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We’re a few days into 2014, so now is a good time to revisit my financial progress in 2013. While this blog is new, I’ve been focused on personal finance and sharing tips and tricks with friends and family for many years.
What did I do the same this year?
I continued to pay off my credit cards in full each month, except when I took advantage of zero-interest promotions from places like Home Depot and Lowe’s. Beyond that, I continued to pay down mortgage, student loan, and auto loan debt according to schedule. I am in no hurry to pay off my mortgages or auto loans because they are at really low interest rates – 3.25%-3.75% for my 3 mortgages and 0%-1.9% for my 2 auto loans. I’d rather contribute to my investment accounts!
What did I do differently this year?
First off, in January, I refinanced my house from 4.25% to 3.25%; both were 30-year fixed loans. I hated the prospect of extending my loan, but I’ve only been in the house 3 years at that point, so the benefits of lowering my rate 1% more than offset the extended payments.
In May, we had solar panels installed on our roof. We paid out $12,000 for a 20-year prepaid lease rather than paying about $100/mo for the next 20 years. We’re already seeing huge benefits from this move. We’re saving about $80 a month net, assuming we were paying the $100/mo that a normal lease would have been.
This savings was higher in the summer, but the winter months haven’t been generating as much electricity as I would have hoped, even though the CA weather has been good to us. This is most likely due to shorter days and cooler temps. For example, even though we used the same KwH in December as we did in August, because the solar panels didn’t generate as much power, our bill was $65 higher.
Throughout the year, I paid off various Home Depot and Lowe’s 0% offers that we used to fix up our house. There’s still a few more remaining, but those will be paid off in 2014.
What were the results for 2013?
Fortunately, this year’s results were boosted by a strong performance in the stock market and in local real estate.
My net worth increased 62% based upon my assets increasing 24% and my debts decreasing 2%. My bank balances increased 40%, 529 plan balances increased 56%, investment accounts increased 29%, and real estate values increased 26%. Solid wins across the board!!!
Additionally, I’ve been able to earn well over 700,000 airline miles and hotel points through credit card applications, promotions, and putting as much as possible on my credit cards. All-in-all, I got 12 new credit cards, refinanced my house, and opened a HELOC this year… and my credit scores are still in the mid-700s. Applying for credit in an intelligent manner results in huge benefits for our family!!!
I’m still reconciling how many points I’ve earned, but it is at least 700,000. Earning all these miles and points allowed me to take my family and mother-in-law to Paris in April, among many other trips, for a fraction of what it would cost if you paid cash.
Student loans, auto loans, and rental property loans all showed decreases, but my primary mortgage is approximately flat because the fees related to the refinance in January 2013 were rolled into the loan. Even after rolling the fees and costs into the loan, my principle and interest payment declined 8.5% with the refinance!
What will happen in 2014?
Not much is planned out of the ordinary with the basics — savings, retirement, and debt. I’m going to continue building my 401(k) with my contributions, employer match, and profit sharing. Student loans, auto loans, and mortgages will continue to be paid on schedule… with a small acceleration of $100 extra per month towards student loans since I cannot deduct that interest.
All of our Home Depot and Lowe’s 0% interest periods expire this year, so those will be paid off and the payments will now be redirected towards savings and increased 401(k) contributions.
My wife will finish Grad School this summer, so we’ll celebrate with a party and a nice family trip to Orlando with some friends. She took out some low-interest student loans, so we’ll look at consolidating those and determine what repayment plan we want to take advantage of.
We’ll do some other traveling this year using airline miles, hotel points, and our timeshares, including the trip to Cabo we just returned from and the Germany/Amsterdam/Paris trip I’m getting ready for. We’ll return to Sydney, with a quick stop to Seoul along the way. We’ll find some games to travel to, including checking out the new Levi Stadium, since Candlestick Park just had it’s final regular season game.
I’m still researching buying another property or two. I passed on the 8-unit apartment complex that was presented to me by a broker because of too much risk, and I didn’t like the financial information provided. Instead, I’ll focus on finding another single-family residence because I think that the tenants will take better care of it since a person’s home is more of a reflection on them than an apartment is.
Things are moving in the right direction, and we’re happy with the progress we made this year. I will continue to add resources and build out this site so that it is a valuable resource in our — yours and mine — path towards financial independence.
Please share your results with me, and let me know if there’s anything I can do to help you reach your goals!
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