Welcome to another financial freedom update! We’re a little late to the October update because, I’m sure like many of you, we were eagerly awaiting the results of the election. Thankfully, the wait is over. We are so thrilled about President Elect Joe Biden and the first ever WOC Vice President, Kamala Harris! It’s been such a hopeful, celebratory time and we are soaking in this historical moment.
Apart from the anticipation leading into the election, the big update from October is our bathroom renovation (yay, long time coming and we are so close!). In addition to that, we’re really starting to look ahead at our 3-5 year vision.
Why You Should Build Wealth
If you’re new to the OBHL fam, you might be wondering why you should track your net worth. We’ve narrowed it down to a few key reasons:
- To track your overall financial progress even when there’s a market downturn.
- To watch the trajectory of your net worth overtime to make sure you are headed in the right direction of your financial goals (for us, that’s creating a multi-million dollar nest egg when we retire).
- To stop the harmful hyperfocus on debt that stops so many people from building wealth. You can absolutely build wealth while paying down debt at your own pace.
Let’s dive into October’s update! *although we’re posting this mid-November, these numbers only reflect October.*
October was a big month for us. We threw in an extra slide here to give a visual representation of just how far we’ve come in terms of net worth.
In October of 2017 our net worth was $-128,500. This last October 2020, we’ve crossed the $300,000 mark, which is $60,000 more than we projected to hit back in 2017. And we didn’t do this by pinching pennies or depriving ourselves of splurging when we wanted to. We hit this milestone because we had a plan in place, a plan that involved taking on debt confidently without fear that it would completely ruin our ultimate vision of financial freedom.
You Can Build Wealth Even If You're Not Debt Free
Debt should not deter you from taking control of your finances. It’s a misconception I hear thrown around all. the. time! You don’t have to wait until debt is paid off to start building wealth. You can make sound money decisions and make extremely great financial progress while paying off debt.
Think of it, too, in terms of investing in an asset and not “going into debt.” It’s far better for your net worth to increase due to an increase in assets than for it to increase because you decreased debts. When your assets increase, you have more working for you to help you reach financial independence.
We also get asked why we don’t just pay off some of our smaller debts at this point, like our 401K . Well, the answer is, while we have the money to pay it off right now, we’re choosing to pay it down slowly.
Building Wealth At Your Own Pace
One of the things we teach inside of Wealth Builder’s Society is how to create a financial plan that both aligns with your vision for your life and helps you build wealth. So slowly paying down certain debts like our 401K, Alexis’s car, the mortgage, is a choice that serves our bigger, overarching financial strategy.
We’re not uncomfortable with these debt numbers.
We know we’re on track to hit our goal of having an 8-figure nest egg. Debts don’t stand in the way of us reaching that goal, and a huge part of how we know that is because of using a tool like our Net-Worth tracker for so many years.
Consistent Investing Vs. “Timing The Market”
Another thing we hear often, especially in a year like we’ve had, is concern about investing during market downturns. Fluctuation in the stock market is natural and should not scare you away from investing when it dips. Try to have the mindset of consistently investing over time rather than trying to “time it right.” Slow and steady wins the wealth-building race when it comes to investing in the stock market.
Your net worth Net worth is only one small piece of your overall financial picture.
The reason we do it is the same reason we take our body’s temperature; the temperature gives you an idea of what’s going on, but it doesn’t tell you everything you need to know about your body. Your doctor will still have to do the whole physical.
We’d love to hear about your net worth tracking in the comments below, so let us know your questions or comments!