catching on fire

a mid-twenties tech accountant living on a sailboat in san francisco. saving up money to retire early and sail away. sharing these insights into my financial life to track my growth and help others see what's possible.

[catchingonfire-blog1]

Q1'2018 STATUS UPDATE

INCOME

Gross: $93,500 (+ equity) - me Gross: $65,000 - partner

Net monthly, after deductions: $8,900

DEBT

Balance of boat mortgage: $126,821.85, 5.25% APR (purchased for $146,000.00 in January 2017)

Student loans: $68,250.93, mixed APR, average ~5.5%, paying minimum payments of $580.57 monthly 

Sales tax payment plan: $12,651.99, paying $300 weekly

Auto loan: $11,324.52, 8.99% APR

Chase credit card: $7,748.86, 23.74% APR

Lending Club: $392.30, 12.99% APR

AMEX credit card: $284.67, 29.99% APR

Barclaycard credit card: $253.72, 22.99% APR

TOTAL DEBT:  $227,728.84

INVESTMENTS AND CASH BALANCES

Cash: $3,691.43

Roth 401k balance: $9,237.27 (5.5% contribution, 2.5% employer match) - me

401k balance: $8,253.17 (5% contribution) - partner

Roth IRA balance: $1,249.67 (not actively contributing)

TOTAL INVESTMENTS AND CASH BALANCE: $22,431.54

EQUITY IN BOAT: $19,178.15

TOTAL ASSETS: $41,609.69

NET WORTH: ($186,119.15)

[catchingonfire-blog1]

crunching the numbers

I track our finances in YNAB. I do a quarterly review in Mint. I have a Personal Capital account as well that I just started. But even with all the tools I use, I found myself asking when I'm going to get out of debt. What will our turnaround point be?

Tonight, I crunched the numbers. I kept it simple - going off of today's balance, and I didn't include interest which would obviously skew things. I wasn't going for scientific precision here - just wanted a ballpark of what year we could expect to be debt free.

We are currently paying minimum payments on our boat, student loans, and car. If we change nothing, the last payment we will make on our debt will be in January of 2031. If I take the same numbers and apply them in the snowball method and get aggressive, the last payment will be in September of 2022. We will pay off the boat first (5.25%), the car off next (8%), and the student loans off last (a mix between 3-6%). The goal with paying off the boat before the car and student loans is because that will allow us to have an asset that we can sell if we decide to do so. Our current plan is to maybe use this boat to upgrade to our next boat (not bigger, just sturdier - more blue-water friendly). If we did this, the goal would be to sell the boat and use the cash to pay off the next boat in full as to not get into another mortgage.

All in all, it feels good to crunch the numbers with a different perspective and to have a better perspective.