One of the main purposes of this blog is for me to track my progress to financial independence which I am well on my way to achieving. Each month I share the details of all investment accounts and the changes from the previous month.
Note: if you’re just joining us you can view my most recent net worth update here.
In March we successfully completed the rollovers of Miss QCI’s old 401k, both pre-tax and after-tax as outlined in my last post. It was a bit stressful when Vanguard didn’t follow the instructions and placed the after tax-tax contributions into a taxable account. I noticed this immediately and Vanguard did correct the mistake. When doing these sort of things “trust, but verify” is a good motto. All that is left is Miss QCI’s cash value pension. A check should be issued this week which will be placed into her rollover IRA. I also used this as an opportunity to rebalance her holdings. With this in the past we have some more financial milestones on the horizon.
As shown below our cash position continues to build. We took out a private loan in the fall of 2017 when we purchased our last rental. It was a $45,000 loan for 10 years at 4.5%. While I love the arbitrage opportunity with our low interest rates over the long term it was always our plan to pay off this mortgage as soon as possible. It is our highest interest rate and shortest term debt. The payment is $467 and we receive rent of $825 per month so paying it off will open up some cash flow on this property. We owe just over $40,000 at this point so my hope is that we will have it paid off after the May payment.
While we technically have enough cash today to pay off the mortgage, a lot of that cash is earmarked for other expenses. These are the big line items for the next month:
- Hawaii! – A majority of the trip including flights and hotels has already been paid for. Using both hotel points and airline miles cut down significantly on the costs. We still have to pay for our rental car (around $350), food and activities.
- Taxes – I learned that I have to pay in around $3,500 between state and federal taxes this year. This was a result of 2017 being a perfect storm between extremely low expenses at the rentals, unexpected website income of around $5,000 (not this blog) and some Airbnb income. As soon as I learned I’d have to pay in I began searching for a new credit card to sign up for since taxes are a great way to meet the minimum spending requirements. I also do this frequently with property taxes. (More info on paying taxes with your credit card here). One of the best sites I’ve found for quickly finding the more obscure cards with the best bonuses is Doctor of Credit. Here is a link to their best credit card page which seems to be updated frequently. I ended up with the business version of the Citi American Airlines AAdvantage card. I signed up for the personal card last year. Once the minimum spend is met we’ll have over 140,000 American Airlines miles.
- Miss QCI’s Wrist – Last month I shared Miss QCI broke her wrist snowboarding and the bills are starting to roll in.
- Electric Bike! – I’ve been thinking and researching electric bikes for quite some time. I ended up buying a direct to consumer brand bike instead of building a bike my own. My Rad Power Bikes RadWagon arrives tomorrow and I’m very excited. After accessories it was just over $1,600.
Once our mortgage is paid off on the rental we will begin to contribute to our IRAs for the year and I’ll probably boost my 401k contributions up significantly. I’m also hoping to discuss working less with my current employer in April. I have the desire to have more free time, but also think a lot about the extra money I will be giving up. At this point in my life it feels like a very selfish thing to do. Any scaling back I decide to do I want to make sure I do it slowly to ensure I am using the extra time wisely.
Mr.QCI Net Worth
Cash: ~$28,000 (+$8000)
P2P Lending: $8,249 (-$1,089) – I am reducing my allocation to p2p which will be directed towards paying off my new rental property)
401k: $75,037 (+$132)
Vanguard Rollover IRA: $84,057 (-$67)
Vanguard Roth: $38,320 (-$318)
Vanguard Taxable: $122,001 (+$121)
Individual Stocks/Other Investments: $2,018 (-$54)
HSA (amount invested only): $21,420 (-$369)
Total Investments: $351,102 (-$1,644)
Assets: $475,000 – This is the estimated value of my four properties based on the purchase price and some appreciation our area has seen over the past few years and includes sweat equity. You can see my real estate holdings here.
Liabilities (4 Mortgages): $288,570 – (Updated: January 2018 – I plan to update this every 6 months or so, but I pay down about $10,000 of debt every year)
Net Worth: $565,532 (+$6,356)
Miss QCI Net Worth
Cash: ~$23,000 (+$5,000)
401k: $105,915 (-$2,503) – This has been rolled over into the Rollover IRA and Roth IRA (Mega Backdoor Roth) below. Miss QCI no longer has access to a 401k with her new job.
Vanguard Roth IRA: $48,274 (+$12,276)
Rollover IRA: $94,616 (+$89,817)
Vanguard Taxable: $77,047 (-$580)
Total Investments: $219,937 (-$4,402)
Net Worth: $242,937 (+$598)
Investments (what really matters): $571,039 (-$6,046)
Projected retirement income (assuming 4% rule): $22,841/year
Net Worth: $808,469 (+$6,954)