79 responses

  1. Financial Samurai
    January 17, 2012

    Nice job! IF you keep up your rate of increase, you will be a millionaire in just 2.5 years!

    Another great sign for the economy.

    Sam

  2. frugalportland
    January 16, 2012

    good work! It makes my "renting" mindset want to reevaluate.

    • YFS
      January 16, 2012

      What do you mean by your renting mindset?

      • frugalportland
        January 16, 2012

        oh, "rent until I'm completely out of consumer debt, then maybe think about buying"

      • YFS
        January 16, 2012

        That makes sense especially if you can rent for cheap. Nothing wrong with renting. Buying a home is a lifestyle choice. My net worth would be higher if I didn't buy my primary residence. There are tons of hidden costs involved with owning a home that don't make it into the media.

  3. Paula @ Afford Anyth
    January 16, 2012

    You mentioned "each property must pass our cash flow analysis test and our potential for appraisal test" — could you please describe (in detail) how you evaluate that? I'm doing the same thing (buy low, rent high) and I'd like to know what criteria you use.

    • YFS
      January 16, 2012

      I will explain this in future posts. It would be a very long comment if I typed it all here

  4. Ginger @ Girls Just
    January 7, 2012

    I agree with everyone else! You are seriously ahead of the game here! I may need to tap you for some PF advice! Im not sure it's worth it to calculate networth right now with our mortgage and student loan debt being what it is :-(

    • YFS
      January 8, 2012

      Thank Ginger! I think you should calculate your net worth. You should always at least know where you stand regardless of how you perceive the situation to be. By knowing where you stand, you know where to start. What is your game plan for handling the student loan debt and mortgage?

  5. youngandthrifty
    January 7, 2012

    Wow, super impressive!

    My net worth only increased by 11% from last year and it was interesting to calculate because it felt like I had saved more!

    Oh well, there's always next year that I can aim higher ;)

  6. SB @ One Cent At A T
    January 6, 2012

    Congrats very good job. I am intrigued to find out my situation.

    • YFS
      January 6, 2012

      Be sure to come back and let me know when you calculate your net worth and how you plan to improve upon your net worth in 2012

  7. Andrea
    January 5, 2012

    I think this is the most impressive result i've seen blogged so far, awesome job!

    i did double my networth but… coming from something like $7000 something that seems miniscule compared to this :p

    • YFS
      January 5, 2012

      Great job on doubling your net worth! Looks like we both gained 100%. What are your plans for keeping the momentum in 2012?

  8. Aaron Hung @aaronhun
    January 5, 2012

    WOW!! very nice gain YFS, you're really ahead of the game and I'm jealous haha. Most of our income are use to paying off debts so hopefully we'll be able to catch up on our Net Worth.

    • YFS
      January 5, 2012

      Thank you! Good job on paying down debt! What are your 2012 net worth goals?

  9. Miss T @ Prairie Eco
    January 5, 2012

    Wow, congratulations. You and you family deserve an applause. Increasing your networth is a huge accomplishment.

    I know kids cost money but I still think they are worth it. You can always make the money up some other way.

    Our networth steadily climbs every year which means we are headed in the right direction. I haven't calculated at what percentage though. I am now curious.

    • YFS
      January 5, 2012

      Thanks Miss T! My goal is to focus on increasing net worth year over year. That's how I know we are going in the right direction.

  10. retirebyforty
    January 4, 2012

    Wow, that is impressive. Our net worth is more or less flat in 2011. A little depressing because we added a bunch of contribution to the 401k. Great job on the properties.

    • retirebyforty
      January 5, 2012

      Question. When you say "Property 1 pays us $925 a month in rent with debt services of 130 dollars."

      What does debt services here mean? Does it mean the mortgage is $130/month? If so, you got a really great deal. The property price here is still mostly flat/down.

      • YFS
        January 5, 2012

        Debt service means mortgage or in my case a HELOC on each property. It cost us 130 dollars a month for the HELOC.

        Oh we got a steal.. but then again not many landlords would go into the inner city for their rental properties or cater exclusively to tenants who rely on government assistance.

      • Paula @ Afford Anyth
        January 16, 2012

        Your loan costs $130 per month, but how much are the other expenses? You need to pay homeowner's insurance, pest control, property management fees, and (presumably) water and trash pick-up (if its customary for a landlord to cover those costs in your neighborhood). Then there's also the 'average' (spread-out) maintenance costs. What are your total monthly expenses for the rentals?

      • YFS
        January 16, 2012

        Paula,

        I have a rental property cash flow analysis post cued up which explains this in depth.

    • YFS
      January 5, 2012

      Hmm.. if you added a lot to your 401k and you turned out flat that sounds like you experienced some losses in your retirement accounts. Am I right? How is your portfolio currently allocated between equities and bonds?

      • retirebyforty
        January 6, 2012

        Actually we are up about 10% on the whole. The net worth was flat since March 2010. That's why i made a mistake earlier.

        Yes, I lost money in my 401k, but other investments and Mrs. RB40's account helped pull the whole net worth up. whew!

      • YFS
        January 6, 2012

        See that's not bad at all!.. 10% is no small potatoes! 10% of 2 million is 200k :-)

  11. Invest It Wisely
    January 4, 2012

    That is incredible! Ours went up less than that, but we did manage to save close to 50% of net income which I am happy about.

    • YFS
      January 5, 2012

      Saving 50% of net income is the way to go. I'm sure you had a huge % gain in net worth by saving that much income. Did you throw the 50% of your net income into savings or did you invest some of it?

      • Invest It Wisely
        January 5, 2012

        Much more if it went toward savings than investment this year. I also count things like I paid out the car loan, so that's a few thousand less on my neck. Didn't count changes in any market value increases, though ;)

      • YFS
        January 5, 2012

        Why did you count paying down debt into the equation and not market gains? For some reason this seems odd to me

      • Invest It Wisely
        January 5, 2012

        It's a conservative approach. If I reduced the debt principal by $5000, that to me is better than saving $5000 and leaving the debt at the same level. Market gains are nice to have, but you shouldn't count them as part of your savings goal. If your home rose from $200,00 to $220,000, it doesn't mean you should now save $20,000 less.

      • YFS
        January 5, 2012

        Gotcha. I use the traditional approach to calculating net worth.

        Assets minus Liabilities

        Once I find my true net worth I may use additional constraints to identify areas to work on.

      • Invest It Wisely
        January 5, 2012

        Yep I also think that is a good approach! I just looked at that and I personally increased by 36% in overall networth last year. Not so bad at all but not a home run. ;)

      • YFS
        January 5, 2012

        See 36% isn't bad. The key is to use the same calculation every year so you accurately catch your net worth. The only thing I do not count in my net worth calculation is the value of my cars. I know I can increase my worth by claiming my cars but for some reason adding a car into the mix is bull crap. The only exception to my car rule is if the car is a classic.

  12. Sustainable PF
    January 4, 2012

    Pretty remarkable YFS! Ours went up about $84k or 72.5%. I would love for it to go even higher but babies do cost money! Mrs. SPF won't have as much income next year as 3 months will be reduced pay while on leave.

    • YFS
      January 4, 2012

      Great job man! 72% is an amazing feat. You're right about children they definitely take a lot of income. But, I'm sure you can replace with a few side hustles.

  13. Corey @ Passive Inco
    January 4, 2012

    You're an inspiration. I would like to double my networth in 2012, but that is easy to do when it is low. :) Nice work on the rental properties.

    • YFS
      January 4, 2012

      Thanks Corey, what's your plan for 2012 to double your net worth?

  14. My University Money
    January 4, 2012

    That is truly incredible. I predicted back in 2009 that there would be people that made some serious gains as a result of the terrible market collapse. Here are the results! Being a landlord is not my cup of tea, I'm looking to increase my online income in the New Year and have gotten into some interesting local SEO circles. My wife is in school for two more years, and we're still saving 30% of my net income, so I'm assuming that when she starts work, living off of one income shouldn't be that difficult for us (allowing for a little lifestyle inflation based on my raises). Keep it up!

    • YFS
      January 4, 2012

      Being a landlord is not my cup of tea either that's why I hired a property manager lol. Our real estate business only requires my attention for 30 minutes a month. The only time it gets busy is when we just buy a new place and I have to get all the documents notarized. Aside from that I'm chillin' and collecting a check.

      You're doing great by saving 30% net income you're already ahead of the game. What is your plans for investing and making more money off your savings?

      I've never heard of SEO circles. Do my mind elaborating more on that?

  15. Jami
    January 4, 2012

    Congratulations! Real stories like this are highly inspirational! Thanks!

    My net worth is still negative due to my 10 debtors (including the massive consolidated student loan). I don't know if I'll ever have enough assets to offset my student loan. :( All I can figure to do is to use my income after expenses to pay the debts down which as I learned from you :) does very little to my net worth. Is renters' insurance an asset? If so, I increased my net worth by 20% (that's if I'm doing my math right by factoring the entire value of the policy even tho this doesn't mean that I can "reap" the entire value but only based on actual damages if anything happened). If not, I merely added another expense in annual insurance premium. And all of this talk inspires me to do research on what exactly I do own that is truly considered an "asset" and how does one "appraise" them. hmmmmmm

    Peace.

    • YFS
      January 4, 2012

      Jami,

      Renter insurance does not add to your net worth. If anything it will mainly replace assets if lost. You're right paying down debt does not increase your net worth but it gives you more capital to increase it in the future.

      For example, if you have 30 in cash (asset) and 30k student loans (liability) what is your net worth? The answer is 0. If you use the cash to pay your student loans you will be left with 0 in cash and 0 in student loan debt, but your net worth is still 0.

      What you gain by paying off debt is increased month cash flow since you don't have to use incoming money to pay off debt. You can now use this money to increase savings or investments.

      I'm glad this post could help you start on the right path. Let me know if I can help further

  16. John@MoneyPrinciple
    January 4, 2012

    Brill, well done. Almost straight out of our Cashflow experience I would say! Real estate is a good bet and you have done well. Sounds like 2012 will be good to you guys.:-)

    Real estate over here though hasn't taken the tumble it has in the States so there aren't quite the opportunities. All the same we did pretty well over the past couple of years paying down our negative wealth by something like $100k so it can be done.

    • YFS
      January 4, 2012

      Good job in paying down 100k of your obligations! How did you do in 2011?

      • maria@moneyprinciple
        January 6, 2012

        In 2011 we have increase our net wealth by close to $50,000. The year before was much better but still…

        Why did you say that paying down debt down't increase your net-wealth? What formula do you use to calculate it?

      • YFS
        January 6, 2012

        First things first congratulations on your net worth increase! What assets of yours increased to give you such a gain? Now to answer your question

        Eliminating debt doesn't increase your net worth because you will have to use your assets to essentially wipe out the liabilities making it a wash.

        For example purposes say a person has 30k in car debt and 30k sitting in a bank account. What is their net worth?

        If you use the net worth calculation of assets minus liabilities = net worth you would arrive at the answer of 0

        30K Asset – 30k Liability = 0 Net Worth

        Say that same person took the 30k in assets and paid off the 30k in liabilities what would their net worth be? Well the answer is the same

        0 assets – 0 liabilities = 0 Net Worth

        What paying down the debt will do is allow you to substantially increase your net worth in the future. You no longer have to service those debt obligations leaving more for savings and investing.

  17. Jen @ SheBloggs
    January 4, 2012

    All I can saw is WOW! Congratulations!!

    I love real estate and think it's one of the most important ways to increase net worth. My dream is to do what your did – buy distressed properties, renovate them and rent them out (the ultimate passive income, in my opinion).

    To answer question, I'm not sure how much my net worth has increased this past year. I haven't had my property appraised, but I think it may have appreciate by roughly $10,000 in 2011. My biggest accomplishment this past year however, was paying off $34,000.

    Can't wait to hear about the 4 new properties!

    • YFS
      January 4, 2012

      Congratulations on paying off 34k in debt. That's a major accomplishment.

      How much monthly income did you free up by paying off the 34k?
      What are you goals for your new found capital since you don't have to use it to service debt?

  18. LT
    January 4, 2012

    I need to get like you! Ok, I think a family meeting is in order for my household tonight. We will be reordering the 2012 goals. Not my too much though, we are on a good path. I am just trying to make it a great path.

    • YFS
      January 4, 2012

      Good job on calling a family meeting to reorder your 2012 goals. The key is multiple meetings. We try to have a talk at least once a month to go over our spending plan and goals to make sure we are making progress. If we are off course we make the necessary adjustments.

      What are some of your high level goals for 2012?

      • LT
        January 4, 2012

        In a brief meeting w/ the hubby over lunch, it looks like we will have 1 car and 2 credit cards paid off by the end of june. Then we will be prepping for the home purchase in july. we're using a VA loan which doesnt require a down payment but will be putting at least 5% down anyway.

        The biggest goals right now are mainly the home, finish knocking off the debt, & then looking into investment opportunities.

      • YFS
        January 4, 2012

        I'm curious if your VA loan doesn't require a down payment why put down 5%?

        Why not just use the down payment money to eliminate debt and free up some monthly capital?

      • LT
        January 4, 2012

        job gives it to us, so its basically free money

      • LT
        January 4, 2012

        this time around the job gives it to us, so its basically free money. besides the mortgage would be less and it would be paid off faster

      • YFS
        January 4, 2012

        Gotcha.. Man that's a nice perk to have. A company providing 5% of your home purchase.

      • LT
        January 5, 2012

        its not a normal benefit. it is a special circumstance for which we are entitled to this.

  19. Ceph
    January 4, 2012

    Awesome awesome results. Extremely encouraging! I'll be calling for services.

    • YFS
      January 4, 2012

      LOL Ceph you have all my contact information call any time. I love helping family!

  20. Jeffrey
    January 4, 2012

    Wow! That's impressive! I don't think my net worth increased much at all in 2011 since I was doing AmeriCorps most of the year and not earning much. I think I could have done a little better with side income towards the end of the year, but I was really just getting started and didn't know exactly what I was doing most of the time.

    • YFS
      January 4, 2012

      At least you have a plan and know you can gain more income on the side if you work at it! What is you detailed plan for increasing income?

  21. cashflowmantra
    January 4, 2012

    Well done. I am in the process of turning a corner so hopefully 2012 will be a year of improvement.

    • YFS
      January 4, 2012

      What do you mean by turning a corner cashflow?

  22. Kevin Mzansi
    January 4, 2012

    Seriously inspirational, YFS household! Well done!

    Multiple income streams + negotiating a pay bump has done some serious good to your Net Worth. Definitely something to emulate…

    My Net worth dropped in 2011. For sure getting it going the right way again in 2012.

    • YFS
      January 4, 2012

      Thank Kevin, we are still young and working on our plan so hopefully 2012 and beyond we can keep increasing our net worth.

      What happened 2011 to cause a drop?

      • Kevin Mzansi
        January 4, 2012

        It was quite expected. Went back to school to improve my skills and have been paying bills out of savings. My stock investments were also not very kind to me in 2011. Getting back into the workforce full-time this year will definitely get me going the right way again.

      • YFS
        January 4, 2012

        When you say went back to school to improve your skills what do you mean? Is this B-school, masters degree, bachelors? Also, what do you think the return on investment would be once you complete your education?

        Sorry to hear abut your investments. What happened why were they down? You didn't do and long term holdings of leverage ETF's did you :-)

        Did you quit a full time job to go back to school? Lose a job then went back to school? Why are you only working part-time?

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