Welcome to my first monthly report. This is the first month in my journey from massive debt to real estate mogul. I’m excited, nervous, apprehensive, depressed, and crazy all wrapped into one. And that’s just how I feel about my debt. Sharing this monthly report is another story altogether.
I’m trying to find a format for these reports and I welcome any feedback. For now, I’m going to summarize my efforts for the month. I’ll explain the actions I took in regard to finances (eg. debt pay down) and real estate, and use some metrics to explain the results.
For this first month, there aren’t any trends to see, but they will build up over time. For now I will share the current state of things.
Without further ado…here is the October 2015 report.
I finally ripped off the blinders and faced my massive debt head on. There was a lot of cursing and booze involved to start (the “what have we done” phase), but that gave way to action. I took over the family finances, or at least the credit cards, and set about tackling the debt.
Here are the financial action steps I have taken in October:
• Defined massive debt. Took a deep breath (and a couple shots of booze) and faced the debt head on.
• Created a monthly household budget. It wasn’t pretty, but it was a necessary first step. Learned we are actually cash flow positive every month.
• Took massive action. I paid off TWO credit card balances by making a tough decision. What a great feeling!
The important thing was to get started, to take some positive steps towards paying down debt. Now the trick will be to keep the action going in the next month.
Goals for Next Month – Massive Debt
Here are a few steps that I’m hoping to take in November, to keep the positive momentum going for paying down debt:
1. Evaluate debt consolidation loans. There may be opportunity to save myself from all the credit card interest payments.
2. Research 0% interest rate deals for credit cards. If my credit isn’t complete mud, I might be able to transfer some credit card debt to new cards for a temporary deal.
3. Determine debt payment plan. I need to know how much I can put towards debt each month.
4. Do budget analysis, look for places to cut expenses. We can always be more frugal and the numbers don’t lie.
In this section I will share the financial metrics that I am currently tracking. I will also share the current massive debt situation. I will do my best to share my Excel spreadsheets and graphs as we move forward (still figuring that out).
This is the post where I described financial metrics and what I will begin tracking:
• Defined financial metrics. I chose the metrics needed to track my financial health. Now I have to focus on improving the numbers.
Here is a breakdown of my household budget for October:
Here is a list of the financial metrics I am tracking, showing the starting point on this journey, the ground floor if you will:
• Total debt = $97,641
• Credit card debt = $80,041
• Capacity = $33,564
• Credit used = 70.8%
• Liquidity = 0.8 months
• Debt-to-Income = 42.7%
• Net Worth = -$291,906
• FICO = 720*
*The FICO score is only from our Discover card, it’s not a total score.
I have begun making strides towards real estate moguldom (probably not a word, but sounded good in my head) this month. I began with education. When I am uneducated and passionate about a topic, I throw myself at it with obsession. That’s what October was all about for me, obsessive learning.
On the education side, I began with podcasts. I can listen on my commute to work or while doing house work. That led me to various websites. I would like to call out the best I have found, a site called Bigger Pockets. They have a great podcast, great wealth of knowledge with articles, and very active forums. They also encourage networking through the site, making it easy to link up with others.
Based on my education sessions, I have come up with real estate goals, both short-term and long-term:
1. Network with one new real estate investor per week in person, on average. This will get me out of my comfort zone, off the couch, and into the game.
2. Start my real estate wholesale business and get one deal within 6-9 months, and two deals within 12 months. I have heard deals come sooner on average, but I’m taking a realistic approach, especially since I am starting this as a side gig.
3. Own 5-10 rental income properties in 5 years, single-family or multifamily. This is where the long game comes into play and I can see steady cash flow happening.
I went to one network meeting in October and met a real estate investor. I wasn’t expecting to meet real estate folks at this meeting (it’s geared towards jobs, not real estate), so it was unexpected but welcome. We made plans to meet up in the coming weeks.
On the business side, I am planning to start with Wholesaling. That is a process where I find motivated sellers and link them up with real estate buyers. My education is telling me that I will need a budget for marketing efforts. Time to start saving for business investment. That will be a tough balance, paying off debt and investing in a side business. Let’s see how I do.
October 2015 was the start of a long journey. I took control of my massive debt by ripping off my blinders. I also decided on starting a side gig business in real estate as a way to earn more income. The journey has begun.
I was able to quickly get my head around the massive debt situation and take some action. I actually paid off two credit cards (TWO!) and it feels great. I have some momentum going and I need to keep the pedal to the metal.
Give me some feedback in the comments section below. Let me know what you think of my journey.