Path to a Million: 2017 Q3

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Another quarter, another net worth update. This time is no different. My laser focus on keeping a tight budget has ensured continuous success with my net worth slowly but surely climbing through a combination of debt reduction and asset appreciation. I’m adding more to liquid savings, increasing retirement contributions in addition to accelerating my debt payments.

The importance of both sides of my balance sheet moving in the right direction at the same time is that it’s an indicator of the fact that I am finding ways to increase my household income. Whether it is a special project, a real estate transaction, a consult or even a travel stipend, our income has not remained stagnant. Often times, you may find yourself only able to move one side of your balance sheet. You can pay debt faster or you can save more but not both. That’s often a sign that there isn’t more income coming in and it takes one set back to undo all your hard work. Incremental changes matter but never miss an opportunity to accelerate your goals.

In any event, I am up nearly $22k for this quarter, a pace which could put me well over the 1/2 million mark this time next year and it motivates me even more. Updating this spreadsheet is borderline therapeutic. It is the balm that soothes any sting I may feel from not buying a new purse, packing a lunch or passing on that watch I’ve been coveting. It reminds me that there’s a greater purpose: seeing that ‘Student Loan’ line item say $0.

 

NW

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Solar Update – September 2017

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It’s time for another usual event: getting excited over receiving my utility bill. This year was my first full summer with the panels and I am pleased to report that they are performing as expected. I’ve had negative balances consistently since May which means not only do I not have to pay for the electricity, I’m producing more than I am using and thus I am accumulating credits for the colder shorter winter days. While our electricity usage spikes in the winter due to the continuous use of the heating system and we will not have enough credits to cover the entire winter, we are still likely to cover at least one full month of electricity with the credits we have accumulated since spring.

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Actual electricity bill for August 2017

If you’re curious what a full year of panel use looks like financially, take a look at the image below. For context, my house is 3,100 square feet and all of my appliances including clothes dryer and stove are electric. We also have central AC and the heating system is powered by electricity. We have 2 refrigerators and well water which uses an electric pump. This is not a typo. Between August 2016 and September 2017, we paid less than $500 in electric costs. That’s not even 2 months of cable in my house. How much would you save if you were powered by the sun?

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One year of usage

Fraud Alerts, Hacks, and Insider Trading

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You’d have to be under a rock to not have heard of the Equifax hack that exposed the personal information of millions of customers (143 millions to be exact) that amount to essentially 1/2 of the entire U.S. population. It’s alarming and frustrating because the nature of their organization does not allow us to opt out of their business model. If a hack of that magnitude occurred at my financial institution, I would simply take my business elsewhere. But, the way our credit system works, we do not get a say as consumers. If you have a pulse and you have any credit history, at least one, if not all three credit bureaus, will have a lot of personal information about you.

If you ever looked at your credit report, you’ll see that almost everything except your medical history is included (past and current addresses, employers, account balances, payment history, phone numbers, etc.) If you think that’s alarming, I’ve got news for you that should make it worse: honestly, there is nothing you can do about those organizations having your information other than living off the grid like those crazy cult people (who may be on to something) who shun the use of credit, social security numbers, and civilization altogether.

While you can’t keep the information from getting out, you can prevent someone from using it for nefarious purposes. After thinking it over, I decided that the 7 year credit freeze was overkill and instead opted for a 90-day fraud alert. The fraud alert allows me to block any attempt at applying for credit without the potential lender first calling me on the phone to verify that I am indeed the one applying. It is free, fast and convenient to do, and best of all, you only have to contact one of the three agencies as they are required to notify the other three. The alert lasts 90 days and you can keep renewing it every 3 months. You can do it over the phone or on any of the three reporting bureaus’ website (phone numbers and links below).

See below for their contact information and good luck! If you’re concerned about your information being in the hands of criminals, just think of it that way, at least you have it better than the three Equifax executives who will probably end up in jail for insider trading. I hear prison food is terrible.

TransUnion
1-800-680-7289

Experian
1-888-397-3742

Equifax
1-888-766-0008

Not Saving Could Cost You Your Life

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I am glued to my screen, just like every other American, watching in horror as disaster after disaster ravage the Caribbean and southern states. As I see the images unfold, I watch with sadness but also with frustration as news networks routinely interview people who refuse to refuse to evacuate.

While I understand that some are not leaving because of pride and in part because they may believe that the media is overplaying the seriousness of the storm, I’m also starting to realize that some people are not leaving because they simply cannot afford to. They don’t have the extra funds to cover hotels, gas, and food on the road. While that is not an adequate excuse given that shelters are free, it doesn’t change the fact that shelters do have capacity limits and there will always be a significant number of people who have to pay for a hotel out of pocket.

Despite the glamour of South Beach, the city of Miami which is projected to be one of the most affected parts of the state has its underclass. With Florida having a sizable senior population on fixed income, the fact that it is a red state where wages are lower and the fact that there is a large immigrant population all mean that many of those in the affected areas do not have a lot of disposable income. That usually means that people are not saving like they should be. I am certain I have said this in the past, but if I have not, let me say it now: in a capitalist society, a lack of resources can be dangerous if not downright fatal. Even when hotels are $50/night, that seemingly bargain basement price can seem like an insurmountable sum for someone who is in the red every month.

This storm was announced 2 weeks ago and some people still couldn’t make it happen. The very nature of an emergency is that it is unexpected. We can’t possibly know when every tragedy is going to happen. The best we can do is to be prepared to minimize its impact. Stay out of debt, save and have a plan that fits with the risks of your specific region. Government resources are limited and we cannot anticipate that we will always get help in a timely fashion or that assistance will come at all.┬áStay ready so you don’t have to get ready. Let this be your wake up call.

My thoughts and prayers are with everyone affected by our recent natural disasters, including the recent earthquake in Mexico. If you are in a position to donate, do so at your local level so most of your funds can actually do some good rather than getting eaten up by large overhead at giant corporations. If you can’t afford to donate, volunteer your time. If you’re too far, please remember people always get hurt in these tragedies and you can give blood no matter where you are in the country.