Friday, January 1, 2016

Update - January, 2016 - Minimilism

What a difference a couple of months makes. 

  • Two months ago we were living in a paid-off house.
    • Now we live in a paid off 29' R.V.(2006 bumper-pull trailer).
This is a move toward a more simplified, liberated, freer lifestyle.  What's really amazing is that my wife is totally on board (though not without having had to overcome some typical reservations, i.e. Where will we put all of our clothes?  Where will you put your office?  Where will I go when you start to snore?).  We've been able to resolve everything but the last concern.  That will resolve itself when I drop ten pounds.  Now I have no excuse since we are literally parked across the street from a gym...dang it!

We currently own seven houses.  We've lived in two of them over the years.  But now, living in what amounts to a "tiny home", we couldn't feel more content.  That's due in part to the fact that we have a reason, a purpose for this life-style adjustment:  We want maximum mobility at minimal cost.  We want to be able to travel and move around at the drop of a hat.  We want to live on a small passive income.  We don't want chaos and clutter.  We don't need a lot of room to be happy.  And you know what?  It's working.  For example, we just returned from a couple of weeks in Costa Rica and we're getting ready to fly to California for another week and a half to visit my wife's parents.  I'll likely do some volunteer work in New York this Spring for a month or so, and the list goes on.

We are beginning to reap the rewards of our rental mortgage payoff journey.  But that goal has always been combined with the reduction of spending and increase of savings.  As our budget now stands, we live on just under $2,000 p/mo.  That includes $670.00 per month for a high-deductible health-care plan.  Our cost for the ACA plan rose 50% for 2016.  That was a shocker and one that caused me a mini-fit.

Mind you, this is all completely voluntary as we still reap the rewards of a business we own and draw about 75k a year from.  This money has largely been earmarked for the rental mortgage payoff plan that is the subject of this blog.  We have that business on the selling block and are readying ourselves for the loss of most of that income going forward.  If it sells, than we'll pay off the balance of this final mortgage.  If not, then we'll stay the course with the high monthly principal payments and just invest the rest until things change. Either way, it's all good. 

Speaking of that final mortgage balance...

Jan 1, 2013 (Beginning Bal).                                           January 1st, 2016                                Amount Paid Off
==========================================================================
House #1 - $70,908                                         House #1 - $24,733                      $46,175
House #2 - $57,619                                         House #2 - $ 0                              $57,619
House #3 - $49,123                                         House #3 - $ 0                              $49,123
-----------------------------                                    -----------------------------               -----------------------------
Total:       $177,650                                                          $24,733                     $152,917 (-86.07%)

Looking back over last year, we have paid off nearly $40,000.  The balance last January was $63,163.  It now stands at $24,733.  Wow!  That's a lot of smackers thrown at the mortgage!

While we sent an additional $4,000 to the principal this month, that's not as much as we should've sent.  We decided to maximize the tax advantages of sending the final contribution of more than $2,000 to finish out the 2015 HSA contributions.  I feel good about that.  Also, we had tiled the floor and shower and replaced the water heater of our house before moving out.  We also paid for the Costa Rica and California trips on top of everything else.  That set us back a bit.  However, I believe we are looking forward to a hefty principal payment for next month as we'll dip into the rental monies to add to our payment.  I relish the thought of getting that balance under $20k.

This is the final stretch.  Three years ago when I started this blog we said we would pay off $177,650 in just forty-two months.  We are now down to the last six months and it looks like a checkered flag I see waving in the distance.  Once we pay that last house off, I will officially declare ourselves FI!  The additional $1,476.46 added to our other previous rental real estate income will be more than enough to make that declaration.  We're turning the page to a new and very exciting chapter of our lives.

In the meantime, let's all make this a productive year and stretch forward toward the realization of our goals.  I know we're not the only ones out there working hard, making sacrifices and displaying resolute determination to achieve financial freedom.  Let us know how your doing.

2 comments:

No Nonsense Landlord said...

I am planning in an RV purchase too, just not for full time living. A 35' 5th wheel for vacations.

Keep paying down the mortgages, it will be worth it as you can see already.

Prashanth Y said...

Just curious... Which location do you own 7 homes?