Hey everybody! (Or just my wife, because she’s the only one reading this so far!) I’m thrilled that I’m actually writing another post because I tend to get excited about new ideas and projects, rip into them all gung-ho, and then fizzle out not long after. I suffer from the Roman Candle Syndrome. Starting something is pretty easy, finishing is the tough part. I think it’s the novelty of a new idea that pushes people past the starting line; in my case the thought, “I’m going to write a blog, and millions of people are going to be positively impacted, and the world will be a brighter place for it because they’re going to see that being buried in a financial crap heap doesn’t mean they can’t tunnel their way out!” got me going. I’m still working on finding whatever that thing is that will pull me across the finish – in this blog, in the tunneling myself out of said heap, etc.
Knowing how to finish isn’t a prerequisite for starting, but knowing where you are is.
Here are the paths I’d like to travel with this blog in hopes that it’ll be helpful and easy to follow. I’d like to keep my posts (hopefully) separately focused on:
- How I got myself buried so deep in debt & the lessons I’ve learned along the way. Another disclaimer!! I’m a very high- risk person by nature, so some of the things I’ve attempted before to make or save money may seem absolutely ridiculous… because most of the time they were. I’m an Industrial Engineer by trade, and I was recently offered a promotion to “Safety Engineer”… I didn’t take it. I’m not that guy.
- My ever changing and expanding plans for improving the choices in life available to me along with the actions I’m taking to move closer to the goal.
If I’m going to tell you how I got here, and how I’ll get to where I’m going, I think it’s important to tell you where I am. After all, it’s impossible to get to where you want to be without knowing where you currently stand. That analogy makes more sense if you think about an atlas. Do they still make those??
Sorry if this next part is a bit dry! Here’s where I am:
- I’m employed as an Industrial Engineer in Virginia with a salary of just under $60k/yr. I’m 29, so not quite an adult yet, and I’ve been with the same company since graduating college with my B.S. (you know what that means) in 2011.
- My wife is 27, and she owns and runs (and I co-own) a healthcare practice. We’ve had it for less than a year at this point, and while it’s already cash flow positive, it’s still currently in debt (to us. Does that make sense? If not, it will as we go).
- We own a house most recently appraised at $211k (Zillow says it’s lower…), on which we owe about $194k. We bought it just 6 months ago because we were sick of living in apartment and “throwing our money down the drain” by renting. At least that was our thought process.
- We owe a combined $80k in student loans. It took me 6 years and 3 schools to get my 4 year degree. It took my wife 3.5 years to do the same. You can see who the productive one between us is.
- We currently owe, at the time I’m writing this, $20k in credit card debt. Some personal and some related to our business.
- Emergency fund? Ha. Nope. (Risky much?)
- We don’t have any retirement accounts or real estate investments… or investments of any kind really at the moment. I opted not to participate in my employer’s 401k when I started and have stuck to my guns! Here was my thought on that, “I can do better things with that money than stuff it in a retirement account I won’t be able to touch until I’m 200 years old.” After all, I plan to retire far before then. FYI, this isn’t a good idea unless you actually use the money you aren’t putting in your 401k for something that produces at least the same return your 401k would have… Even then it may not be a good idea! I’ll explain what I did with that money another time.
Ok, so let’s wrap it up.
Assets? Not much on paper. And debt? Tons. But what about cash flow? What about expenses? What about “the gap” (the distance between our income and our expenses)? Here’s why I feel confident that my wife and I are on a track to financial independence within just a few years!
Our cash flow is currently around $7-8k/month gross. ($4800 from my traditional employment, and around $3000 from our healthcare business)
And our expenses are between $2500 – $3500/month. I have a detailed budget but don’t actually use it very well.
This gives my wife and me a gap of roughly +$4000 each month, barring any unexpected snafus. Of which there are many.
Is this good or bad? Are we rich or poor? No clue. I guess it depends on your perspective. Our net worth is currently just above complete garbage. But our cash flow, I feel, is starting to open up more choices for us.
And that’s what I’m chasing after. Better choices.
What do you think? Let me know if I’m being a complete idiot, or if you think I’m on to something good… or neither! Thanks for reading!