All Forum Posts by: Kevin C.

Net Worth Percentage Change - 2006 to 2010:

2006 +51%
2007 +37%
2008 -10%
2009 +7 %
2010 +10%

It was mid 2010 before we were back to 2007 levels.

2008 - Stock market crash took its toll.

2009 - Sold our personal residence, was a tough market, took less than we hoped for when we sold our home. Not a fire sale, but the market was weak and we priced to sell.

2010 - Spent quite a bit more than we had anticipated on updates to our new place.

For 2011 we have no anticipated major expenditures, should see Net Worth rise 15 to 20%. Any RE Investments will only add to the projected increase.

A Balance Sheet will only be as accurate as the numbers feed into it, and yes, a fire sale will take the wind out of the sails for sure.

Then again, 50K in monthly rent doesn't mean anything either. I could buy an Apt complex that grosses 50K in rent per month, but if my expenses were 55K per month, where does that put me?

Assume two investors:
Investor A has 3 properties that gross 5K a month.
Investor B has 30 properties that gross 50K a month.

Who is better off?
Who has more net worth?
Who is wealthy?

There is no way you can tell from the information given, but a balance sheet would sure shed some light on it, even if the balance sheet was not 100% accurate.

Hard to fudge on what is owed, and if the value is fudged, due diligence would uncover that.

Unfortunately, I mean literally banking it, getting a measly 1.x% in interest.

I don't want any risk with this money, so it sits until I find a suitable investment for it.

If I don't find something suitable and have far too much there, I'll pay off a rental, or pay down a large chunk of our personal residence.

Ultimately, my goal is to hold paid off properties, both our personal residence and investment properties.

Building a large reserve is OK by me, if nothing comes along when the balance reaches a certain point, I'll use large chunks of it to pay down mortgages.

I also like old muscle cars, sold one I had a couple years ago to a man in Australia, more than doubled my money (I held it for around 4 years). I'm on the lookout for another one, if something catches my eye, I'll buy it, with cash of course.

Cash is OK by me, gives me tremendous flexibility. If there were a no-risk, or very very low risk avenue where I could earn 6 to 8% I'd be interested, but I'm not aware of those vehicles.

Charles - I'm able to bank about 30% of my gross salary annually, and that currently can increase my net worth by double digits annually.

In 2008, my net worth took a pretty good hit, erasing all the savings contributions and then some.

It's all back now plus more, but that hit added a year or two to a significant goal I was on target to achieve by 2013.

Indeed, double digit growth will be hard to maintain as net worth increases. The dollars will remain the same, but the percentages will certainly trend down.

My guess would be the majority of people have no idea of their net worth.

In many cases, even if they did, they'd probably see it was negative AND moving in the wrong direction.

I absolutely know where I stand financially and track it on an almost daily basis via Quicken.

I run just about everything through Quicken to include stocks. Quicken has the ability to update stock prices on demand, and I do that almost daily.

I do not include depreciating assets such as cars, boats and motorized 'toys' in net worth calculations. I don't borrow when purchasing vehicles, and the ones we own are worth a decent amount, but I leave them out of the equation.

The only debt I have is on real estate and I have a minimum of 30% equity on each property I own.

As far as net worth growth, I have a dollar number in mind that I shoot for annually. I'm able to save a significant amount from my full-time job which in itself contributes to decent monthly growth.

Congratulations Joe!
That's incredible success for your first year!

I was hoping to add another rental property in 2010, but that didn't happen.

Still, in 2010 I converted one of my existing rentals from being rented to a family member to being rented at market rate to non-family.

In doing so I learned about getting the property ready, advertising for a tenant, qualifying a tenant, getting a lease signed and managing the property.

I'm happy with what I accomplished in 2010 by successfully getting one property rented at market rate and successfully managing it - doing everything myself.

It's a little overwhelming getting that first property rented when you're handling everything on your own and you've never done it before.

That hurdle is behind me now.

Now that you mention it Marc, I recall the only concern back when we had aluminum wiring was the wiring in the house. Regardless of the feed (copper or aluminum), all I remember is that aluminum in the house was not so great.

I remember if I had to change a switch or outlet, I had to buy the pieces specifically designed for aluminum, and they were always at least twice the price of an outlet for copper.

We never had a problem with the wiring, but we were only in the house a few years.

These days, I'd avoid a house with aluminum wiring (not the feed, but the wiring throughout the house) I just don't want the additional risk associated with aluminum.

I had a home with aluminum wiring back around '80. If you pull a switch or outlet cover you should be able to see the wire, aluminum will be aluminum in color.

Some homes that were wired with aluminum have been converted to copper. The conversion may be just a pigtailed length of copper onto the existing aluminum wire, then the copper wire is connected to the switch/receptacle. I believe there was a salve of some sort that was supposed to be put on the aluminum to copper junction.

Wall switches and outlets designed for aluminum wiring will be stamped CO/ALR.

I'm not an electrician, just posting up some of what I remember from back when I had a home with aluminum wiring.

Edit to add: Based on what Charles posted, I'll add that I believe the main feed to our house was copper, then aluminum was used to wire the house. I have no idea if that would have been the norm.

Years ago, all of us kids were given the Carlton Sheets 'Nothing Down' book by our parents.

Not sure why they gave it to us, they were not into Real Estate.

Read it but never did anything relating to Real Estate at the time.

One of my Sisters married and moved to Montana with her husband to start a new life. They purchased a number of homes, fixed them up, and rented them out. That was 20+ years ago, the RE market in Montana has exploded since then and they are sitting on a gold mine. My sister tells me they used some of the nothing down concepts from the Carlton Sheets when they first started buying homes (they had very little money at the time). RE has been very good to them. They are semi-retired now and live off the cash flow from their houses and a seasonal business they run in MT.

I considered investing in RE many times over the years, just never could convince myself to get off the fence.

Finally bought a rental to rent to a family member, the next year I bought another one, again to rent to a family member.

Family is still in one of my rentals, the other property is now rented to an unrelated tenant.

Looking back, I wish I would have bought fewer new cars back in the day, and bought a rental or two instead. Can't change the past, just happy to finally be involved in Investment RE.

The market helps push me in as well - I figured RE can't be any rockier than the past few years in the market.