Welcome to my third quarterly update which details my net worth and cash flow as at the end of September 2017 as well as the goals I have set for myself for the next quarter.
If mine is the first personal finance blog you have come across firstly I am super humbled by that and secondly you might be thinking this is kind of strange putting the info out there for the world to see.
However, it is a fairly regular occurrence with bloggers to either track their net worth or report their monthly income. For example, J.Money over at Budgets are Sexy has been tracking his net worth for over nine years now and so have a bunch of other bloggers that you can check out in the Rockstar Blog Directory.
I debated whether I should post this or not as I was not sure about how the information would be received, particular here in Australia where ‘tall poppy syndrome’ can mean anyone who seems to be doing ok can be shot down in a hurry.
But my view is that if you have come to my site which is about becoming financially independent in order to retire early then you must be a little bit open-minded and willing to discuss what can be a taboo subject.
Why I decided to go public
The reason why I think so many other bloggers have felt comfortable sharing their net worth is that they want to show you that early retirement is an achievable goal and not just some pie in the sky idea that you can only dream about.
It also helps to highlight that the wealth that you see in movies or magazines is in reality not how most people that reach financial independence actually live.
Mr 1500 days provides an awesome article over on the Rockstar Finance website that details why bloggers share their net worth so openly and my fellow bloggers sum it up far better than I could.
So for me, I decided to go public for a couple of reasons.
- To keep me accountable.
- To help me to stay motivated and see my progress over time
- To know there is an end in sight to the daily grind of my day job
So what is net worth anyway?
The simplest way to work out your net worth is to add up the value of your assets and then subtract the amount of your liabilities.
So examples of assets are things like how much any property or cars you own are worth, the size of your share/stock portfolio, how much savings you have in the bank and the value of your Superannuation (retirement savings).
Then your liabilities are those things that you owe so this can include mortgages, personal and car loans and credit cards.
The juicy details – my net worth figure
Total Assets – $2,544,871
This is down $273,262 from last quarter. This is due to a couple of things. Firstly the property we sold a few months ago settled towards the end of September. So the value of that is no longer included. Of course or liabilities reduced as well due to the loan on the property.
We also sold our main principal place of residence this quarter. It has not settled yet. So the value is still included here as an asset. We sold for a bit less than I had previously allocated as the value. So this had a small impact on our assets amount as well.
As I mentioned back in March our portfolio is very heavily skewed in property. So our plans to have a more balanced portfolio are now happening.
Our principal place of residence is included in this figure. Some people choose not to add it.
However, the reason we include it is that the place we live is also an investment property. It is dual income so we live upstairs and we rent out downstairs to tenants so it doesn’t sense for us to exclude it altogether.
After the tenants moved out we decided to sell the place and we are making a big move! You will hear all about that in next week’s blog post.
Total Liabilities – $1,354,842
Our liabilities are a lot. It’s a pretty scary figure, to be honest. But is has been great watching the figure come down after selling one of our investment properties.
The debt will come down even further when the settlement for our principal place of residence occurs in the next quarter.
Our credit card balance is back to zero and we have no personal loans.
So that leads us to the all-important number.
NET WORTH – $1,190,019
A lot of our net worth has come down to making some smart decisions in terms of the properties we purchased.
The prices in Sydney have gone nuts recently so that is a lot to do with it. But we made some large sacrifices to make the purchases we did. And we chose dual income properties to help make it easier to hold the properties.
If we had that net worth and no liabilities it would be a pretty sweet position to be in and I could be joining the early retirees as I type this. We could sell everything, like in a campervan and retire tomorrow.
But since we have two young daughters we would prefer to have a family home for them. Our upcoming move is directly related to getting our level of debt down significantly by purchasing a much more affordable home.
Kick-Starting Some Goals
My goal last quarter was to create and send live my marketing and copywriting website. Which I am pleased to say I achieved.
I still have some work to go fixing up a few bits and pieces but overall I am pretty pleased with what I achieved.
My aim is to be able to replace my full-time wage with freelance work. As this will give me the flexibility to work from home. I have picked up some more work and I am on my way now towards making strides to achieve this goal.
Like the last quarter, I think sticking to one main goal worked well. So the goal for the next quarter is to pick up a couple of regular retainer clients for my freelance business. All whilst in the middle of moving as our house settles later this month.
Next week’s blog post will give all the details about where we are moving to.