Woohoo 7 figures! We sort of blasted past through this financial milestone though and are halfway to the $2m mark now. It’s been a very busy past few months. So much so that I completely missed my monthly check in for Aug 2020!
There were two main events that occured in the last two months:
1. I quit my day job to allow me to focus 100% on my own business.
2. My missus and I purchased our first home together.
So although this increase in NW over half a million dollars in two months seems enormous, it is partly in fact due to combining finances with my missus. She put up a huge lump sum of her life savings for our house deposit and into our offset account. That being said, my business also had some very profitable months lately in Aug and Sep.
First home purchased
We bought our first home in Aug 2020 and moved in after a 30 day settlement. Inspections and auctions during COVID lockdown in Melbourne were a little strange, but we found that the slightly more quiet market worked to our advantage in negotiations. We were able to buy a two year old freestanding house, with 400 sqm land (small but decent backyard) in the Melbourne SE suburbs for a bit over $1m. After renting tiny apartments and units for the past five years, I gotta say that finally owning our own home feels amazing. Once Stage 4 lockdown ends, we can actually go out and buy some nice quality furniture now instead of just second hand “temporary” stuff off Gumtree. I can finally wall mount my TV (something I’ve always wanted to do for ages).
I’m still tossing up whether the equity in your PPoR should be considered part of your Net Worth figure. On one hand, your PPoR is not an investment so it doesn’t make sense to count it – especially so for FIRE purposes. But on the other hand, if you don’t count it, someone could be worth $1.5m (with $1 million cash) in one month, then after buying a $1m property they’re only worth $500k in the next month? That doesn’t seem to make much sense either.
For now I will just count the PPoR equity as part of my overall NW figure, but I acknowledge it obviously isn’t an investment, nor does it generate any income for FIRE purposes.
Going full time with my own business
I quit my full time day job in September after almost three years. It was an interesting project with a good work life balance (very 9-5) and it paid quite well (contract rates of $900/day). However my own business has grown like crazy in 2020, so it simply didn’t make sense to dedicate 40 hours of my life each week to a corporate day job when I could make so much more by investing that time into my business instead.
I’m also loving the flexibility and freedom that comes with being your own boss. I can now wake up whenever I want, go for a run and exercise in the morning and then start my work day when I feel like it. I’m not lazing around though. I estimate I still work about 60 – 80 hours per week, which is probably too much work to be healthy. I do need to scale it back and take some personal time off. But I figure I might as well work hard and make as much as I can while we’re in Stage 4 lockdown anyway.
Anyway here are the usual monthly graphs. Stay safe out there.