Final Numbers for 2023 and Predictions for 2024

Here we are at the end of another year of navigating my journey to FIRE. It has been a great year with a lot of financial growth. As usual my expectations remain conservative when compared to the results achieved, and I will keep it that way. This means, at least to me, that I am being objective, managing risk properly and setting up clear and attainable financial goals.


Inflation was supposed to be transitory according to Janet Yellen. But that was not transitory at all and it was a horrible low punch this past 2023. However, with no car payments on any of our vehicles the elephant in the room was food cost. It seems like a far away past when we used to spend about $300 in groceries every two weeks, whereas now we are at about $900 for the month at least.

We also had a lot of repairs that were kind of pending and we tried as much as possible  to spread the expenses out through the year. One of them and probably the most costly was the repair of our house’s fireplace chase cover. It is just a stainless steel sheet that sits on top of the chimney. We were getting water all the way down in the basement every time it rained. A simple repair, but expensive. That ended up shaving $2,000 off our hard earned cash. 

My old, trusty Corolla that is now in the hands of my oldest daughter also cried out for some repairs in the amount of $650. That was the cost of a new gas tank and the labor to install it. It also needed the oxygen sensors replaced which came out to about $350. That car has just turned into the world of 200,000 miles!

One of my rentals fences also required some attention so I ended up spending $1,600 to replace the old, raggedy, wooden fence for a snazzy vinyl white fence. The best of all? I paid someone to do the job and my back didn’t suffer one second of stress.

My other rental also had a plumbing issue that was out of the ordinary. The bathtub got clogged… potentially from the previous tenant who was very careless with her kids. That came out to $350 for unclogging the tub and later coming back for a replacement of the whole drain underneath. In the end it required accessing the tub through the wall in the laundry room behind the washer and dryer. It was a big job for sure, but again I did not expose my back and joints to the pains of contorting my body around the washer and dryer. I happily paid for the work and checked the work some weeks later. Luckily I have a plumber that I can trust.

All in all, it has been a lot of repairs and extra expenses including activities with our own family.

Inflation Mitigator

I never thought this would happen but my wife got a job!!! She decided to go back to teaching and that granted us extra 55K a year. After 17 years of living on one income, now we have all this extra cash which is a tremendous help; minus taxes that is. However, as I mentioned before, with the high cost of food and all the random expenses it felt like it was barely making any difference. Although, this extra money did put us in a position of “Thank God we have this extra money.”

The Numbers

I left off 2022 with a net worth of $528,000. By December 31, 2023 the closing number is…drumroll……An amazing total of $680,000!!!! An increment of $152,000. More than my take home or gross salary by far! A 28% increase!!

Rents this year have been steady and I am considering raising rent by very little with the intention of keeping the same renters, who have been reliable so far. I am planning to increase my contribution to my 457 and 403B plan. However, 2024 will be the first year when I face the huge hurdle of putting one of my kids through college. I already filled out my FAFSA part and it all points to the fact that I should not expect any help or aid for my child, because I am a millionaire on paper. The only thing that I can expect from the FAFSA is the possibility of contracting huge piles of debt… which I will not do. My kids all have great grades, 4+ GPA, honor classes, etc., but that has no relevance unless you have some sort of sports talent that will grant you a massive scholarship or a full ride.

Growth Prediction for 2024
Mortgage mo.Rent mo.Rent cash flowYearly
Mortgage A1283.0024001117.00$13,404.00
Mortgage B1760.002700940.00$11,280.00
Mortgage C1152.00Offset by short term renting$0.00
Savings from W-21216$14,592.00
Tax return$14,000.00
Property appreciation1,501,0003% growth$120,080.00
403 Plan974618% growth$7,796.88
403 contribution$23,000.00
457 contribution$3,900.00
Total growth for 2024$208,052.88
* If growth is similar to 2023, 28%, the growth would be $190,000. Cummulative Growth$888,053
Net Worth 2023$680,000
I believe I could be crossing the 1 million dollar line in 2025

According to my calculations I could be reaching far into  $800K. That is beyond my wildest dreams! And with that same token if things keep unfolding this way I anticipate I will be reaching the million dollar threshold at the end of year 2025.

Speculations 2024

The big guess to make being a presidential election year is who will win this election. Without getting too political I am afraid that Joe Biden may get the same kind of punishment vote that Trump received in the 2020 elections. I sense a lot of frustration with topics such as inflation, immigration, impunity for criminals, and the inclusivity agenda with the LGBTQ community-particularly with the trans and queer. Beware, I am not saying I agree or disagree, this is simply what I sense as important topics for voters. 

Abortion is another hot topic in my opinion that is playing against the GOP. But anyway, there are many different scenarios that may play out in these elections. If Trump actually runs against Joe Biden I think Trump will win or it’ll be a very close race. If Trump is disqualified and can’t run I believe Niki Haley will be the GOP front runner and for the first time in history a female President of The United States of America. I guess I don’t have a lot of faith that Biden is going to win the elections.

How will this affect the economy? I have great expectations for 2024 and even more so for 2025. The Feds already mentioned lowering rates 3 times for 2024. I think that as soon as the spring hits real estate is going to skyrocket some more. The housing inventory continues to be short of what is needed to meet national demand. I think that people will start trying to get in the market and buy with hopes of refinancing down the road, which will make demand for housing increase along with prices. 

2025, particularly with a Republican winning the presidential election will be perceived as a pro business administration with maybe some more extra perks for corporations and bring some form of economic expansion. If you have real estate investments I think this could push your net worth up significantly. But all these thoughts are nothing but speculations of mine and the economy.

More than anything, in these times of world chaos… I am hoping for peace in this world.

I would love to hear your thoughts, predictions, speculations or suggestions. How are your resolutions and expectations for 2024? 

Half-Way There!!! 2022 Growth and 2023 Personal Financial Prediction

Current Political Panorama

Here we go, ready for another exciting year on the path to financial independence. I usually do this post in the month of December rejoicing over the financial results of a great year. However, 2022 was not the greatest. I had two shitty tenants, and like all of us, inflation has made everything a bit more difficult for this family of six.

The Numbers

The growth prediction for our net worth in 2022 was $84,911. I anticipated a 20% increase back in December 2021. If you are interested in the breakdown, read my January 2022.

We had many different struggles this year. First of all, the pesky tenant who ended up being the lover of an unscrupulous lawyer. Once the tenant left there were about $2,000 in repairs including painting, carpet restoration, doorbell repair and some other random things along with about 35 hours of work that my wife and I did in 3 days.

What truly made this tenant swap expensive was a new air conditioning unit that added $3,500 to my yearly expenses. Unfortunately, every spring  the old unit would run low on gas. My family and I were happy paying about $120 every spring and that would cover the AC needed gas for the year, and saving ourselves the money of a new unit.

Unfortunately, the tenant was running the unit at 62 F during 90+ F days. Needless to say, the one charge of gas would not be enough; I don’t even think a brand new unit would have been able to keep up with that abuse.

The AC became a point of friction , and as a matter of fact, she tried to use the AC as a crutch to delay her moving-out date, claiming that “the unit was uninhabitable.” Thanks to my AC contractor, her tactic didn’t work. We got it fixed for the last 6 days she had left in the house and then we went ahead to replace the unit. The downside was that I had to pay $180 even when I knew I was going to replace the whole unit; that was better than keeping the tenant longer and messing up the schedule with the new people coming in.

More Problems…

Then there was my other tenant, who had endless problems with the plumbing of the house including the flushing of an adult diaper down the toilet.

I could truly write a book about this one but I will keep it short. This tenant was taking a night shift to make more money, leaving her two younger kids under the care of her other 2 teenager kids. Needless to say, that didn’t go very well. From the oven door gasket ripped off, the thermostat ripped off the wall and glued back on, vents full of food swept from the floors along with tooth flossing picks and candy corn…I am surprised we didn’t have an infestation of rats in the house. And of course….she wants her security deposit back, and wants to sue me.

This was an expensive flip. About $3,000 in repairs and about 60 hours of work.

In the meantime, the government has granted her the ability to move to a beautiful house where she will be paying $2,800 in rent and will continue driving her SUV Mercedes GLC whatever number it is. Unreal!

These two tenants I knew from the beginning were risky and I can confirm that in hindsight, that I was absolutely right. I consider myself lucky now that I got them out.

Our Short Term Rental

Our vacation rental did amazing. We got about 16K from renting through the summer and a few fall weekends. It sounds like a lot, but there are a lot of expenses involved such as having a cleaning service, management, repairs, and improvements that occur throughout the year.

We also had the bad luck strike with a humongous tree that fell right behind the house. It was going to cost $3,800 to get it removed and all cleaned up but due to a big misunderstanding on their original proposal we were able to get the job done for $2,000. Great price but still I was not expecting that extra expense.

We had our share of shitty people here too. One party claimed that the house was infested with rodents and requested a full refund without giving us a chance to get the property manager on the scene; they abandoned the house.

After getting our manager to the house we made sure to take pictures of the same things the guests were claiming to be mouse droppings. It turned out to be lint on the stairs and little marks on the wooden floor. Although, coupled with the movement of a handheld cell phone, the picture made it look like mouse scat.

Luckily Airbnb reviewed the case and after some time they sided with us.

We also have someone complaining about swimmer’s itch in one of the lakes, and a couple of people who were not very clean in the kitchen.

Other Expenses and Hurdles

Along with all those unexpected expenses we also had: the continuous orthodontic treatment bill for two of my older kids, summer camps, our own vacation in Michigan, some hefty car repairs, and affording the new cost of food. We especially felt the effects of inflation during the time my mom stayed with us for 4 months and my brother came to stay for two weeks.

But with all that, the numbers are still strong for the end of 2022. We got to increase our net worth to $527,926. That is $115,574 growth!!!! It’s unreal to think how much I have to work at my 9-5 to only bring in $105,000, which in reality is more like 68K after taxes and all deductions. That is a freaking 28% increase in our net worth despite a real estate market rather tamed during 2022 and a bearish stock market.

Predictions and 2023 Expectations

Well, on one hand I had a year of dealing with shitty tenants, but now I am simply enjoying my tenants. In one house I have a retiree with her adult working daughter and they are simply awesome. They are taking great care of the house and are very independent.

Our other rental always goes to a recipient public housing aid due to the area where it is. In previous years in an effort to maximize profit I have rented to participants with vouchers for 4 bedrooms. This time though, I decided to go with a 3 bedroom voucher participant. The amount of rent will be $100 higher than what it was but instead of having 6 people living in the house I will have only four and no children under 8; it is unreal how destructive children can be!!!

Growth Prediction for 2023
Mortgage mo.Rent mo.Monthly Rent cash flowYearly
Mortgage A1283.0024001117.00$13,404.00
Mortgage B1760.002700940.00$11,280.00
Mortgage C1152.00Offset by short term renting$0.00
Savings from W-2716$8,592.00
Tax return$14,000.00
Property appreciation1,392,0003% growth$41,760.00
403 Plan751188% growth$6,009.44
Total growth for 2023$95,045.44
*That would be a 17% growth
* If growth is similar to 2022, 26%, the growth would be $137,182

If everything goes somewhat as planned…my calculations tell me that our net worth should see an increase in the range of 95k-137k.

By maintaining this kind of net worth growth we should see our wealth cruising the million dollar line by the end of 2025. I am excited about that! I never imagined that I could someday consider myself a millionaire but we are getting closer and closer.

Happy Belated New Year 2023!

How to Deal with Shitty Tenants: Always Follow your Gut Feelings

I kept wondering if I had rent my house to Carter Hayes(Michael Keaton) in Pacific Heights

First off, let me put it out there… I am not an English native speaker. I don’t blog because I am hoping to write some awesome essay that would make Steinbeck or Jodi Picoult drop what they are doing and feel touched by my eloquent words. As a matter of fact, from now on I will proofread less and less so I can write and post more.

I want my story to inspire others to believe in themselves and realize they also can achieve FIRE. It has taken me 7 years to get here; actually 4 seriously planning FIRE- Financial independence, retire early. Before those four years I was trying to get somewhere in the middle of a very dense fog. 

Here we go with the post…

 Everything is great until it’s not. And we don’t know when the bad times will come knocking on your door. As a landlord, it seems like turbulent times always occur when your tenants decide to move. At that point all that charm they had on for the walk-through to gain your trust and get to live in your place is gone. Now all the sudden the property they couldn’t wait to move in is not good enough for them, and landlords are just evil people looking after themselves.

Well, this has been a year of great experiences and learning. It was certainly a stressful time but after all, it was a pretty easy transition from one tenant to another. My biggest lesson, which is always the core of my beliefs, is follow your freaking guts. My gut feelings have never been wrong when it comes to choosing tenants to work with.

Last year, after my tenant decided to break the lease around the month of October. I set off my wheels in motion to find someone else. I went through my usual tenant-finding protocol posting an Ad on Zillow and started screening people. I found this lady who seemed pretty nice except for the fact that she had a long and cumbersome story to follow. That is a big red flag right away! I liked the fact that she mentioned from the beginning that her credit score was a wreck, so there was nothing to hide there. However, she credited her poor score to identity theft, which made it seem more unusual. She was supposed to be rebuilding her life with this man who supposedly was just finalizing his divorce. A real estate lawyer who, according to her, makes half a million dollars a year. She didn’t know how unimpressed I am by these claims but I refrained myself from telling her “I don’t give a crap.” I let her have her glory..

After some back and forth I decided to give this lady a chance and run her credit. Holy crap!!! I have never seen such a messed up credit report. The funniest is that between the days of our conversations and the time when I ran her credit report there were two new credit cards opened. Like seriously?! Over 60k in debt, late payments and you are opening cards to buy from Victoria’s Secret?!

All these bundled up together in a nightmarish tenant prospect. Needless to say, I had to say “I can’t rent to you.” This was trouble in the making. I turned her down. 

It was late October and the idea of having the property vacant for the holidays was getting real. This lady was still calling me trying to talk up the lawyer she was with, and how his credit record was outstanding. So, against my gut feelings I decided to run his credit. Nothing really impressive. Just another high income earner with a shit load of expenses and debt, masked by some fancy sports ride. 

I decided to roll the dice and rent to these two. Besides the rent being on time, which it helped, it was always a weird vibe with her; just like the one I had from the get-go. Lots of stories justifying things that didn’t need explanation or I didn’t ask about…weird! Somehow the guy never moved in. Her kids didn’t look that well taken care of, fast food getting delivered to the house all the time, even in the middle of the night. The bitter smell of poverty took over the garage with a rancid cigarette smell as if someone was collecting the whole city’s ashtrays there… a nice 2018 SUV on the driveway, which of course, she had bought it because it was given to her for such a good price…just a total f-ed up situation unfolding.

Then, in the inside of the house the boxes never got sorted out. It was boxes all over for over 4 months, until she decided to empty all the boxes together on the floor and just kind of go from there. The house took the brunt of her negligence. The carpeting didn’t enjoy the putty, slime and whatever else the kids were playing with unsupervised. Really a sad situation. Everything had been renovated and move-in ready for her and her family and she just couldn’t manage her life.

Fast forward three months and she lets me know that she will have to move because the lawyer she was rebuilding her life with was not getting divorced at all. He was just having an affair with her. This didn’t sound very convincing but oh well. She wanted to make it seem like he cheated on her and she was a victim but now I realize that they knew very well what they were doing. I know this because her next landlord called for a reference and they had the same divorce bullshit scheme set up. Two pieces of shit in a pod, definitely deserving of each other.

Then, things got worse because the lawyer was trying to make me accept his alternative facts. According to this a-hole stains on a carpet were normal wear and tear and there was really nothing he should be responsible for.

When we got to the finish line of the moving day, she did move. Although, she had tried to create some delay by breaking down the air conditioning in the last few days before moving, fearing that she couldn’t find anything where to move. She was running the AC at 60 F during hot summer days of 96 F. Finally, the AC gave up and she threatened me with having to abandon the house because it was too hot for her to pack, which consequently would have put her days behind with the move. Thanks to having a great team of people I work with, that was fixed in just hours for just $150. I was actually on vacation out of state during all this, enjoying life with my family.

Finally she moved out. It took me 3 days to restore everything. My major concern was the carpet because it was old to begin with, but my carpet guy did an amazing job and restored it for just $200. Truly an amazing job. I couldn’t believe it. I really thought I was en route to replace it. I had to retouch the paint inside, Lysol the walls, wipe and clean everything, repainted the garage and I decided to replace the AC. I stretched the life of the AC by replacing its motor when we bought that house and moved in. It was time to get a new unit and have a peace of mind.

All in all, I spent $1,500 restoring this property, plus the AC. I put in about 36 hours of work. I am not happy about the time I spent restoring this house but if this is the worse I have dealt with…whatever! The tenants think they screwed me over. I received $29,950 in the form of rent  minus the $1,500 and the 3k for a new AC unit. That AC unit will last me at least 15 years. I have really nice tenants now who signed a lease for two years and I was able to rent for a bit more ( $150 extra a month in rent or $1,800 a year); better than W-2 job raises.So things are just awesome!

These were the worst people I have dealt with.  Absolutely, low-life scumbag trash. The lawyer was probably the worst of the two. A man, who feels entitled because of his profession and income, but who at his core is not worth a dime. No word, a liar, a cheat to his family.

The security deposit was of course a sticky point. I got to the point where I just wanted them out of my life; especially when I was about to have such a great family(tenants) coming in. Unfortunately, the lady was such a mess that she also ran a bill with the electric company that serves our community. Her “fiance” didn’t know about it. But this is how these shitty people operate. They try to run a bill with services at the end  or get them shut off so you find yourself without electricity or water so your work or inspections get delayed. They try to make you lose time. Of course, her partner in crime wanted me to still give him his security deposit claiming that he had nothing to do with it even when he was on the lease. He pushed his way around, threatened to sue me and make my life miserable. “I will drag you to court for months on end and write a pretty big bill” he squealed on the phone. He even threatened to sue me for defamation if I sought legal help. What a scumbag! I ended up getting a lawyer friend of mine to represent me. Long story short, it was all bullshit. He had to pay his bill and got the leftover of his money. Sorry, but that’s what happens when you got expensive hobbies like cheating on your wife and kids with a junkie (She had  some public court records as well). 

I hope I didn’t make your head spin with all this drama. The reason why I wanted to share this experience is because many people hesitate about getting into real estate thinking of these shitty people you have to deal with. For sure, at some point or another you will have to deal with them; no doubt. However, as you see, the outcome doesn’t have to be the end of your financial and wealth accumulation journey. As long as you do the right thing the shitty people will move on to continue screwing up their lives and you just keep going forward being more efficient and wiser with your money.

What I learned from this experience

If you are dealing with a sleazy lawyer and you know that you are acting within reason but they are trying to push you around, don’t waste time. Hand the case to a lawyer.

This piece of shit should have been brought to a small claims court with prime seats for his whole family to watch the show unfold. But you know what? Not worth my time.

I allowed this to go on for too long, fearing that my tenant would have groupies in the court system waiting to shred me apart. It was all bullshit. The law is the law. Once I got a lawyer representing me, it was the end of it and he paid what he was supposed to.

Always follow your gut feeling. If you are interviewing a candidate for your rental and they go on and on about random stories, with explanations and excuses that don’t seem to add up, just move on. If the beginning is rocky, the end will be a nightmare.

Having a real estate business is a risk management deal. You can wait until the tenant of your dreams comes to you risking having a vacant property, or you can rent quickly with a tenant that is somewhat OK or shitty and then manage the situation the best you can. I think that to our advantage technology and credit reports have helped us to avoid the worst of all, which is not collecting rent. The rest is a juggling act handling people and risk.

Remove yourself from the role of homeowner. Be your own employee. This has really helped me to manage my temper with the asssholes I have had to deal with. Every time I run into a situation with tenants, I think of myself as someone who works for a property management company. This allows me to have good customer service, de-escalate situations and keep the business running. For example, with this lawyer situation instead of going off and telling him to go and  f— himself, I would say something such as, can we try to find a reasonable solution to this? What would be the ideal solution for you? Of course, sometimes this is taken as a weak position by a-holes and they think they can take advantage of you, but all you have to say is “I am sorry I can’t do that.” Worst case scenario, that’s what you use lawyers for. 

It is critical to keep close track of expenses. There will be many times when you think to yourself “enough of this shit. I’m sick of dealing with these people.” Then you look at your numbers and you realize that your situation is not bad AT ALL!!! Getting 30K in rent and shelling out just 1.5K to keep the business running at a higher rate of income? Not bad at all.

I can’t think of any other business that will be so profitable as real estate! At least not at my reach as a simple mortal.

I have been a landlord for 7 years. My portfolio is not very impressive. I just have two long-term rentals and one short term out of state. My wife and I started as complete rookies just trying to move to a better neighborhood for the kids. Three years after that we started our planning towards FIRE. At the time, we were about 25K in the red, living from paycheck to paycheck. 

I remember listening to J. Money talking about networth and I would just laugh about how my networth was deep in the negative. It really seemed unreal the idea of making it into the one million dollar net worth group. Now a few years later, I am bewildered by the financial progress we have reached. Networth has passed the half-a- million threshold and a million dollar net worth is not a matter of “if” anymore but when. 

As we all know the stock market has taken quite a hit this year, otherwise I would be closer to the 600K! We’ll see where the year ends, but so far things are looking awesome.

I will be getting more specific about numbers in my next post. If you have any questions please feel free to ask in the comments. I am always willing to help if you have any questions. I am pretty open about what has worked for me. I don’t believe in getting rich quick. I don’t like high risk or high leverage investing. 

No gambling. And nope! I don’t do crypto. If you do, more power to you. 

I would love to hear ideas from any money obsessed nerd like me. 

Personal Financial Forecast

This is something that I recommend to everybody trying to do better financially regardless of where you are at in your financial journey.

Every year I make sure that I take the time to set up financial goals; realistic ones! Based on what I know, meaning my incipient financial literacy, and what I have experienced in terms of my investments’ performance I start each year setting some new expectations for the new year.

Last year, just like the previous years, I surpassed my goals, which is totally fine and it actually boosted my confidence. With that said, I still keep myself grounded and continue to base my expectations on my real numbers.

Last year was truly exceptional with a 67% net worth increase. Part of that increase was a 50K legal settlement, but even without that windfall the increase would have been 48%, which is still amazing. Especially for a household of 2 adults and 4 kids living on one teacher’s income.

For this year this is how I see things going down…

My paper-pen planner is all I need to figure out the year.

First, I start with a very broad and general appreciation of 3% of the total amount of our real estate assets, including the home we live in. That’s the first big number at $39,300.

Next is our tax return that usually comes at around 10K. I get a lot of deductions because of the 4 kids, and all the morgage interest we pay. I am starting to think about changing my witholdings so that I can invest the money right away instead of loaning it to Uncle Sam for free.

Then, there is the break-down of the rental income. We have two rental properties, and we just bought a vacation rental in Michigan. We are in the process of figuring out how much we could rent it for. It seems like, according to market prices, we could rent it somewhere between $1,800 to $2,300 per week. So, I calculculated the rental income of this properrty at $1,850. We get about 10 weeeks out of the whole summer season and we are planning on using it for 2 weeks. 8 weeks will pay for the mortgage, and even at the lowest rate we should be left with about $900; maybe for unexpected expenses.

Finally from my teacher salary I manage to save $716, which was originally our student loan payment and after paying it off we repurposed the payment into our savings pot/bank. That amounts to $8,592 yearly.

Investments: I haven’t really put much effort into my 403B plan(Same as a 401K) because we have focused more in real estate investing. Why? Because I like the idea of building more cash flow and the leverage you get with real estate investing. My current balance is $74,441 in FSKAX(Fidelity Total Market), VTASX( Vanguard Total Market), FXAIX ( Fidelity SP500), and very little FXNAX(Fidelity Index Bonds). However, I think I am getting to my limit of how much property managing I want to do. From now on, I will use the cash-flow from our rentals to fuel my 403B plan. Once I hit 100K, I will move on to build up a 457 fund, in case I retire early, quit my job and want to access some of the money earlier than 59 1/2.

All this income comes to a total of $84,911, or 20%. This is how much I am hoping to increase my net worth in 2022. I will be more than thrilled if I shattered my goal/prediction like I have done in the last 3 years. We’ll see!

I just realize I have a disparity between my Mint and Personal Capital net worth. Mint shows $412K and Personal Capital $437K. I am not that concern about it. Mint lately has given me a lot of issues synching with Zillow, so I may consider going by my Personal Capital net worth of 437K instead.

If you read this, I hope this gets you excited about the power of getting a hold of your finances. The hardest thing is getting to the point of starting, committing and wanting to do it. Once you start everything falls into place.

If you have any question or I can be of any help I will be more than happy to share ideas with you for free. Just drop a comment below.

Best Kentucky Horses GIFs | Gfycat

Net Worth December 2021

I like to capture some of the news-making headlines as I reach new milestones.

Here we are again at the end of another wonderful year. I have been away for almost 6 months craving to have the time to sit down and go through all the events unfolding in my life.

My last post was in June and little did I know what I was in for. 

June is usually a very glorious moment for me because it means one thing: SUMMER! That is one of the benefits of being a teacher, you work hard through the year and then you get almost three months of beautiful weather and plenty of free time.

For me, free time usually means catching up with projects that need to be done with our rentals, driving our kids to summer camp, and our favorite thing of the year, which is going up north to Michigan.

Everything was happening as it should until I got the first phone call from one of my tenants letting me know that she was planning on moving. After two years, they decided it was time for a new beginning in a new state; a new chapter. Sometimes I wish I could do that, don’t you? Just pack up and go. However, with how crazy the rent prices have skyrocketed I figured this would give me an opportunity to raise my rent. This meant a lot of work ahead of me, nonetheless.

Then, just a few days before starting school, in the middle of my Michigan trip, I get a call from my other tenant trying to break the lease with barely 5 months renting from me. I couldn’t make this up. To make matters worse I have just gotten a flat and my spare was low as well. It turned out to be half a day of dealing with a car problem plus the tenant breaking the lease looming in my head. 

I am not going to lie the idea of having two vacant properties at the same time was freaking me out. There is usually a lot of extra fixing and spending when a landlord switches tenants. I do have a nice emergency fund cushion for this kind of situation, but still; it makes me nervous. We have only one income, and I know that a tenant who feels shackled by a lease can cause a lot of property damage.

For a few weeks, I thought the tenant had put off the idea of moving but then it resurfaced and things got heated. I like to avoid litigations, lawyers’ fees, and long-drawn issues, so I agreed to a conversation and let them do the talk.

Negotiating with tenants and people, in general, is not an easy task. Everybody wants to win. I find that particularly males like to feel that they are getting their way and forcing the other party to simply accept their terms, even if those terms are quite unreasonable.

This is not my first time negotiating terms with tenants and by no means do I claim to be an expert. My starting point is always listening to what they want. What is it that will make them happy, and yes, feel like they are getting their way? In this case, the starting point is that they had a legal obligation and a binding document with me as the landlord. By law, unless I am able to find another tenant without lowering my screening standard, they are obligated to continue paying rent. Once that I explained this to them, without getting pissed off, they agreed to pay three more months of rent and get their security deposit back. I never understood what was their negotiating strategy but, as I said before, I always let them do the talk. I rejected the offer by saying three months is too much. Let’s do a month, and I will keep the deposit. They didn’t quite like that idea but in the end, they agreed. We set up a time for them to vacate the property, and I reviewed my expectations as far as the condition of the property goes when they were ready to move out.

Moving forward a month, they left and I was able to find another tenant. The property was in great shape. I was not able to rent it for a higher price, but I was able to rent for the same price I had before to a family that is covering the expense of the yard, which was about 7 months of $30 a week. So, in essence, I am getting a little extra a month and I was able to get out of a sticky situation without paying a lawyer, going to court, etc and I am getting more cash flow.

That property was not much work or money, except for a garage motor replacement that needed to be replaced probably since we moved in that house 6 years ago. Other than that, I touched up the walls for about 15 minutes, replaced a blind and it was done.

Our other rental was a different story though. It had a lot of different colors and we had not painted anything since we lived there. We had the pink girl room, the green and blue boy room, and other crazy colors that at the moment we thought were very modern and trendy but now we were just wondering what were we thinking? Anyway, painting a whole house was not easy, even on a teacher’s schedule. I put in 6 to 8 hours of work after my regular school day hours. It was exhausting! But I knew it was temporary, and I knew I could rent for an extra $300 a month. I was super pumped and motivated every day to work hard and get to the finish line.

November came, and both properties were rented with new tenants in and life was good again, plus we had a super exciting event unfolding very much at the same time…

Another home

Finally, after years of visualizing this moment and camping in the area, it happened. We found a home in our favorite Michigan spot! Since about March we had been exploring the idea of putting an offer in anything we could get our hands on in this area of Michigan. We didn’t want anything fancy, but comfortable enough for our family of six, and more importantly close to all the places we like to visit in this area, including beaches.

We put offers on 6 different houses and we were outbid in all of them. The most traumatic loss was a house that went to the market with a tag price of 250K and sold for 360K to someone who paid cash. At that moment, I was completely defeated. And if you have ever bid on a house and lost you know that feeling of having your dreams crushed…it’s hard! It’s hard not to get emotionally attached especially when it is a place that you plan to enjoy with your family or that may improve your quality of life. Anyway, after that blow, I gave up on the idea and told my wife that maybe we would have to wait a couple of years before we have a real chance to get something. I didn’t like the idea of keeping too much cash in the bank but I didn’t want to get another rental in my area. Then another house appeared on Zillow. We talked to our realtor and decided to go through the process one more time. We lost again. However, this time we were asked if we wanted to be a backup offer. We said “why not,” but with absolutely no hope of this really happening. 

Almost a month later we got a call from our realtor asking us if we were still interested in this last property because the buyer was considering our offer. The financing of the winning bid didn’t work out and we were up! We could not believe it! We were about 10K away from the original winning bid in a super hot market and we were getting this house. Incredible. Actually, after our inspection, we got an extra 5K credit for a small repair that I will be completing next week.

What’s next? 

Well, the portfolio now includes two rentals, our primary residency, and now our slice of paradise in Michigan. Which we will be enjoying for part of the year and also renting for about 8 weeks of the summer season. Rentals in this area are extremely sought after and you will be hard-pressed to find anything for under 2K a week after March.

Other advantages of this property are incredible low taxes, there is no water bill because we are on a well and in general gas and electricity don’t seem to be much either. We are looking at this property as a savings account. Every time we pay the mortgage bill it is a pleasure to see a huge chunk of the payment going towards the principal, instead of real estate taxes and mortgage interests; which by the way we got a 3% loan on that house. Simply incredible!

Net Worth 

My prediction last year around this same time was to increase our net worth by 30%. We closed our year 2020 with a net worth of $260,583 and I was blown away. We surpassed our goal.

I predicted back then a 79-82K gain by the end of 2021 if I could replicate anything close to that 36% we achieved in 2020. I would have been more than content with a 79-82K gain. That would have been amazing!

But the results are in and they are definitely deserving of a drum roll….again I am blown away.

Pin on GIF
That’s how excited and motivated I feel about 2022!

Well, we have reached $437,273 in net worth. That is a 67% increase. Out of that, we had a windfall of about 50K due to a settlement we received after our car accident and the injuries sustained by my wife. Discounting that amount our net worth would still have increased 48% which is amazing!!

We are very very pleased and grateful. I can’t believe how our net worth has grown so much!

Years back I heard J. Money talking in a podcast with Paula Pant about the importance of focusing on net worth. At the time, about 6 years ago, my net worth was in the red with a big student loan and not much in home equity either. I thought to myself, “man these tech guys in the FIRE movement make it look so easy.” He was just crossing the million-dollar mark at that point if I recall correctly. Man, was he right?! Once you start looking at your net worth and create opportunities for your money to grow the magic of compound happens in a very generous way.

I simply can’t believe it, and I have no words to express how amazed I am with this progress. No doubt in my mind that we will cross that million dollar line and beyond in a not too far future.

It is beyond my wildest dreams to see my family and me in this position. 

My goal for next year 

I will set up again a goal of a 30% increase in our net worth or about 131K. 

I hope to achieve this by increasing my contribution to my 403B and potentially opening a 457 option through my job. I will continue with my two rental properties and the added income from the vacation rental in Michigan. I don’t anticipate the rental market prices coming down at all, although I do think that home prices will stabilize a bit in 2022, which may decrease our equity gains.

If you made it this far reading this post, thank you for hanging out on my site. I don’t know who you are but I hope you find this post empowering and pushes you to start your own journey of financial independence. There is no better day than today. 

Please, if you have any recommendation or suggestion that has made a difference in your financial life drop me a comment below.

I wish you a wonderful holiday season and a great 2022 full of great financial success!

Mid Year Net Worth update

News of June 20, 2021
Relevant news according to Flipboard- I like to use this images because they will become a reference in later years when I look back into my FI journey.

It has been a whirlwind of doing and doing after our move. I estimated that by April the dust would have settled and we would be up and running in our new home. Well…almost there. The big hurdle was moving the pool and having someone to install it I wish I would have trusted myself doing the whole job because the company that did it, did a very crappy job with the leveling. I know that in a not very distant future i will find myself fixing it. I won’t be able to live with a pool where the water is off level for more than 2 inches. I am not an anal person( That sounds weird!) but these kind of things do perturb me. I am very mechanically inclined person and anything off like that makes me pretty much have nightmares about the consequences of something not being properly installed. Okay, sorry! I am going off topic here.
We have had few splurges since we moved to make our home comfortable, and enjoy it. Some of these expenses are a retractable automatic awning that covers the deck, some light fixtures, and the pool installation that comes with many expenses attached to it, like the electrical installation of an outdoor outlet and bonding of the pool to meet code requirements.
We could certainly have refrained ourselves from reinstalling the pool in our new place but with kids we simply love having the pool right in the back. We go nowhere. We pay for no pool passes for 6 people, we don’t have to deal with people’s craziness, drive, get ready, etc…and not to mention that having a pool when a world pandemic hits it’s the most amazing thing ever; I know those events never happen but just in case.

The retractable awning we got installed is such an amazing thing that I feel compelled to include it in this net worth update. Even when it was a big expense, we didn’t hesitate getting it after experiencing it at our old house. When we first moved to our previous home we thought that these awnings were outdated and simply an old people’s thing. We were bound to take it down and pretty much give it away. Well, then the summer hit, and we started using it. It was a life changing event. Very quickly we realized that while all of our neighbors were hiding inside from the heat and sun we were pretty much living outside all day long. Our house was cooler too because the awning would prevent the sun from reaching into great part of our first floor. When we moved, we considered taking it down and bringing it with us but then decided against it; we didn’t want to complicate our move even more. I had enough going on with the relocation of the pool. So, we decided to get a brand new SunSetter for our new place. It’s about 16 feet long and covers almost the whole deck. I can’t tell you what a great product this is! I am not getting paid to write this. If you like to enjoy your patio or deck, Sunsetter is simply the most amazing product you can have. Umbrellas are a pain in the neck!

That’s my summer hangout. We even got a wind sensor that will make the awning pull in if there any strong gusts of wind. We love it!

Another big commitment although it did not require any upfront payment and should provide at least a 30% savings as we go on is our solar system. We decided to join the many families that are going solar and got our system installed by SunRun. We signed up for their lease option which requires no money down and provides some savings to the home owner, besides the benefit to the environment of not using fossil fuels( Or not as much). Through this program, SunRun owns the system and takes care of its maintenance and insurance while we reap some savings. Now, our electric bill will be paid mainly to SunRun and maybe a few bucks to the local electric company, since we are still hooked into their grid and their meter. Our bill was around $150 a month, and I am expecting now for that number to fall somewhere around $100. I am sure I’ll write about it once the system is turned on- We are waiting for the electric company to replace their meter.

Another big event in our lives was that finally we received part of our settlement for our car accident in 2020. The lawyers did a fantastic job and that is coming from someone who was extremely skeptical about getting a lawyer to litigate the case. These people went beyond my wildest expectations as far as compensation goes and I am confident that without them we would have walked out with nothing or in debt with hospitals and doctors. Thanks to them we were able to receive 50K in compensations against a 100K coverage, despite the 88K we owed for surgery and hospitalization, plus about 6 months of physical therapy. No money in the world is worth going through what we went through but we are grateful for the compensation this firm achieved for us.


Well, without any further adieu, the numbers!!!

Net worth after 4 years
I have surpassed my 2021 financial goal!!!

For someone who is a high income earner this may be nothing. In the FIRE community there are tons of people who achieve FIRE fairly quick or who are able to reach great saving percentages of their salaries(50-60%). I am happy for them, but that’s not my case. I have a teacher salary, my wife stays home with the kids and we have 4!
So, for me, this is freaking unreal. Sometimes, I have to get a pencil and paper to do the math myself and confirm this is real. Five years back we had nothing but debt, even after becoming accidental landlords and when we had no idea about the FIRE movement we were living from paycheck to paycheck. We were afraid of loosing our tenant because we didn’t have enough in the bank to flip the property for a new tenant. It was stressful.
Today, per Zillow, we have $1,009, 098 in real estate assets, more than 100K in cash and almost 70K in tax sheltered accounts. I still have to work, and I am not retired but I get plenty of time to spend with my family and explore my own interests. I am relying more and more on others to do maintenance jobs for our rentals and life is simply great. I could not ask for a better life. Every day I wake up and I ask myself “is this real?”
This milestone is more than I ever imagined. I still remember myself counting all the money I had- $800 dollars- and packing up my suitcase before leaving my beloved Venezuela.

What’s Next?

We continue doing what we have been doing, which is to stick to the budget, increase the gap between our income and expenses, and keep investing. I recently increased my contribution to my 403B plan adding extra $100 per paycheck. I could max out this year but I want one more puzzle piece in our real estate endeavors.
We are looking into buying a vacation/short term rental property in Michigan but unfortunately we have been outbid twice by cash offers. The market is out of control even in rural communities. We want tiny slice of Pure Michigan near Traverse City. We love this area and we think that it may be our retirement spot. We have been camping and visiting the same spot for over ten years but we have never been in a position of buying a home there. We are currently bidding on a property but we won’t know until Wednesday (06-23). Wish us luck!
We will be camping in the area next Friday too. We super excited about it. Plus we will be able to check out some other hidden places we have not seen yet.

Anyway, that is what’s popping in my neck of the woods. I would love to hear how is this middle of the year for you and your FIRE journey status.

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