starting to admit online that they got slapped in the face that “money doesn’t buy happiness” still applies if you live frugally. People need a purpose.

I follow plenty of the bloggers who have been varying levels of happy and content with their choices, but the takeaway that I heard “was that burning your life energy away to reach that FIRE finish line at all costs is a miserable decision and might even be worse than the “normal” folk who work until 63”. I also took away that nearly everyone who seemed happiest among the FIRE Giants out there is that they all had some form of meaningful pastime that they pursued very purposefully. 

The fear of the post FI regret was all too real for me and in searching for guidance on that issue I found the Die With Zero book I wrote about. Elements of that book are exactly what I needed to guide my decisions with less than 5 years to go until our FIRE date. 

Invest in hobbies and interests I’ve always been interested in. I’ve done a lot of thinking about what would produce the most happiness in our family compared to actual dollar costs. Here is the current list to achieve:

  1. Spend as many clear nights as possible looking at the stars, when covid ends, reach out to astronomy groups, clubs and observatory in walking distance, consider volunteering there. I’ve spent too many years wanting to study astronomy and it’s so silly I never have. That stops; it’s time to live more intentionally.
  2. Invest in my health to ensure I never am the slow leg when taking our family on adventures.
  3. Show our children as much of the US as possible, every national park at the very least, and hopefully for months or years at a time. Anything is on the table to achieve this. 
  4. Increase our knowledge of homesteading, including doubling our growing capacity in the next two seasons.
11pm

Some of these are personal and others are shared goals of our entire family. I expect that when we reach FI/RE and are truly comfortable while being able to achieve these goals that we will be giving our children a better childhood than anyone I’ve ever met experienced. 

In the end, all of these goals point back to the only goal that really matters. To make sure we give our children the best life we possibly can.

So You Wanna Buy A Sports Car?

Some of us are just born with a love of cars. It runs deep in our blood. I believe that electric is the future, but I  also believe that a naturally aspirated engine with perfectly engineered steering can create religious experiences. So whenI hit the age, income and NW to comfortably start thinking about a purchase this ridiculous I knew I had to do it right. I knew my wants list and for today’s blog post we are only talking about wants. Anyone that says a sports car is a need should really check themselves at the door. 

My wants list was pretty small but pretty specific: it had to be a manual transmission, regular maintenance had to be DIYable, I wanted it to be daily drivable and trackable, and I wanted it to be a Porsche. 

After a ton of research I settled on a 1999-2004 911 4S also known as the 996 generation. If you’re not into cars the story of the 996 is fascinating. If you are into cars there is a good chance you’ve heard about it by now as the secret is starting to get out. 

The Porsche 911 is the flagship sports car. Every generation over the last 50+ years has been beautiful, powerful, fast, fun and track ready from the factory. For this, and many more reasons the Porsche 911 has held its value surprisingly well and in lots of cases has become worth more than the original MSRP for good models built before 1999. You see in 1999 Porsche made a few changes to the 911. First it went water cooled from air-cooled which was pretty much necessary to keep up with the performance of competitors. They also implemented some changes that  most automakers do of sharing parts across models. The cardinal sin of the 996 was sharing its headlights from the Boxster and going away from the classic 911 round headlights. 

There are a few other gripes about the 996, but the truth is that at its heart and core the 996 is a 911. It drives just as good as it’s more expensive brothers and sisters and it does it for less than half the cost of nearly every other generation. Here is mine – a 2004 911 Carerra 4S.

996 backcountry

I bought this car for less than the price of a new Camry including delivery and some minor repairs. I’ve had the car about a year and in that time it has actually appreciated about 15% from what I paid. That’s the funny thing about sports cars – the markets fluctuate and if you spend the time researching you can clearly identify vehicles that are undervalued. I’m not advocating for trying to make a profit with your sports car addiction I’m simply saying that you should make the purchase smart and with some forethought. Other than maintenance and repairs the cost of owning my very own piece of vehicle art will cost almost nothing. Meanwhile a 2020 Carerra 4S is $127,900 before options. Ask yourself if you want the car for the status or to maximize your enjoyment for every dollar spent? 

I will always take the approach of maximizing my dollar spent. I drive a car that I had a poster of in my locker in high school and my total cost of ownership so far is less than a fully loaded Kia. I’m into this car for under $30,000 and it’s a pristine example. You can easily find amazing, exciting cool cars for so cheap if you just know the markets. I actually found a friend of mine an Aston Martin Rapide for $52,000 a few weeks ago. It was a 2012 with 40,000 miles.The original MSRP was well over $240,000. He had always wanted one, is pretty close to a Fat FI/RE number and was blown away when I found his dream car for less than a new F-150. 

Do your research, learn the market and buy used but reliable. It’s a great experience to learn the known issues of your dream car and how to wrench on them yourself. It’s a far more rewarding experience to have something you need to take care of rather than walking into a dealership and signing up for a giant loan. 


In 2019 85% of new cars were financed and 56% of used cars were financed. Exotics are financed at a rate of 89%. Imagine having to make a monthly payment on something you can’t even use every day, doesn’t that sound miserable? I don’t think I could enjoy my beautiful sports car knowing it was chained down with debt.

The principal of buying used, learning the market, being an educated buyer and paying cash are principals that apply to nearly every major purchase. Whether it’s a house, car, boat, vacation home, plane, yacht, villa, or island the same rules apply. If you do what everyone else does you’ll learn nothing, gain nothing and be stuck with payments the rest of your life. Who wants that?

I remember my grandpa working on old mustangs and ancient fords he pieced together from junk yards. He was a child of the depression who didn’t go to high school. I’m still working on being as frugal as he was, but those skills made their way down the bloodline of finding the right deal and doing as much of the work yourself as you can.