First Milestone Reached!

[NinjaPigeon]

I know this isn't as impressive as many of the other people on this board, but I reached my first significant milestone today: I have a positive net worth!

I still have about $37k in debt ($27k student loan @3.65% and a $10k car note @2.9%), but I'm hoping to chop it down another $9k by Christmas.

Thanks for all of the more experienced members who have given such great information to a newcomer like me. Hard to believe that just 15 months ago my net worth was -$38k

NP.

 

[samclem]

Congratulations--sounds like you're very much onboard the train. Any special tricks you'd like to pass along for others, or was it just cutting out the extras and applying the surplus against your debt?

samclem

 

[Nords]

Gotta start somewhere-- congratulations!

I still have about $37k in debt ($27k student loan @3.65% and a $10k car note @2.9%), but I'm hoping to chop it down another $9k by Christmas.

Although at those interest rates, I'd want to take on even more debt and buy CDs.

 

[NinjaPigeon]

Although at those interest rates, I'd want to take on even more debt and buy CDs.

Yah, that's why I haven't paid them off yet, even though I could come pretty close. I'm trying to find the happy medium between growing my savings and paying down my "cheap" debt.

 

[mickeyd]

You are obviously doing something right today and obvoiusly got yourself into a bit of a jam (-$38k jam) during a previous period.

Congratulations on your successful efforts up to this point.

May I inquire as to what actions you took to turn it around? What motivation did you have? What event(s) sparked your positive action?

 

[thefed]

I'm guessing you have a HEFTY salary (compared to em at least!)....esp if you paid down 38k in debt in one year.

Good luck!

 

[NinjaPigeon]

You are obviously doing something right today and obvoiusly got yourself into a bit of a jam (-$38k jam) during a previous period.

Ya know, I don't think my jam was so bad compared to many people my age. At the height of my debt, I had 33k for student loans, 15k on my car, and 3k on my credit cards. The student loans were worth every penny, as at every job I've gotten, I've been told my alma mater was one of the factors in the decision. The car was probably not the greatest choice, as I could have gotten a used one. But I did need a car, and I didn't buy a very expensive car. The CC debt was leftover from college, which was a whopping $8.7k at over 10% in 12/02

The real difference in my bottom line is that back then, I had 10k in the bank. Now I'm closing in on 40k.

I'm guessing you have a HEFTY salary (compared to em at least!)....esp if you paid down 38k in debt in one year.

Some would say my salary is hefty, but a lot of the "some" also do not LBYM. Last year I made 68k. This year is going much better so far, but I am currently in a contract position that may not turn into a permanent one if the team I'm on doesn't have a spot.

So my salary certainly helps, but the real reason I was able to make such progress is because I save about 33% of my gross. This, above all else, has really allowed me to make those strides. Especially since my salary will most likely drop in the next few years based on some other factors in my life.

I have a good friend who has comparable work and salary history to me. When we both broke the 60k mark, he bought a 300k condo and a 40k car. I stuck with a 2br apartment with a roommate and my 15k civic. His 4k tv and custom tailored shirts are certainly nice, and he has found a nice way to pay half the taxes that I do, so I guess I'll know in a few years which approach was the wiser

 

[KB]

I think you're doing great....

 

[xmanz3]

You are doing great!  I would continue paying off that debt and diversifiy your investments.

 

[shorttimer]

It is hard not to compare with others, but you are doing great. Isn't it amazing what you can do when you put your mind to it? LBYM can be a challenge, and there is nothing wrong with buying a new car if it is what you want and you realize the value of the money spent on it.

The good thing is that once you learn about investments and are earning interest instead of paying it net worth can really skyrocket.

 

[maddythebeagle]

congrats. Glad to see you point out that 60-70k is a lot if you spend wisely.

 

[ESRBob]

Debt that cheap sounds like a bargain -- you might just plan to pay it off slowly on the assumption/hope that your average returns in other investments will do even better. I only say that since you're on the train and (sounds like) won't be dipping into your savings to fund lifestyle any time soon. Keep adding to it and you'll start to get that virtuous-cycle feeling that comes from moving forward and making your money work for you -- little elves beavering away 24/7 while you do other stuff

 

[astromeria]

Don't regret buying that new (and modest) car, Pidge--just keep on driving it! A Civic should give you 200,000-300,000 miles easy.

When my hsuband contracted between some full-time programmer gigs, we always saved 50-65% of his pay (which was easy since I had a full-time job). Not only did we maintain the retirement savings, but we never worried about the big tax hit, and we really beefed up the next-car, emergency, and "freedom" funds.

 

[laurence]

Congrats! That is a huge milestone, one many people don't see! How old are you?

 

[Texas Proud]

Yah, that's why I haven't paid them off yet, even though I could come pretty close.  I'm trying to find the happy medium between growing my savings and paying down my "cheap" debt.

First, congrats on going positive... you are now on the upper half of Americans...

But, there is not happy medium between growing savings and paying off "cheap" debt. Growing wins hands down... you S T R E T C H that debt as long as you can with those rates.. never pay more than the minimum amount... you will have more money in the end.

 

[thefed]

congrats! I love hitting self proclaimed milestones. I just hit 5k in retirement accts a month or 2 ago...

I just hit another milestone, and that's 15k of 'liquid assets'. Well, theyre not so liquid, as 20% is in a 401k, but I COULD get it out if need be.

3.2k in 401k
3.2k on ROTH
8k cash
1k penny stocks


I have only 12k equiy left in my regular home (raided it with a HELOC for investing)
I also just acquired a 45k home for about 22k after repairs! that should help nicely with my net worth, as I own it free and clear

I still have about 14k on ccards, but a lot of that is business related (4-5k) and my daily driver car (3500), even a few grand i thre on my mortgage (3k). 90% is at 0% interest! That's why I dont pay it down fast!!!

So, all in all, I guess my net worth is about: 58k!!!! Most of you laugh at that, I but I only began saving $$ 1 year ago, and bought my 1st home 3 yrs ago (im 22)

I never really thought about it, but hey...why not now?

 

[NinjaPigeon]

Well, you have me beat I'm 28, and am at the 2k mark right now (although I have almost 40k in assets). Next week should push me up to the 4k mark if all goes as planned. Technically, I'm probably better than I count, as 10k of my debt is my car and I don't count the value of the car itself as an asset.

Unfortunately, I'm gonna lose some of my disposable income in a couple weeks when I go permanent with my company. I'll take a 13.5% cut in salary, and a total loss of overtime. However, it's still good money, so I can't complain

Best of luck to you on your housing investment. Hope it works out