Andy Hough

April 2017 Net Worth Update

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penniesIn order to keep track of my financial progress or lack of progress I have decided to calculate my net worth a few times a year.

My net worth as of 04/2/2017 is as follows.

Assets
Cash – $9995
IRA – $25,679
Roth IRA – $11,035
Solo 401k – $1078
Car/Stuff – $3800

Liabilities
Student Loan – $122,490
Credit Card – $9000

Net Worth = $-79,903

My net worth improved by almost $1000 last month. I’m okay with that increase. It is nice to see a 7 instead of an 8 at the beginning of my net worth. It makes it seem like I’m at least making progress. At that rate my net worth would get to $0 in 80 months. I hope I can do it faster than that. I decreased my liabilities by almost $3000, but my investments declined a bit leaving me with just a $1000 improvement in net worth for the month.  I hope I’ll do better this month. I’ll continue to aggressively pay down my student loan. If my investments at least hold steady it should be a good month.

I’ve been using Personal Capital (affiliate link) to help track my net worth. It keeps track of all of my financial accounts and my student loan making it pretty easy to calculate my net worth each month. It is free to sign up. If you would like to sign up I’d appreciate you using my link. All blog income, including affiliate income, goes to paying down my student loan.

Personal Capital

March Income – $4113.49

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Here is a breakdown of my income for March.

Qapital $15
Interest $5.82
Bank Bonus $93
Amazon FBA $45.80
Cash Back $32.36
Job $3921.51
Total $4113.49

March’s income was really good. That was mainly (okay, entirely) the result of having three paydays in March. It was a good thing I made a lot at my job because my alternative sources of income produced very little in March.  I didn’t make any online income. My Amazon income was tiny due to not having a lot of stock and selling some of the remaining slow-moving products at a loss.  Although I’d like to see my alternative sources of income do better, I am mainly focused on my job right now. Since it produces a better and guaranteed return on my investment of time it makes sense to concentrate my energy there. Once I start my sabbatical at the end of this month I’ll work on producing more income from my alternative sources of income.  To pay off my student loan as quickly as I’d like I need to make a lot of money from my job and from my alternative sources of income.

If any of you have suggestions on how to make money on the side I’d love to hear them.

March Expenses – $1547.53

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Here is a breakdown of my expenses for March.

Household $451.08
Entertainment $18
Transportation $261.57
Food $130.54
Travel $471.81
Phone $24.60
Health $189.93
Total $1547.53

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March was an okay month for expenses. I paid for six months of car insurance which raised my transportation expenses. I also had a lot of travel expenses. Some of that was for my upcoming Europe trip, but most of it will be used for a future, not yet planned trip.  I think I’ll get a lot of value for the money spent. Since I’m supposed to be concentrating on my paying my student loans I shouldn’t be spending so much on travel.  The trip to Europe might be a once in a lifetime trip and I’ll be getting a lot of travel for the money spent so I don’t feel too bad about it.

I’ve decided to list my student loan expense separately since it will throw off my monthly numbers. In March I paid $10,077.96 towards my student loan. Of that amount $7000 of that total was from a credit card balance transfer which will have to be paid back over the next year. That leaves $3077.96 that I paid in cash for the month. I consider that great progress on paying my student loan. I won’t be able to keep up that rate for long.

I have to get my car inspected this month and I plan to have some other work done on it while it is in the shop so I’ll probably have a high transportation expense this month.  I don’t think I’ll spend much on travel this month so that category should go down quite a bit. Everything else will probably stay about the same.

How was your month?

Pay Student Loan with Credit Card – Plastiq Referral Bonus

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It sucks to send money to pay my student loan knowing that all I will get for it is a little less debt. One of the ways I try to get a tiny bit back for paying my student loan is to pay my student loan with my credit card. This allows me to earn credit card rewards and/or meet the spending requirements for a credit card sign-up bonus.

It is no longer possible to pay my student loan directly with a credit card.  It is possible to pay my student loan indirectly using a service called Plastiq. Through their website I can make payments on my student loan using my credit card. The drawback is that there is a 2.5% fee for using a credit card which makes using the service a poor deal for me in most circumstances. Fortunately, they have promos that allow you to earn fee-free dollars. I signed up for a referral promo earlier this month and earned 400 fee-free dollars. That allowed me to make $400 of payments to my student loan without paying a fee.

This promo is still going on and now that I’m a member I can refer members as well. If you sign up through my referral link I will earn 800 fee-free dollars and you will earn 400 fee-free dollars after making your first payment of at least $20 between March 14, 2017, 12:00 a.m. EDT and April 18, 2017, 11:59 p.m. EDT.

Note that after you sign up that it will only say you have $200 fee-free dollars, but after you make the payment of $20 or more it will change to saying you have $400 fee-free dollars. It can take a day or so after you make your payment for the fee-free dollar amount to change.

I’ve made three payments using Plastiq so far and the process went smoothly.  The payments did take about ten days to post which is a little slow, but I can live with it.  If you have any questions please ask. I hope you will use my referral link so I can make some more fee-free payments to my student loan.

132 Plan to Pay Off Student Loan

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student loan debt I have started on a new plan to pay off my student loan. Some of you may recall that I had a plan a couple of years ago to pay off my student loan. That plan started off strong. I got my student loan debt down to $122,000 from $138,000.  After that the plan fizzled out and my student loan debt climbed back up to a total of $132,000 earlier this month. It is depressing to see $10,000 get eaten up by interest. That money basically went up in smoke. Having a student loan accruing about $600 in interest every month really sucks.

That is why I’ve started on a new plan to pay off my student loan. My previous student loan payoff plan fizzled out due to a lack of income. This plan will be different because I now have a steady source of income. I might be counting my chickens before they hatch, but my seasonal job has offered me a long-term position. I should be signing the paperwork to make it official today. With this steady source of income I’ll be able to consistently make payments on my student loan.

Even with the new job the task of paying off $132,000 in student loan debt can seem overwhelming.  I’ve come up with my 132 plan to make the task seem a little less overwhelming. Rather than thinking of the humongous $132,000 of debt I have to pay off, I’m thinking of the debt as 132 $1000 payments. This amounts to the same thing, but it seems more achievable.

With the income from my current job I should be able to make 1.5 payments a month.  At that rate it would take me about 7 1/2 years to make 132 payments.  With interest my loan wouldn’t be paid off with 132 payments over 7.5 years. With interest included it would take a little over 10 years of payments to pay off my loan. However, I plan to make a big payment sometime this year and hopefully refinance the loan next year so the 7.5 years could be a reasonable estimate of how long it will take me to pay off the loan.

Even though I like my current job okay, it would be extremely difficult for me to stay there 7.5 years. In order to shorten the payback time frame I plan to make extra money in addition to my job income. Last year, I made about $10,000 from FBA and another $1000 from my blog. That would be an extra 11 payments a year which would help pay off the loan quite a bit faster. If I could figure out a way to make 10x as much money from FBA I could have the loan paid off in a couple of years. Of course, that is easier said then done.  The reality is that I’m making much less from FBA now that I’m working.  To start making significantly more from FBA in the reduced time I have available I need to start selling wholesale and/or private label products. I’m making it a goal to do at least one of those this year. I will keep you updated on those plans as they develop.

It would also be nice if I could start making more money from this blog. In my best year I made about $20,000 from this blog and some other blogs I own. It isn’t likely I will ever get my blog income back up to $20,000, but I do believe I can do a lot better than I am now. I need to start blogging more consistently and producing better posts to get more readers. And I need to start trying to make money from my blogging. I’ve been pretty lazy about optimizing my blog for display ads and affiliate income. If I could just get 26,4000 people to sign up for Qapital with my referral link I could have my debt paid off. Okay, maybe that is a bit of a longshot. I’d only need 1320 people to sign up for Personal Capital to get my student loan paid.  Okay, that isn’t realistic either, but I could make enough from these to make a couple extra payments a year.

For now, I’ll be concentrating on making money from my job. During the tax season overtime is available. If I were to work all of the available overtime I should be able to make an extra payment a month. Once I no longer have the option of working overtime I’ll concentrate more on ways to make money beside the job.

Although I will be happy when I finally have this debt paid off, it is also depressing to think that after paying all of this money I’ll just be at zero. There are some minor fringe benefits that go along with paying off the debt. I get a tax credit for $2500 of the student loan interest paid each year. Another plan I have to get some extra benefit from paying my student loan is to use the student loan payments to help meet minimum spend requirements on credit cards for signup bonus purposes. I should be able to cycle through 3 or 4 credit card bonuses each year. Also, while I’m paying off my student loan I should have my highest ever income years which will help increase my social security benefit a little bit. I’ll need it since I won’t be saving any money for retirement while I’m paying off the student loan. I’m sure there are some more positives to paying off the loan than I’m thinking of right now.

The 132 plan is off to a good start. I’m already down to 130 payments since the start of this month and I’ll make one more payment before the end of the month. Although, I’ve broken the debt down into 132 payments of $1000 I will also be sending in smaller payments between paydays to help decrease the debt a little faster. Every little bit will help.

If you have any suggestions on ways I can pay my student loan off faster I would love to hear them.