The comments on last month’s update hit me hard, particularly this one about taking on a Sisyphean task.
They got me thinking about money and tools and this whole journey I’m on. And a lot of things snapped:
- I pulled $40,000 in contributions from my Roth IRA.
- Paid off one of those pesky credit cards (and all lingering credit card debt!)
- Bought a house from a tax sale
- Set up a future inheritance with an attorney
Deep breath
And can I just say how much LIGHTER I feel? How much that was needed?
And yeah, it burned to let some of those investment funds go. But as I was driving around one cold, sunny morning, I realized it was so worth it — and now I have so much to look forward to.
February 2025 Freedom update
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I also must give credit to this monthly exercise, because the thought of coming back here and giving the saaame report again was gnawing at me.
All that money sitting in a retirement account when I had so much that could be alleviated right now. It got me thinking about what I’m doing all this for.
And what’s the point of having so much money in 20 years if it means suffering now? I always say money is a tool, so why not use it to solve immediate issues?
From the Bass Pro Shop in downtown Memphis lol
Plus, there’s always more money. Even with all the shifting around, my net worth remained steady. However, I expect it will go up substantially this year, largely thanks to the money moves I made this month.
Tax sale property
I bought a 105-year-old house filled with junk in a transitional part of town for $16,000.
Carson House
Then, I found a loan officer and general contractor via a local investor group, who mentored me and pointed me in the right direction. I’ll get a $100,000 construction loan to turn this into a three bedroom, two bath house with a deck, carport, lots of plants, and new fence.
The final value should clock in around $150,000: Instant equity and appreciation, and a heck of a lot of learning.
Then, I’ll rent it out long-term and use the rent to repay the loan. Even with current interest rates, it should cash flow.
This is my first rehab, and I like to keep the numbers conservative. The rehab will take three to four months, and it’s given me a big project. I’m really excited about turning this place into high-quality housing later this year.
Gramma’s house
A few weeks ago, my Gramma hit me with news that landed like a ton of bricks. She’s 81, and her health is starting to decline. She is limited to a walker and has other health issues.
I found an attorney specializing in elder estate planning, and we put her house into a living trust. When she passes, I’ll get the house and will fix it up as another rental. Because of the trust, there will be no probate, and I’ll avoid a ton of capital gains taxes.
This sweet baby
I’m already sad about my grandmother and also relieved that her assets will pass easily. The house is fully paid, and, considered as an asset, will put me well over my $500,000 goal.
I’m currently at 72% of my goal. Between my grandmother’s house and the investment property, plus continuing to invest in my 401k, 2025 will probably be the year I meet my goal and enter into what I consider financial independence.
This was also another factor that made me feel better about purchasing the investment property. And with this taken care of, we can properly care for my grandmother’s assets and carry out her wishes in a way that respects her legacy. I’m happy the house is staying in the family, and I’m bullish on Memphis real estate.
This month’s progress
I also paid off a card whose 0% APR period recently expired, plus all other lingering credit card debt. The only thing I have now is one card with an ~$11,000 balance and a year to pay it off. I am SO PLEASED about this.
It was a big month full of changes
I likely will NOT max out my 2024 Roth IRA before April (never say never), considering I just cashed some of it out. It was all penalty-free because I only withdrew contributions. If I get any extra funds, I’ll pay off the credit card. Other than that, I can pick up 2025 Roth IRA funding later this year.
I’m also looking into tax liens to add other property investments to my portfolio. I’m still new to it, but doing my first auction this week. Can you tell I’m finally getting into real estate investing to further diversify my portfolio? All this talk about trade wars and tariffs made me skittish about having all my net worth tied up in stocks.
To recap, this month I:
- Contributed $1,000 to my 401k via bi-weekly contributions
- Cashed out $40,000 from my Roth IRA
- Paid $16,000 for an investment property
- Paid off all interest-bearing credit cards
- Paid an attorney for my grandmother’s estate plans, including a living trust for her house
- Got pre-approved for a $100,000 construction loan to renovate the investment property into a rental
- Looked into tax liens and getting ready to pick up a few of those this week
Pretty big month for my finances!
By the numbers
Not only all of that, but I’m also up $10,000 this month.
And not to count any chickens before they hatch, but I’m pretty sure I’ll reach my $500,000 goal sometime in 2025.
One — eventually two — investment properties while planning for my grandmother’s decline, in addition to raising three kids and working a full-time job. I’m glad I used what I had available to make it easier for myself right now instead of grinding the slow march toward an eventual retirement.
And I didn’t lose any net worth in the process. In fact, I used it to create more.
| Current | Last Month | Change | 2025 Goal | ||
|---|---|---|---|---|---|
| ASSETS | |||||
| Overall investments | $305,672 | $336,134 | -$30,462 | As much as possible | |
| Roth IRA total | $50,719 | $88,118 | -$37,399 | ||
| Roth IRA 2024 | $2,700 | $2,700 | xx | ||
| Roth IRA 2025 | $0 | $0 | xx | $7,000 (in new contributions) | |
| Taxable brokerage + UTMAs | $4,384 | $4,274 | +$110 | $25,000 (total invested) | |
| Savings | $55 | $48 | +$7 | $30,000 | |
| Investment property #1 | $16,000 | xx | +$16,000 | $20,000 in equity | |
| Raw land | $40,400 | $40,400 | xx | No goal, just including for completeness 🙂 | Haven't gotten 2025 assessments yet |
| LIABILITIES | |||||
| Car loan | $22,098 | $22,495 | -$397 | As much as possible | |
| Credit card #1 | $0 | $8,063 | -$8,063 | $0 | COMPLETE! |
| Credit card #2 (0% APR) | $11,465 | $11,704 | -$239 | As much as possible | |
| Net worth in Empower Personal Dashboard | $360,024 | $350,615 | +9,409 | $500,000 (overall goal) | Track your net worth with Personal Capital |
Feeling encouraged and grateful
Short- and long-term goals still include:
- Pay off ALL credit cards
- Work up to 15% in 401k contributions from my job
- Save $7,000 in my Roth IRA (to count toward the 2025 limit — I’ve given up on 2024’s Roth IRA)
- Build up cash reserves for savings and to buy more real estate
- Renovate my first investment property
February 2025 Freedom update bottom line
And just like that, I’m back on track. I’ve given myself a huge project in the form of a fix-and-hold property that I bought for $16,000. After it’s all done, it should add $35,000+ to my net worth and give me a little extra cash each month. And I solved my credit card debt in the process (and didn’t pay any penalties).
On a sad yet hopeful note, I’ll eventually inherit my grandmother’s house and turn that into a rental property as well. It’s in an excellent location and will be a solid rental with no mortgage and good cash flow.
2025 is looking like the year I will sail right past the $500,000 mark, thus achieving my goal within a year or so of the original target date. Nothing has happened the way I expected it to. Life has happened, and I’ve adjusted my plans every month to include the changes.
I’ll continue to document the construction loan and gut rehab process until I officially reach the mark. It should be… fun? Definitely a learning process as it IS my first rodeo.
Man, I’m so grateful for this space. Without it, I would’ve likely kept grinding away, growing more and more despondent without insight into every resource available to me. These monthly updates have given me insight, a place to vent and think out loud, and a community of people sharing my goals and giving encouragement.
As always, thank you for reading and following my journey. Hope everyone is doing well!
Stay safe and scrappy out there! ✨
-H.
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More red flags than a Chinese parade. I hope all your assumptions turn out to be reality.
Lol, I have never heard that expression before, but I love it! And… same.
Good for you. Buying a house, fixing it up, finding good renters who won’t be problematic wasn’t perhaps quite what I meant by taking it easy but if you’re happy then that’s really all that matters. If nothing else a diversified income stream is always good although you might want to consider spending a half year learning the ins and outs of being a landlord before obtaining more properties. I haven’t done it myself but I imagine there’s a learning curve. Once you’re ahead of the curve and have made all your rookie mistakes it may be easier to ramp up. Just a thought.
Good move on your grandmother’s estate planning.
All good — it feels better to have a big project than to sit and watch the whims of the stock market (you know how much I love a massive project). I have a real estate background + a network of local investors, so feel prepared and supported. I also chose a low-stakes property to start with to get some learning done.
Thanks for the perspective. Always appreciated!
Not trying to be critical as everyone’s tolerance for risk and life complications look different, but I am curious what your thoughts on the raw land purchase look like long term. I may have missed the post where you laid out the rationale for purchasing but its hard to miss that the “value” is about the same as what you pulled out of your Roth which will accrue tax free returns, unlike the land. I can respect the love of projects, but it seems like with young kids, property in multiple states, and now a historic renovation and attempting to get GOOD renters, you’re going to have a bunch of balls in the air at once. Best of luck – that’s more than I would want to handle all at once.