Savvy Budget

Am I over valued?

While crunching the numbers I discovered something interesting. My Networth is hyper-inflated.

BEAR WITH ME....

I was adding and subtracting debts and assets. I was trying to inspire myself by looking at where I could be sitting in 9 months and 16 days.

I took my net worth of $22, 414 subtracted the value of the house when it sells ( I doubt I will actually clear anything on the actual sale. The house is already priced lower than what I paid for it in 1998. There will be closing cost, lawyers fees, additional repairs, sprucing up, advertising, gas out to the house for showings, etc),

added the value of my mortgage because it will cease to be a liability.

subtracted the value of the stupid debt account, ( it will be spent to erase the debt)

added the amount of my stupid debt because currently it is a minus { liability} ( in effect SD account and SD cancelling each other)

added the value of my cc debt ( it is will cease to be a liabilty),

took into account the expected value of my cars at the goal date- no car payments in the last two years :). ( I currently subtract $25 each month from the value of both cars- I have mixed feelings on this, because if I were desperate, I would sell only one of them at most),

I then realized my retirement account is still in limbo because there is a strange developement there ( old job converted the money I could have rolled over to situation where I think I have to wait until I retire to see anything and it may now possibly be out of my control) which may simply mean that this money is pretty much history to me by the time they finish with it.::::sigh::::: This asset is actually pretty much a wash.

I estimated how much I should have in my cash account and in my EFs and discovered in effect that I will really and truly only be worth about $5k. That stinks. That royally stinks.

The whole idea was to make me feel better. I started to get very down. Of course, looking down is not the best way to move up. I automaticly started looking for the positive. I was grateful that I was not going to be in the hole. I will have a small but simple foundation on which to begin my building wealth. I will also be able to move the income that was paying off my liabilities into lager long term EF, savings and investments.

It further opened my eyes to the effect CCs can have on your future.It was so easy to put snacks, gifts , eating out when I could have eaten cheaper and other everyday expenses on the card and use the cash for other things. You can bet that that sucker will be sitting in my freezer. You can also bet I am further resolved to work harder toward having a real net worth.

It opened my eyes to the pitfalls of procrastinating. I totally admit it- I have just let the house sit in the three years since I moved out. I have made very little effort to empty and aggressively sell the house. Every month I do not focus on selling my house, I lose at least $100 to interest on the loan.

I have no excuse. My initial reason to procrastinate was that deep down I wanted to move back in the home. I was comforted by the fact that I was a homeowner. I was paying rent elsewhere but I was still a homeowner.

What I really was, was a shmuck. My next goal needs to be spending every possible minute outside of work and essential endeavors to prepping and selling this house. Next to my job, this is my new major focus.

All I can say is my gut is in knots right now. I have been deluding myself. I am suppossed to be "so smart" and here I have been swimming with rocks in my pockets. I am tentively setting my 2007 goal at having a real net worth of $10K. From what I can tell my arrow will actually take a dip as I liquidate some assets and retire old liabilities.

I am trying to stay positive by reminding myself that this revelation is a good thing. I know some of the problems. That allows me to search for and put into effect some answers. When I hit Zero Debt, I should start picking up some momentum toward actual wealth.

I am already focusing on generating more income while minimizing expenses. I need to step up the retaining of my income while watching my expenses even more. I am getting better at entering ALL of my expenses daily. This building wealth stuff can be hard.

posted by Casper @ 5:23 AM