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Net Worth December 2021

Sticky post
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.

MONEY!!!

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.

2021 First Quarter Update

current news for march 2021
Things happening today according to Flipboard

Now that the dust has settled and our move has happened successfully I finally find the time to write an update on our progress.

I will try to make this short and sweet. We ended the infamous 2020 with a net worth of 274K. The prediction for 2021 is about a 71K increase. 

Personal capital 2020

Most of my net worth comes from real estate equity. After our move, we pushed our RE assets to 950K.

The housing market continues to show signs of strength and this spring should trigger some healthy increases as far as rent and house prices go.

Thanks to Mint I am able to track my net worth on a daily basis. This helps a lot! Especially when you are having a miserable day at work and feel like you have lost your purpose, which as a teacher we have had plenty of those moments this school year. If you are not using Mint and Personal Capital you are truly missing out. I highly recommend it. It does all the heavy lifting for you and it helps you make informed decisions about your finances. Both Apps are part of my financial GPS.

As it is today we are standing on a net worth of $308,890. That is an increase of $34,890 since January 1, 2021, which equals a 12% growth. That is already 49% of my 2021 goal. I thought I had surpassed the middle point of that goal due to a discrepancy I have in my notes and the data I am pulling from Mint and Personal Capital, but regardless, this is freaking awesome! I can’t even imagine what it will be when the best of the real estate season kicks in this spring and summer. And granted, my take-home pay is around 68K. So, money is definitely working for us.

That is in a nutshell where I am at.

If you want to know more about our move and details of how we made it happen, read on!

Buying a New Home

After going through almost a year of a pandemic-caused financial recession and observing an increased demand in the housing market for larger spaces we became part of the statistics. Being in a 3 bedroom house with no basement and 4 kids really pushed us toward our decision. I guess that if we had 2 boys and two girls that would’ve made things a bit easier, but having 3 girls and one boy complicated it all. Plus the added caveat that we have the potential complication of my mother staying again with us for a long period of time. We needed some extra space.

We were also at the point of finding another investment property. The options were buying another rental or buying a bigger home for us and turning our then current home into a rental. We chose the latter.

How did it happen?

We had about 40K in cash for a down payment but that would’ve wiped out our savings.

Thanks to a lender that I always work with he suggested we refinanced one of our rentals, pulling some cash out and with the historic low mortgage interest rates our payments would not change that much.

Our balance in that house was 117K, with a mortgage payment of $1,218. After pulling out a bit over 40K our balance became 165K and a monthly payment of $1,283. Those numbers include insurance and taxes.

In short, we bought a house and I didn’t spend any extra money. Well, we did, but if feels like I just moved money from one house to another and got to keep all my precious cash. Yes, my standing balance went up but the way I look at it is “ I don’t pay for it. My tenants do.” I appreciate that and I tried very hard to keep them happy by providing a living space well kept.

 We have had a lot of expenses in the new place. We were given credit for some of them and some other we are just paying for it. 

Some of the expenses were: 

Windows: We got credit for 9 windows(7K), but we paid for the rest 6.(4K).

Radon mitigation. We got credit for it (1.4K)

Some DIY canned lights for our living room: Under $200.

We splurged on a Sunsetter for the deck- that was a whopping 5k. Our old house had it when we bought it. We didn’t like the look at first but we loved its functionality. These awnings turn your patio or deck is an extension of your living space. It was a big expense but during the summer we really spend our days sitting outside while our neighbors have to go inside and hide from the sun. An umbrella for 6 people just doesn’t cut it. Plus, now the fabric designs are much nicer than what we had.
I am even considering replacing the fabric in the old house. I want my tenants to enjoy their summer, plus I like to keep my rentals close to selling conditions.

Then, last but not least, we have the big expense of moving our above ground pool. I took it apart myself. We’ll have to replace the liner and pay for the new install which comes to $1,046, plus permit $120, plus the electrical $300, plus $1000 to refill and fix the crater we left behind at the other house. That last expense should be tax-deductible since that house is now a rental.

We also decided to get a beautiful reclining couch for $3K. Not very frugal decision but our old couches had taken the beating of 4 kids for 13 years and they were literally ripped and losing their inners. We could never sit all together because they were not big enough. Now we have an awesome family lounging area where we gather, chat, watch movies, enjoy each other and that has tremendous value for us.

I know. Not very frugal, and it is a lot of money but we don’t pay for pool memberships or go anywhere in the summer other than our yard and forest preserves around. We usually take one trip to Michigan in the summer, and one to Wisconsin to drop our older girls at camp and the rest is a daily yardcation all summer long. We truly enjoy our house.

So…the tab please! After all these are put together we have spent about $13,666, plus the couch that we’ll pay in 3 years with zero interest.

Part of the reason behind these scandalous purchases has been the stimulus money we have been receiving. We really didn’t need it, more is coming and I just want to enjoy my house and my family. It seems like I always make everything nice for my tenants. I fix our house and instead of staying and enjoying it we just move. So now, we are good to go. 

Today is the first day we will enjoy 70 degrees around Chicago and I just can’t wait to enjoy our awesome house this summer. After all, FIRE has no purpose if you can’t enjoy the journey to it. Right?

How about you? Any big financial movement this 2021? Any splurge? I would love to hear about any of your new plans or goals for ‘21 down below.

Final Net worth update 2020

January 1st, 2021

It’s hard to believe that the year we never imagined coming to an end has indeed ended… and at the same time, we look back and it’s unreal to see ourselves in hindsight going through all the things we went through; politically, socially, financially, health wise, as parents…this year really had it all and it has tested us in many ways.

I f you are reading these lines I hope you and your family made it through 2020 OK. Or at least I hope the worst is in your rear mirror. I wish you the best in this new yearly cycle. I don’t know about you but I sometimes feel even guilty for being in a position of somewhat comfort, whereas many other people are out of jobs or impacted directly by the pandemic.
With that said, I think that the end of a year is always a great moment for reflection; for looking into our past year’s goals and make plans for the year ahead.

So here we go…

Just like for everybody else, health wise this year sucked.
Financially though, this year was luckily fantastic for us.
Given the nature of my teaching job and my several years in it, my family and I were shielded from losing my job and I am extremely grateful for that.
We started 2020 with a net worth of $189,000, mainly in home equity between our primary residency and our rental property. Plus a little bit on my 403B plan which did also pretty good.

Personal capital 2020

If I didn’t have Personal Capital I would have said, “meh, my year was just ok.” But when I look into my Personal Capital account I realize that what I did financially this year was simply amazing! My growth was $85,000!!! That is pretty close to my year’s salary (101K)!!! With a family of six? That is extraordinary I think!! That is a growth rate of 44% !!! Even discounting the almost 10K we received from the government due to Covid relief that would put us at a growth rate of 39%, which is still extraordinary.
Why am I so excited about this? Well, first of all, I never thought it was possible to grow your net worth like that.
Second, it is almost double the growth I had in 2018-2019, which was about 23% from what I can gather through Personal Capital; although I must confess I didn’t set it up correctly at first. So, the information I have is accurate only from April 2018 on. In other words from April 2018 until December 2019 the growth was 23%.
But even If I was able to replicate this kind of growth in the neighborhood of 30% the results in just 4 years will be amazing!

Interest Compound Calculator from Moneychimphttp://www.moneychimp.com/calculator/compound_interest_calculator.htm

Not to mention that I am still 8.6 years away from my early retirement age of 55. Even if I could hover around a 20-30% growth rate for 8 years the results would be more than enough for me.

Goals for 2021

As the year starts, we are all packed up and ready to move. If you have read some of my previous posts of this year you know that we have been contemplating the idea of moving. Despite the fact that we absolutely love this home we live in, a family of six people plus a grandma that comes to stay for long periods of time, puts a lot of stress on the family dynamics. This situation has pushed us towards a need for more space.
Likewise, we have been contemplating buying another rental property that can provide a decent cashflow like the one we currently have.
When we put all this together and the environment of historically low interest rates, we came up with the idea of simply moving to solve our space issue, at the same time that we would get to invest in another rental.
By converting our current home in a rental property we are diversifying our portfolio. We currently own what I would call a B- property, and now we would add a Class A rental to the portfolio but modest enough that is still at an entry level in the neighborhood.
If everything works out as planned my expectations are a 71K net worth increase or 25% growth rate.

So, there it is! One more year and I will be revisiting this post as I write to my future self today trying to hold myself accountable for these goals.

If you haven’t set up financial goals for yourself I hope this encourages you to do so. It has really been life changing for me and my family. This has helped me to take control of my finances.
If you have any suggestion, comment or simply want to drop a line below, please do! I would love to hear from you and your FIRE journey.

For now off to a new 2021!

October 2020 Net worth update

This is a short post and update on the Net worth. My last net worth update was in August 2019, when I was around $185,000.

Today we are about 36% above that previous number.

We have had few hiccups due to our car accident. This spiraled down into a train of expenses that we did not expect but thanks to our financial discipline we have saved up an emergency fund that has been a life saver.
We were in need of a different car after the accident, we got it. We did get a small loan because, why not? I may pay it off after we settle the car accident with the insurance, but in the meantime I prefer stashing the cash.
I also had the opportunity of getting another car for an awesome price and then selling my current vehicle; that was another expense that I’m expecting to make back when I sell my current vehicle. I may even make a decent profit.
The rest is the same as usual. We got a budget. We have automated everything so that every time I get my paycheck, money gets withdrawn and deposited right into our savings account.
Looking into your net worth is a great exercise. I love Personal Capital and how easy it is to analyze where you are.
Just few years back I had nothing, but a credit card with 9K in the red. I felt like I was drowning. I felt like there was not progress regardless of how much I worked.
Today I feel excited about my finances and my future retirement. I feel that I am in charge of my money and I feel how little by little that money is freeing my mind from the daily oppression of having to work to cover my basics.

We are considering plunging into buying another property. We are debating if we should go for another rental near us, or a vacation home with potential to rent on a weekly basis through Airbnb.

I am wondering if we can keep that 36% growth rate for the next five years.
Please feel free to share any ideas and opinions you think may help this family of six(Plus one) on their FIRE journey. I am thankful for being able to share this adventure with you.

Surviving the Summer Pandemic 2020

Pandemic Coronavirus Composite
As we crossed the line of over 1 million deaths worldwide we got our share of health issues.

One makes plans, life simply laughs at us.

unknown.

I wanted to start my post today with this quote because more than ever quote speaks volumes to me. We all read and discuss how important setting goals, being determined, frugal, and resilient is. We make plans and along with that, we create expectations of success and certainly we hope to reach our goals within the time frame we have estimated.
Unfortunately, more often than not, things do not exactly go as we planned. Life likes throwing curve balls at you. You plan to go from A to B, but somehow the whole alphabet happens in between those two and you may end up in a totally different place from what you planned; sometimes for good, sometimes for worse, or sometimes you may find yourself right back at where you started but with different priorities. Life is just simply full of unexpected surprises and unknowns.

This can lead to frustration and disappointment, making you give up your goals or even your desire to plan anything. “What for?” You may ask, if anything ends up going sideways. Unless, of course, you understand that these frustrations and disappointments are just part of the journey. Rarely a journey is one straight path.

Needless to say, the FIRE journey is not an easy one. It is simple. Yes. In the sense of what you need to do it is very simple. Maximize your earnings, maximize your savings, invest and widen the gap between earnings and spending. Likewise though, there are many parts of your life interconnected that must synch and align for everything to work out and fall into place. From your own physical and mental health, to your own variety of responsibilities with your family. It can be very complex.

I have been dying to sit down and write more since my last post called “Pandemic Proof Finances.” When I thought I had everything all aligned, even during this Corona virus time and I was perfectly on track to reach my goals this year.

Everything was secure. My teaching job gave me nothing to worry about as I saw thousands of people losing their jobs and feeding the unemployment rates. My rental was doing fantastic and I had nothing to worry about because my tenant is a subsidized housing program participant; which means that I get paid mainly by the government not the tenant.

The only thing I had to worry about was making it through these crazy times of uncertainty as we face a potential fatal virus of still unknown consequences.

Like everybody else we went through the pain of wiping our groceries, paying extra for food, hoarding a few things trying to create a small inventory of food to feed our family of six, plus one more person (An extra family member who got stuck with us due to the pandemic) in the given case the food distribution chain broke down.

Jewel grocery deliver
This is a privilege not available to all people around the world. We don’t take it for granted.

Of course, we also faced the “gruesome” fear of getting to our last roll of toilet paper!!!

Somehow though, things worked themselves out. Financially we made it. Safety wise, we kept to ourselves, we practiced social distancing rigorously, as we saw the images in New York of refrigerated trucks outside of hospitals storing deceased Covid-19 victims. We also saw the horrible images of a world that is still ravaged by inequalities. Countries where the most basic access to medicine is a privilege that only a small percentage of the population can enjoy. 

To add more stress to our pandemic situation, we added a new member to our family. My mother, who had come to visit for just a few weeks, got stuck with us since the time when the world shut down. This added a lot of stress to our marriage, our family dynamic, and of course it gnawed on our budget and finances one day at a time. This could be a whole post in itself, but I will summarize it as this: I have one heck of an amazing wife- It has not been easy!

More of 2020

We made it to August, enjoying our small pool, which became the focus of our summer entertainment. Usually in August we go on a family camping trip. This year though we were leaning on the idea of just calling it off. However, by August we noticed a lot of people taking small trips and enjoying themselves. The kids were devastated with the idea of not going on our yearly adventure. So on a whim, we decided to go for just a few days. As long as we followed the same safety guidelines recommended by CDC, such as washing hands, social distancing, etc, we should be OK, we thought.  Usually we go for 10-15 days, we decided to go for only 5 days.

We got everything ready. New front tires for the car, small muffler repair to our old trusty minivan, bought our provisions, etc. We were ready!

 Before we knew it the days flew by and we were all waking up early, getting in the car, all bags in, even the dog was excited for the big adventure. Coffees set in the car’s cup holders. Camper hooked, all the lights on, cruising the last minutes of the night as the sun was trying to come up. Little did we know that our trip was not going to go far at all. 

About 10 minutes away, maybe one mile from reaching the highway, we settled in our seats, ready to enjoy the ride, maybe take the first sip of home-brewed coffee with Gregory Alan Isakov at dawn as the soundtrack of our 2020 summer vacation. 

Out of nowhere, and in a matter of a split of a second a car traveling in the opposite direction rear ended another car that was waiting for us to pass, so it could turn left. The rear-ended car got driven right into us.
That is really the aftermath explanation after we were able reconstruct what happened. In the moment it simply felt like a drone attack; out nowhere we were impacted, and it was hard.
Our driver’s side took the brunt of the impact. Our car got impacted all the way from the front to the back. The airbags got deployed. I managed to keep everything going relatively straight despite the impact and in a blink of a second we stopped. My wife asked me to call 911. She was hurt. I felt extremely tight on my back and neck, but I was conscious and facing probably the worst moment of my life; my kids!

Taking that first look to the back of the car wondering if they were OK was terrifying. I was fearing the worst. Were they hurt? Or even bleeding? Killed? Had I just lost one of my kids?

Luckily, they walked out of the car completely unscathed. Unreal! The rear window on the side of the impact also exploded. The sliding door was also damaged and caved in, but nothing touched our kids. Unfortunately, my wife suffered a triple femur fracture. We don’t know if it was caused by the impact, even when her side was not impacted directly, or if it was due to the impact of the airbag.

Airbag deployed
I hope to never see this again in my life.

She was rushed to a nearby hospital and had to have surgery that night to have an intramedullary nail; which I thought it was a pencil like kind of support but in reality it is more like a rebar, driven from the top of your hip all the way down towards the knee.

Intramedullary Nailing of Femoral Shaft
This is one of her last X-rays. everything is in the right position and moving towards full recovery.

Since the day of the accident until now it has been a whirlwind of doing, from taking care of her, the kids, phone calls, answering to our lawyer’s emails, making meals, going back and forth to the hospital, appointments, and my own physical therapy. I was supposed to get back to work few days later after our trip but I had to take two weeks to stay home  as she regained some mobility, and we sorted out the so many things going on in our lives.

Money

Did we get off completely off the FIRE tracks? Is everything lost?

Well, my first thought was this is the end. We are going to be buried with bills. Right away I was advised by a good friend of mine, who is a lawyer, to get legal representation. He didn’t have to say much more than “Insurance companies feast on people who are not represented legally.” 

That ended up being a pretty smooth process, although from the beginning I knew there were going to be some hard pills to swallow with all this.

When you get in a car accident there are two parts, maybe three, to deal with. The simple one is property damage. The cost of reparation or replacement for a vehicle. Who is at fault, etc.That is pretty straight forward. In our case I knew my car was worth nothing. I had bought that car for two thousand dollars 5 years ago, and although it was reliable I knew I would have been lucky if I got even one thousand back.

The other issue to deal with, is bodily injuries. This can be extremely difficult to deal with, because in reality sometimes all the money in the world can not repair an injury that will also have life long consequences. It is difficult to determine what the needs for therapy may be in the future, how much suffering a person will sustain in the coming years as a consequence of an accident. It is hard to put a price tag on a missing limb, brain injuries, the ability to walk, or even losing a family member. Likewise, it is extremely difficult to face the bottom line, which is the fact that your recovery or reparation paid to you and your family will be determined by the kind of coverage the person at fault has. If the amount of that coverage is not enough, you can then tap into your own insurance policy if you have underinsured motorist coverage. Which means exactly that; if you get in a car accident, as long as it is not your fault, and the damages can not be covered by the insurance of the other driver, your own insurance will kick in to cover those expenses and compensation.

The third aspect to deal with, is the one related to justice and the desire of seeing the law punishing reckless behavior such as speeding, cell phone usage and in other instances DUIs, etc. 

In our case, there was very likely some sort of distraction going on in the vehicle that caused the accident. The accident occurred on an ample two lane road on each side(4 lanes total), straight, very light morning traffic. For the kind of damage we suffered, and given the fact that we were impacted by a car that was not in motion, but pushed with such force into us that totaled our car, it leads me to believe that the car at fault was going easily over sixty miles per hour on a 45 zone. Was the person texting, talking on the phone or watching videos while driving or didn’t even brake? We will never know, because unless there is a fatality in a car accident the police does not check phones at the scene of the accident, and getting those phone records may cause another hefty expense ultimately diminishing your compensation or reparation. 

You hear all the time of people getting sued left and right for what seems to be petty things, but it is not as easy as you would think. Besides that, it may not be worth it at all if the person you are suing does not have the means to pay for damages or bodily injuries. For example, it would not be worth it to sue an individual who is 40 years old, living in an apartment building, earning a minimum wage, with no assets. What could you possibly get to compensate your damages even if your lawyer ends up garnishing wages? If a driver hits you or someone in your family, by a driver that only has a 50K coverage, it may look like a 35K payment(Standard fee for lawyer’s is a third of the compensation paid) is nothing but that may be the very best shot you got at getting some compensation for damages. With that said, if you sustain a severe injury that will impact your life forever, this compensation will indeed be a drop of water in an ocean of medical bills. On the other hand, suing the driver may get you nothing at all but frustrations.

Legal representation is also expensive. This is not a complaint. There are many costs involved in litigating a case and lawyers have to upfront these expenses hoping that they will be compensated when the case is resolved. The standard fee is one third of the insurance pay out or compensation goes to the lawyer’s office. If you are compensated with $100,000, the lawyer will keep roughly $33,000. 

They do not have to take your case either. They can decide if they want to represent you or not, which makes it for a good profitable business.

Besides losing 33% of a possible settlement from an insurance company, you may also have to pay back to your own health insurance company. The expenses of your treatment upfronted by your health insurance, such as surgery, ambulance transportation, therapies, etc, may have to be paid back. Once that you are compensated, if your health insurance company paid for your expenses in the first place they will very likely exercise what is called subrogation, which basically gives your health insurance company the right to be reimbursed for what they paid on your behalf.

It has been a very trying year. And this where we are at… deep sigh!!!
A wife who is recovering from a triple femur fracture. A summer vacation that got ruined after the first 10 minutes of the trip, E-learning unfolding, still at the mercy of a threatening world pandemic, a very unclear financial horizon, and possibly on the hook with some medical bills. Plus, last but not least a co-living situation with an extra family member who is still stuck with us. How many more months of 2020?

But there is always a silver lining to any situation, and I have learned that when you think you got it bad, for sure there is always someone in much more pain and suffering. I am thankful for having my family all together, and despite our accident situation we are getting our lives back day by day.

Lessons Learned During These Few Months

First of, I regret, and I think it was a terrible decision to simplify my auto insurance buying only liability. The underinsured motorist coverage is a must, at least for bodily injuries; for property damage depending on how old your vehicle is, it can be debatable.

 If you are in a car accident and you are not at fault, but the other party has, let’s say a 50K coverage, you may be in trouble to cover all your medical bills. Even if your own health insurance is terrific and covers most of the bodily injury, it is highly likely that you will not be compensated for the pain and suffering from a severe injury, such as a broken bone, losing a limb, a brachial plexus or brain injury where your current ability to even work will change forever. 50K will hardly cover medical expenses.
And let me share this nugget with you: There are companies out there selling products with only 50K coverage for bodily injury. So protect yourself and your family. Underinsured motorist coverage is a must.

Likewise, if you are on the other side of the equation and you are at fault with only a 100K coverage, and the other driver suffers a severe injury, your 100K coverage will not be enough if that person, for example, loses the ability to walk or any cognitive ability as a consequence. If you are working towards FIRE it is likely that your net worth will be above that amount and lure any lawyer to file a lawsuit against you on behalf of the victim. 

For all these reasons, I went from only having liability coverage to full coverage with underinsured motorist coverage plus an umbrella coverage up to 1 million dollars. Yes, it costs more but I sleep better. I would hate to lose everything I have managed to save in the given situation I get in a car accident and I am the one at fault.

Two Years of FIRE 

Maybe almost three…
I am still far far away from FIRE but my short journey proves to me every day that I am simply much better off today that I have ever been.

First of,I have saved enough to feel secure. I have no financial worries about covering any expense, mortgage, etc.

We are still undergoing a world crisis and potentially we will be facing a financial one in 2021. I have no worries. My job is secure, my rental is paid by the government; life is good.

We had a devastating event that a few years ago would have caused us a lot of financial unrest. Today, thanks to working towards financial independence we had no concerns whatsoever making it over this hurdle. I was able to purchase a new used car in no time and I felt empowered when negotiating for it. I felt like I could get anything I wanted and on my terms, or at least for what I considered a fair price.

I am estimating a small compensation from the insurance company representing who caused the accident and by no means I am happy about this. There is no money amount that could equate the suffering my wife has endured. But that’s life. Unfortunately we cant rewind time. Once we fully make it through all this craziness we will deploy again our plan of buying another rental; we are currently evaluating the option of and Airbnb as well.

I will be posting soon and update on the net worth. 

In the meantime, we are happy we are all together again. Our sails are filling up again and we continue on our journey.

Blackwell Forest Preserve
Lately we have been enjoying our small sailboat in local lakes.

Learning from other people’s experiences can be a great help. Feel free to share this with anybody that may benefit.

If you have any question, suggestion drop me a comment below.

Stay well.

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