$0 In Net Worth and I Couldn't be Happier!

Maybe one day :)

I have to start off by saying that many people reading this probably won't realize why this is such a huge milestone to me.  Basically all that I am saying is that my assets outweigh my liabilities (with a caveat that I will discuss later).  While this doesn't sound like the mondo accomplishment I am making it out to be, estimates claim that just under 70% of US adults have less than $1000 saved and 34% have no savings at all.  Currently 14% of US households have a negative net worth meaning that they owe more than they currently have.  This is one of the worst possible situations to find oneself in as it limits opportunity and freedom.  14% may not sound like much, but that's a whole lot of fiscally irresponsible individuals.

Now let's get to some numbers followed by a bit of explanation and some history on why I feel this is a worthwhile accomplishment.

I currently have about $11,500 in cash-like assets.  These include my checking and savings accounts as well as a personal investment account and an IRA (my current employer does not offer a 401K, but I would use that if I could).  My only current liability is my student loan which has a principal balance of $8700 approximately.  This means that my current net worth is somewhere in the ballpark of $2800.  

Now I know what you're thinking.  Who gives a damn about $2800? The reason that I am so jazzed about realizing that I have a positive net worth is that it affords me a sense of security and freedom.  I know now that if shit really hit the proverbial fan and my life went to shambles, I could at least survive for a long enough period to get back on my feet.  Many people are not afforded this luxury and I am extremely grateful that I have been able to get to this point.

There are a couple other things I want to mention about this calculation.  I do currently own a home and I do have a mortgage on that home.  I am not including my home's value nor am I including the mortgage in my calculations because I have no intention of selling my home anytime soon.  Critics would argue that if this is the case, then I should include the mortgage only and not the value of the home, but I do not agree because I know that in a pinch I would be able to sell my home and at least break even at this point in time.  I was lucky enough to buy a home that has increased in value in the short time I have owned it.

I'm sure there are still many of you out there scratching your heads and wondering why you should care.  Well honestly, you probably shouldn't, but for those who do I want you to know that if someone like me who is just over two years out of college, working a job with a below average salary, and who just came back from a two-week vacation in Europe can achieve a positive net worth, then nearly anyone can do it.

So how did I do it?

It is honestly quite simple.  There are really only two ways to increase your net worth.  Either you reduce spending, or you increase income.  It's as simple as that.

I was blessed to grow up in an environment that fostered frugality.  My mom is very fiscally responsible and luckily for me, that fiscal responsibility rubbed off on me.  I follow a few personal finance/early retirement blogs and my two favorites have vastly different philosophies that when used in tandem can prove quite useful.  

First is Ramit Sethi's "I Will Teach You To Be Rich" blog which is all about seeking out "big wins."  These big wins include reducing expenses drastically by finding out the aspects of life that are costing the most and providing the least utility or happiness.  For me, this was things like getting rid of cable and finding new insurance.  I am an avid reader so when I see a book I want to read, I buy it.  I don't care (to an extent) what the cost is because I truly believe that I will learn something that will return more than the price of the book in the future.  What this means is that I needed to reduce my spending in other areas of life.  I immediately stopped my cable service and purchased an antenna for my TV.  My quality of life has certainly not gone down and if anything I would argue it has increased.  The $40-$50 I saved by getting rid of my cable has allowed me to save money and have the extra cash for when a book I want catches my eye.

On the other hand, we have the Mr. Money Mustache blog.  The MMM blog is all about dramatically slashing all spending in order to pursue financial independence, or the ability to no longer be required to work for a living.  I have taken many of the principals of the MMM blog to heart and now ride my bike to work often and do many more of my own home repairs that I used to hire out.  

On the other end of the spectrum, we have increasing income.  This is the aspect of my life that I am still working on.  Reducing my spending was actually easier and has proved to be both more effective and more stable.  Steemit is likely going to play a pivotal role in this aspect of my journey to financial freedom, but I have yet to withdraw anything from my Steemit account and therefore have not taken it into account in my net worth calculations.  I'm also searching for a higher paying job and have recently found someone to rent out my spare bedroom to (this could be considered either increased income or reduced spending depending on how you look at it).

All of this adds up to being on track to achieve financial freedom and independence earlier than 65 years old.  I am extremely passionate about moving toward being able to not being required to work for a living and achieving a positive net worth is the first step in that journey.  I hope to use this post as a jumping off point for moving into the specifics of financial independence and early retirement.

Just remember that if an average Joe like me can do it, so can you!

See! Very Average!

Pic Credit:

https://static01.nyt.com/images/2016/10/21/nytnow/21adult-money/21adult-money-master768.jpg

https://www.listenmoneymatters.com/wp-content/uploads/2014/09/mr-money-mustache.png

https://lewishowes.com/wp-content/uploads/2014/07/75-The-School-of-Greatness-Ramit-Sethi1.jpg

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