Confession Time.
Confession time. I'll be the first to admit that I have fallen off the financial wagon. If you've read any of my earlier posts, you know just a few years ago, I managed to get out of debt, invest a lot and learn some valuable lessons in my early twenties. I never considered myself as a blogger just an ordinary guy with a wife and daughter getting out of debt. As my late 20s are closing in and I approach 30, I have ridden back to the top of the debt roller coaster. Let me paint a brief picture of my financial reality. Our sub-prime 10 year interest only mortgage was our biggest mistake. We bought more house than we could afford and hindsight not to carry such a large debt burden. On the naive side I also thought the housing market in my area was still in an upswing and eventually we would sell in 10-20 years for a profit, which still could happen but who knows. We signed the debt note to the tune of $365,000 in 2007. At 26 and 27, we were living large and making bad financial choices. 2 years later we have amassed all kinds of debt. 3 credit cards that were just for emergencies are at a total of $45,000. I have taken a 2nd mortgage out on our rental home for $75,000 and now have little or no equity in either home we own. Also we dumped all our retirement accounts except one at her job which has about $2k.
Now let me get something straight too. Last year I quit my stressful job and went into a business partnership. The 75K equity was used towards the business and I also gained an additional partnership debt of 100k that I have about 3 1/2 years left to pay on.
Ok so that's my family finances in a nutshell. Right now we have personally about -50k net worth. We have the game plan in place because our take home is roughly 9-10k. Restarting the journey in 2010 will be a challenge but it isn't something we haven't conquered before. I'm going to dive in depth of each of our debts and elaborate in the next blog posts. Buckle up because its going to be a bumpy lifestyle change ahead.
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