Now that I’m older and therefore wiser, it’s time to get my savings back on track – and that means some big changes.
Times are good – my shares are volatile but profitable, my tenants are paying rent as planned, and I still have a job. And yet, I can’t get my savings rate out of second gear.
Property expenses continue to drag down my savings. Insurance has increased 20% from last year; council rates are up as well. I had to pay both of these in one hit this month.
Unlike my landlord, I actually look after my tenants and my properties, but with flat rents I’m not being rewarded for it, and ultimately it’s costing me. It doesn’t help that my property manager doesn’t seem to like answering my questions.
The next few months could go either way. I could leap over my short-term-target net worth of 100K, or continue to fall dramatically short. How? I will be putting one property up for sale very soon. This has been planned since the beginning of the year, and with two months left on the tenants’ lease (and my renewed hatred for real estate agents) the time is right to reduce my crippling debt.
Moving on, my shares have copped it, for no fundamental reason – they’ve just been caught up in the recent sell-off. Had a nice recovery of 2% today though, it’s all swings and roundabouts really. Once I cash out of property, I’ll be able to finally enjoy some sexy compounding:
Here’s how I fared in my first month as a 26-year-old:
2 houses on large blocks, still standing. Total value now at $440K with $380K debt. Interest only loans. Equity: $60K (No change)
$6,291 in an offset account, saving me 4.19% in interest. (Change: -$3,383)
Previous net worth: $94,590
Current net worth: $92,339 (-$2,251)
Swing and a miss! I’m still miles from $100K. Once I offload my properties, things should start to improve. Until then, I just need to keep chipping away I guess. My landlord also asked if we would renew our lease at a higher rate – even though they never fix anything. My response? This Youtube video sums it up.
COUNTDOWN: 48 Months Until I’m 30
It’s now been 37 months since I started investing & my net worth has grown at an average of $2,495 a month. Even with my shithouse savings rate, this is a return of about 8.3% p.a. Looking forward, this will actually grow to around $273K by age 30.
This doesn’t include my super, HECS debt, or my fully sick highly collectible V8 and dirt bike.
July next. Hopefully I’ll have some good news then. Chin up, old bean.