I had to prepare a personal financial statement again for the bank that holds the loan on the commercial building that I own with a partner. Actually the bank owns it, and we are simply making payments to eventually acquire full ownership. I am not sure why they are wanting the information so soon since I completed this exercise at the end of May. Although I suppose it could have actually been for a different bank at the time since I have had several requests for the information from various banks for various reasons.
This is the only time that I bother to go through this exercise since it takes a few hours to get all the information together. That is time that I would rather be spending doing something else. But the good news is that from May 28, 2012 to September 2, 2012, my net worth increased by 18.5%. I was really rather shocked since it had only been a little over three months. The previous increase had been 28% over 6 months which I thought might have been an anomaly so I was only expecting maybe 6% at best.
Looking At the Numbers
When I look at the numbers, I realize that the increase in net worth has come from two primary reasons.
First, my total retirement account assets have increased. I have continued to save the maximum even though cash flow can be tight at times. I have always believed in paying myself first even though I have trouble doing that with net income at this point. I also receive a match so there is no way I would be passing up free money.
Second, I have been contributing more to the commercial loan than my partner so I now own a greater percentage of the commercial building and have been benefiting from the decreased mortgage balance on that and a few rental properties. I now have more equity in the real estate than I did in May so each payment that is made will simply continue to increase my net worth.
While it is nice to see net worth increasing, it does little to help the monthly cash flow and will not pay off any major debts that are coming due. Unfortunately, I will have to make some tough choices in the months ahead. I suspect that things will be getting better, but it may take to the end of 2013 before I see some major results.
At least it is good to see things headed in the right direction. I have a plan and a suspicion that the plan may just work.
I only update my net worth when I have to send the annual personal financial statement to the bank to comply with the requirements for a loan my partner and I have on a commercial building. However, now that I hope to approach my Mom in order to solicit help in the form of a loan for using for a back tax debt, I figured I should go ahead and get the numbers together along with my budget so that I could demonstrate my ability to pay it off.
The last time I filled out the statement was in mid-July when I had a certain positive net worth. It is more than my tax liability, but the problem is that the vast majority is held in real estate and retirement accounts that I can’t readily access. Unfortunately, I did too good a job of paying myself first, but it was at the expense of current cash flow. Obviously, I will have to learn from this mistake.
I was pleasantly surprised to find that in the previous six months, my net worth had increased just over 28%! It was a combination of increased balances in the retirement accounts and decreased debt.
Needless to say, I was quite happy. It is about time that I got a little good news. It has been a somewhat difficult month, although I am incredibly thankful for my overall position in life. The problems that I am dealing with are quite minor in comparison to what could be going on, so I am not going to complain too loudly.
Prosper Loan and Mom
I sent in the requested documentation for the Prosper loan which I am hoping will be funded to take care of some of my tax debt. I am so thankful for those who have already contributed. So far, the loan is 9% funded. Here is the link to my loan. The listing expires in a little over 10 days. I am somewhat concerned that it won’t get funded, but maybe activity will pick up again once all the documentation gives me a level 3 verification. When it is all said and done, I will be able to write a post on the experience so I am looking forward to that.
I also sent an email to my Mom a few minutes ago. I figure that I will get a preliminary reply tomorrow sometime. It was very difficult to swallow my pride and ask for help. I am very independent and have been since I was a teenager. I am sure that I will continue to be independent, but I am hoping to recognize those situations where it might benefit me to ask for assistance. Maybe that is a sign of increasing maturity? Who knows? It was difficult to write and send, but it is done. Now I will wait.
I hope that the next several weeks of posts won’t be dominated by tax discussions, but it is a matter that is front and center right now given my current situation and the time of the year. I trust that most of you will be having less angst when it comes to the IRS, but feel free to write a comment or two.
Also, if you like the blog, feel free to subscribe to my RSS feed and share your favorite posts on Facebook, Twitter, or other social networks.