My first project for this year was to get rid of all the credit loans and all personal loans that I had. These are the ones that are “eating” my income, and these money are the ones I am literally throwing away out the window each month.
I started my project by creating an excel file, with 4 different columns: monthly income, assets, expenses and liabilities, as you can see in the picture.
The “INCOME” column contains the money that I get from my daily job ( the salary from my PhD), the money that I get from my ex for the kids school and kindergarten (we do 50%-50%), and the children’s allowance (also, 50%-50%). I need to mention probably that I live in Norway, but I translated my salary to USD.
The second column, the “ASSETS” is the one dedicated for my passive income. This is the column that I will focus on after I am done with the “Liabilities” column. I have been blogging for some time now, but not really gotten into a very successful blog, as I never dedicated 100% of my time and my attention to this. My focus has always been on my career, and now, with 2 kids, I cannot afford to just give up my day job and work full time on blogging. But the plan is to slowly grow something for the next year, and by the time I am finished with my Phd in mechanical engineering, I would have enough passive income to “survive” and finally have 100% of my attention it this business.
The third column, the “Expenses” are my daily expenses, that I cannot get rid of them (when you have kids, you need to have insurances, so that is not an option in my opinion to take off the list).
The final column, the “LIABILITIES” it’s the most tricky part. Here are all the loans, credit cards, and car loans that I have. The first step into my financial independence is to get rid of all (or the most) the loans that I have. So, I have started with the credit loan and the personal loan because those 2 had the highest interest rate (20%). After 8 months of savings, I can finally take that off the list. The only loan that I have now is the car loan. And of course, the house, which I am in the process of selling (together with my ex, so that one I did not include in my calculations). The car loan I will still keep it there for a while, as the interest rate is quite low-ish (6%). It is a new electric car (or at least it was back in 2018), Hyundai Ioniq. Unfortunatelly, getting rid of the car is not an option for me because I live 25 km away from the city where I work, and the buss connections are really bad. And on top of that, I live on top of a very steep hill, so I definitely need a car. An electric is the best option in Norway, as it is more economical this way.
As you can probably noticed, I managed to save $11500 in 7 months, but if you pay more attention to the excel file picture, you will notice that the “profit” I have each month is around $400. If we multiply $400 by 7 = $2800, so, where did the rest of the money come from?
Well … I did some savings in the food and other expenses section – maybe $100-$150 extra each month, but I also started to sell the things that I had in the house that I did not make use of it. Surprisingly enough, that was around $500. Then, I had a blog that I sold (it was a blog that I was not motivated to work on any longer, it was not making a lot of money each month). I sold the blog for $2500. After commissions to flippa and escrow, I got $2050 in my bank account. So, I paid my first credit loan (the most expensive), and for the next loan, I could save even more money, because now I had an extra $200 that would go for the second loan. Then, again, in June I sold another blog for $3300, and finally covered the second loan.
Now, my excel file looks like this:
Tat means that now, I can have savings of $700 per month. That is a lot of money that I can put in my passive income business. I could also use the money to cover up the car loan, but I think long term, it will be wiser to use them to grow new blogs.
After my sale of my other blogs, I am left with 3 blogs that I will work on. I will call them Project B1, B2 and B3. The focus for my next year is to increase the income in the “assets” column in such a way that it will become higher than the “expenses”+”liabilities” column. Only in that moment, I can say goodbye to my day job, and not be dependent on the “income” column.
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