Editorial Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
I’ve been wanting to talk about personal money stuff for the longest time. After all, my tagline has always been “Investing. Positivity. Oh, and travel.”
Fear held me back because I didn’t want to sound like I didn’t know what I was talking about. I was afraid of impostor syndrome. And revealing financial details can introduce shame because you’re officially throwing out your yard stick for everyone to see.
But you know what? I started this blog over six years ago before I knew what I was doing with miles and points and learned as I went along. I got a lot of stuff wrong, things changed, and I grew. I was scared then too. But also:
- Eff it
- Jump in both feet first
- Learn as you go
- Start somewhere
- Do it ugly
- Nothing is ever lost by creating
The biggest point of contention was that – I’m 35 now – a strapping young buck to be sure, but when I see other financial bloggers retiring at 30 and I still have student loans and credit card debt I’m like… feeling so behind.
But by what measurement? I can’t – and shouldn’t – compare someone else’s end point to my in-process. Although I wonder… what the hell have I been doing for the last 15 years? 😵
In the spirit of starting somewhere and being where you are, I want to keep myself accounted for and confess my dirtiest financial deeds.
In This Post
November 2019 Freedom update
First of all, I don’t think of money as money. I call it freedom.
Money is the key to my freedom – a tool for an outcome. So when I spend, I understand I’m trading something from my future for something in my present. And most of the time, I’m OK with that. I like to be happy now AND I want to make sure I’m responsible for later.
In that vein, I want to start doing these Freedom updates. I want to talk about money and how it makes me feel and what I’m doing to plan for myself.
Here goes nothing.
I have $20,000 in credit card debt 💥
Yeah. Ouch. How’d that happen?
I mean, as a semi-famous points blogger (💅) who espouses payments in full, am I just a big hypocrite for having a balance on my cards?
I don’t know how it happened. I mean I do, but there was a moment where the hits kept on coming:
- My AC broke in July in TEXAS and I had to get a whole new unit – $5,000+
- I got dumped and moved back to Dallas from Austin – $2,000+
- Then took a trip to Iceland and Greenland, and on to Mexico City and just charged it all – another $3,000+
- A freaking assessment from my HOA for a new roof – $2,000
All the while, paying rent plus a mortgage, switching jobs, back and forth between Dallas and Austin… not to be a sob story or a COMPLAINYPANTS but shit was shitty for a second there.
You’ll be happy to know I’m not paying a dime of interest on my balances. I did a 0% APR balance transfer offer with an extremely reasonable 1% fee and consolidated all my cards into one place. I have until April 2020 to pay it off, and I will.
If one thing’s for certain, it’s that I will never pay a dime in interest to a bank on my credit card reward earnings. So that’s the ace in my hole – and thank gods that option was available to me as a financial tool.
But those 0% APR offers are slippery slope if you don’t watch it. They’re designed to keep you down. But I moved, got a new job, and am aggressively making payments.
I’m anxious to save for my future
Having credit card debt – any debt – prevents you from truly planning your future.
If you’re paying back what you owe, you’re never moving forward. I hate that I’m spending my time and money making up for how despondent and hopeless I felt earlier this year. I could get down on myself, and I did – but I’m letting it go and taking action.
While I do feel empowered, I must say, paying off debt feels like postponing your life. It sucks.
I can’t wait to put this energy into saving, cutting costs, and finally getting ahead. Hence my audacious plan.
Where I’ve been
So now you know I’m not a millionaire or anywhere close. I actually come from a pretty poor family in rural Mississippi. As long as I can remember, I’ve always wanted to travel. Travel is my biggest passion in life.
Starting this blog and being able to write about all the cool places I’ve been and talking about miles and points is seriously such a luxury.
And now I want to chronicle my journey into having a $500K net worth – because it was negative for so, so long. I wasn’t even worth zero, but less than zero.
First of all, student loan debt – a whole other issue – has kept me down and hangs over me every day of my life.
But somewhere along the line, I opened an IRA with Fidelity and maxed it out a few years in a row. I had a 401k with my last company and again with my current one.
It added up. I saved when I could. Over time, I managed to squirrel away nearly $71,000 in investment accounts. A good beginning.
Then I bought a condo here in Dallas. I paid $173K for it back in 2015, have it paid down to $145K, and now it’s worth about $205K. So ~$60,000 in equity lives in my primary residence.
Of course, I still owe ~$47,000 in student loans. Plus I have a car payment and the aforementioned mortgage. And all the credit cards.
But even still, I’m currently a little under $100K net worth. That’s with my investments and equity, and also takes into account my student loans and what I owe on the credit cards.
I anticipate I can pay off my credit cards in another 4 or 5 months. And I plan to just make the minimum payments on my student loans and let them fester.
- Investing Vs Pay Down Student Loans: Why I’m Gonna Aggressively Save for Retirement and Just Pay the Minimum
So that’s my base point.
My plan to be worth $500,000 in 5 years
In the next five years, I will:
- Buy as many investment properties as I can (probably two) – $TBD
- Max out my 401k every year – $95,000 ($19K x 5)
- Max out my IRA every year – $30,000 ($6K x 5)
- Save $20,000 in a savings account
- Pay aggressively toward my mortgage and build more equity – $50,000
- Pay off my car loan – $10,000 (my car is holding its value really well)
- Hope for continued appreciation on my condo and returns on my investments – $???
- Save and/or invest my bonuses, any blog income, and tax refunds – $???
Of course any 5-year plan is going to have missing variables. There’s a lot I can control – and a lot I can’t. 🔮
I don’t know how the housing market will perform. Will it soften? Will Dallas skyrocket? Will I just level out, or need tons of repairs and maintenance?
How will the stock market go? More continued bull run, or will it tank?
And of course I’d like to buy investment properties, but they’re just an idea right now. The exact numbers will come into play down the road.
I’ll save and invest as much as I possibly can. In the numbers above, I’ve accounted for a bit over $200,000 in increased net worth. With my current ~$100,000, that still leaves a gap of $200,000.
Within that gap, I will fill it with investment properties, taxable brokerage accounts, and savings. And by the end of 5 years, my net worth will be at least $500,000.
My first Freedom update
As part of tracking my goals, I need to share where I’m starting from so I can chart my progress. So here’s how my numbers look as I head into November 2019:
|Roth IRA 2019||xx||$0||$6,000|
|Roth IRA 2020||xx||$0||$6,000|
|401k||xx||$2,333||As much as possible|
|Overall investments||xx||$70,962||As much as possible|
|Net worth in Personal Capital||xx||$95,246||$500,000||Track your net worth with Personal Capital|
This will track my credit card payoffs, savings, loans, retirement accounts, and of course net worth.
I started tracking this is August 2019. This will come to fruition in August 2024. I will be 40 by then.
That seems so late to “only” have a net worth of $500,000 (but why? I really wonder). I don’t think I’ll ever stop comparing myself to my financial blogger heroes, but I will keep working every month toward my goals.
It seems lofty, but I have a great track record of achieving what I set out to do, ever since my grandmother told me I can do anything I set my mind to when I was little.
I have a huge gap to fill between what’s planned ($300K) and what the end goal is ($500K). I attribute that gap to equity, capital gains, forthcoming investment properties, and whatever else pops up. I can’t see all of it clearly now, but that’s not the point. Taking big steps is the point, even if I can’t see the entire staircase.
I don’t know whether I’m early or late, too old or too young, thinking too idealistically or not big enough.
But I’m happy about putting my goals into words, tracking them, and starting to share. Whatever happens will have to be good enough. If anything, I have to learn to be gentler with myself.
So that’s my first Freedom update!
Whew. I’m nervous about sending this particular missive into the universe, but nothing ventured, nothing gained, right?
And if you want to start your financial journey:
- Track your net worth with Personal Capital
- Start a blog and learn how to monetize it
- Get a travel rewards card
- Open a SoFi Money account to distribute your funds – it’s the best checking account out there right now (here’s my review)
More to come next month. Thank you for sticking with me through this!* If you liked this post, consider signing up to receive free blog posts in an RSS reader and you’ll never miss an update! And thanks for using my links to apply for new card offers!
Out and Out has partnered with CardRatings for our coverage of credit card products. Out and Out and CardRatings may receive a commission from card issuers.
- Chase Sapphire Preferred - Earn 100,000 Chase Ultimate Rewards points and 2X bonus points for travel and dining - BEST EVER OFFER!
- Chase Ink Business Preferred - Earn 100,000 Chase Ultimate Rewards points and 3X bonus points for travel, internet, cable, and phone service
- Amex Blue Business Plus - Earn 10,000 Amex Membership Rewards points and 2X bonus points on up to $50,000 in spending per year with NO annual fee
The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.