I know it hasn’t been that long since I previously posted my alternative income streams plan and progress. However, I’m doing fairly well keeping expenses down and as long as I’m making progress, I might as well do it once every two weeks. If it seems like I’m making unrealistic progress, it’s because my fiancee and I are making the kind of income that you often see in Millionaires in the Making.
The numbers below are a little deceiving. As you may be able to tell, I’ve reduced my necessary expenses. A large portion is an adjustment to the grocery bill. We just haven’t had the need to by as much food since I get free lunch at work. Also, I’ve found that since my commute is almost all highway, I’m getting further than I thought on my transportation costs. Because of this I’ve gone back and restated my goal which is now $1699. Lastly, I eliminated $10 by paying off $1000 from my Heloc.
My Alternative Income is up due to some more loans in Prosper. Again, I’m adjusting that income downward for risk and taxes. I’ve also thrown in the gains from other bank interest (which isn’t much or I’d apply it money my HELOC) as well as this blog (which again isn’t much). It’s comforting to know that I’m almost at the point where my cell phone could be paid off every month. Not that I’d do that, I want my money to continue to compound.
| Date | Alternative Income | Necessary Expenses | To Go |
| 10/15/2006 | $17.00 | $1,699.00 | $1,682.00 |
| 10/31/2006 | $26.00 | $1,689.00 | $1,663.00 |
As you see in the update, I’m $19 closer to my goal. I’m not sure if I’ll be able to continue the progress. First, it’s been so good, there’s bound to be some drop off. Second, now that my company is getting a 401K, I’m going to spend the rest of this year maxing that out. I also have to save for my Roth IRA. I’ve got net worth goals to think about as well.
If you have some money saved, or you or your fiance’s credit is good, you may take on a higher return investment, like a cash flow business, or other investment properties. Seems like it might be faster way to get to your goals. Start thinking abuot how you can leverage what you have to get the best return. Just my two cents.
I have great credit and I think her’s is probably a little above average to very good. I’ve been trying to get her to get a free credit report for some time, but it’s always second fiddle to some other chore that we have to do around the house or for the wedding.
That said, we don’t have a lot of liquid cash saved up. I’d say we have under $10,000. I know a lot of people say we should have more in cash as an emergency fund, but I firmly believe in using a HELOC for those emergencies. Of course that made more sense when I could write the interest off on my taxes. As far as the money that I am investing, it’s making about a 16% risk-adjusted return on Prosper. I’m not really sure where else I can do that without investing tens of thousands of dollars.
We each have “investment” properties – homes that we used to be our primary residence, but is not rented out. She’s cash flow even on hers – I’m cash flow negative on mine, but it beats selling at a loss from where I bought it two years ago. Unfortunately, the only two areas that I really know real estate-wise are Boston and California. I think it’s very tough to cash flow there if it’s even possible at all. I have friend who bought an apartment building and it’s not working out for him at all. He has every real estate connection and 15+ years of experience and it’s not working out well for him. I like the idea of using leverage for real estate in general, but I can’t seem to find anything that near cashflowing in this market. I’m learning though and I think I’ll find something at some point.
It seems there are a lot of PF Bloggers who are sort of in your situation. I became financially free on than what you have. I just figured out how to turn it into cash flow. I have two areas I invest in, or rather two talented Money Makers I invest with. I was thinking about putting together some opportunities for the PF Bloggers to go in on, I’m just not sure about how risk averse most are. You both have rental props that good- shows you can manage risk- which is good becasue thats where the higher returns are for people who know what they are doing.
Thanks, I’m definitely looking to take a lot more risk than the “typical” PF Blogger. I don’t know what typical is, but it seems like a fair amount are trying to get out of debt, while I’m looking for a good combination of being a tortoise and a hare.