An Updated Snapshot of our Household Debt

Here's a better breakdown of our debt than I typically report in our monthly net worth report. In the past 12 months our debt has improved significantly as we sold my wife' townhouse and focused the majority of our free cash flow on our variable debt pay down.

Loan Description House Current Balance Matures
1 5.6% 30yr fixed House #1 $ 108,854 Aug-31
2 HELOC @ 3.25% var. House #1 $ 21,500 Aug-23
3 IELOC @ 4.25% var. House #2 $ 10,384 Jul-29
4 4.875% 30 yr fixed House #4 $ 236,858 Jan-39
Total $ 377,596

When we decided to stretch a bit to buy our house (#4) in Dec 2008 we planned to focus during the short term on reducing our debt to a level closer to where we were before we bought our home. Given our current 1 income household and lack of visibility at my employer I continue to feel a strong desire to reduce our debt level to a more comfortable level than where it is today.

At this point I'd feel more comfortable if our debt totaled around $250k. That would still put us with debt totaling more than 2x our annual income and keep us with some leverage on our balance sheet. However, with long term debt at (tax deductible) rates of 4.8% & 5.6% we really don't want to pay off more of the debt than we need to to feel comfortable because I believe we can earn higher rates of return elsewhere.

Related in Rental Property:

2012 Passive Income: Rental Property (Feb 10, 2013) Its been several years since I did a thorough analysis of our rental property performance and investment return. Here is an analysis of our 3 rental properties for 2012 that should give a pretty reasonable view of how these investments...

Why Invest in Rental Property (Mar 13, 2012) The real estate investing infomercials of the housing boom suggest that real estate could make you rich - the benefit of real estate being exponential returns of your investment. While I only have a few small real estate investments there...

Rental Property Investment Breakdown (Sep 27, 2011) Here is some overdue financial record keeping from our latest rental investment in August 2011. This breaks down all our out of pocket costs to purchase the property and get the 1st tenant in place. Out of Pocket Investment in...

Comments (2)


Hi 2 mil - may I ask is this all your debt? No other debt? Also may I ask please what your monthly debt for eating out is?
When you save 10 or 15% to savings is that each or household? Thank you for your time and love the blog

Rick,
You can see all liabilities on our monthly net worth report - we pay off our credit cards every month so this is the only other debt we carry.

As for savings - all percentages are based on household income.

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,938,393

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