Net Worth Challenge

After two months of cleaning, repairing, and painting, our hard work will begin to pay off. As of tomorrow, our new rental property is rented and will be bringing in some much welcome cash flow each month. Our new tenant signed the paperwork tonight and will receive the keys to the rental property tomorrow morning. Now, onto the our next property.

Back in January I wrote about several financial goals that my wife and I have going into 2007. There is another goal I have, although unwritten, that I am personally trying to work towards this year.

• I would like to spend less time each week working on my finances.

Now this doesn’t mean I want to get away from the blog and talk less about my financial situation — quite the opposite, in fact. I simply want to spend less time managing the day-to-day and week-to-week activities and find ways to automate my system to free up my time for additional activities — including writing more posts on my blog.

As of lately, it has been a daily routine for me to look at my planning spreadsheets, Microsoft Money account balances, and check stock/mutual fund quotes. The addition of our new rental property in March has meant additional bills to pay; all with varying due dates. I’m not one to be lax with my payments, so I have been working on my finances to some degree each and every day to make sure I do not accidentally skip a payment or forget an upcoming payment due date. The complexity comes in because I try and manage the balance in our checking account to be as minimal as possible. If we have extra money sitting around, it gets sent to our money market account to earn interest. Then when a payment is due, I transfer money back into the checking account and authorize (either electronic or over the phone) a payment to be made.

My planning spreadsheet helps out tremendously because I track when income is supposed to arrive (ie, paychecks for my wife and I) and when expenses are going to be due (ie, regular monthly mortgage, credit card, utilities payments, etc). I am able to keep the checking account balance at a minimum and the money market account balance at a maximum. This is all great and dandy, but it’s starting to take up more and more of my time.

To combat this situation, I am going to begin automating several tasks as best as possible. I have already taken steps to do this for some items; mainly our student loan payments. My next step is to automate all the mortgage payments (our house and our rental property) and find ways to automate my deposits into our money market account. There are several deposits that are equal from month to month — might as well make it as easy as possible. As I make improvements to my overall financial system, I’ll try and keep you updated. Wish me luck!

I thought our February 2007 Net Worth Update was bad, but I should have held back my disappointment until this month. We still squeezed out a positive gain of $1,490.03 — but it was a paltry gain of only 0.99%. I knew that March was going to be difficult because the closing for our new rental property took place at the beginning of the month. Additionally, my wife and I had to purchase numerous supplies in order to “rehab” the property and bring it back to a good, clean living condition. Our efforts should pay off as I expect to begin renting the property before May 1st.

Aside from the rental, there was not much else interesting for us during the month. It has been a lot of work to get the property ready — and I honestly will admit that I’m wondering if I’m better off in the rental business or better off putting the money into the stock market. Many of my recent (within the last two years) investments are up 20%+ since purchasing them. If I can keep that record up, the real estate market and rental business (includes all the work involved in maintaining a property), may not be the place for my money — or my time and effort. That may make for an interesting discussion in the future. I just wanted to admit that the thought had crossed my mind.