I find great joy in having everything laid out in a PFS, a Personal Financial Statement format. This is where I can get a daily update or snapshot of our net worth as a whole and see all account balances in a dashboard-like format.
My wife’s name is on all of the savings accounts and I am listed on the joint checking account that we use on a daily basis for gas, groceries, meals, etc. I gladly gave up having my name on those emergency funds and prudent reserve accounts when I was first getting sober and was allowed back into the house. I had the locks changed by my wife when I hit rock bottom. I had to live in my Tahoe for about 10 days. Part of getting help and going to outpatient treatment was also realizing that something about having access to money and the ability to debt did something to me. I was too far over my head. Something had to change. I had drained our joint saving accounts to fund my business without consulting her, because I knew she would say no, plus the embarrassment and shame that I had of not being able to bring home a paycheck for about 6 months was overwhelming.
Today, looking at our PFS, we have $79,369.11 in Cash on Hand; This is comprised of our personal joint checking of $2018, our travel saving fund of $8000, our 3-6 month prudent reserve of $30,024, a savings account for our daughter of $11,470. My wife’s business checking account has $19,606 (which she likes to keep right around $20,000…which is amazing and admirable). We have $1000 cash reserves in a Wells Fargo Safe Deposit Box, $1000 cash hidden in the house for emergencies and have started a Money Market savings account titled “plane fund” with currently $6,250. Added up, that totals $79,369 in cash. All of these items are listed under Schedule A: Cash in Banks on our PFS with details like Name and Location of Bank, Type of Account, Account Number, Amount and a column for the date the balance was last updated. Some account balances change daily and some don’t change at all.
Schedule B is where we have listed: Accounts, Loans, and Notes Receivable; This is where we are to list everything else that is an asset, but not necessarily in the form of cash. We have a total of $91,186.31 in non-cash accounts; we do not have any money that we have loaned out to others or notes receivable or they would also be listed there too. The $91,186 is made up of my 401K of $4695, our daughter’s 529 Future Scholar college fund of $40,146, Meagan’s Northwestern Mutual IRA of $20,614, some Kemit stock of about $500 that I need to get clarity on and sell one day. I found out that I had purchased these 15 shares of stock 11/24/95…which meant that I was 11 years old. I had forgotten about it. We also started Charles Schwab Roth IRA’s for me that has $12,440, Meagan $12,438, and a custodial Roth IRA Maddie which we just started over the last three weeks that is currently just $350. We have a goal to have her Roth fully funded to $6,000 by the end of the year.
Schedule C in the PFS is Life Insurance. This has been a category that only through the help of getting sober and solvent have I been able to wrap my head around and get cleaned up. Currently we have $900,000 20 year term life insurance with Northwestern Mutual on me and my wife individually, which I have showing on the PFS has annual premium of $556/year for me and $444 per year for Meagan. We have a NWM whole life policy of $50,000 for our daughter that is paid by my dad. It has a cash value of $1,344 currently. He has been contributing to this annually since before she was 1 year old. These life insurance policies feel about right, not too much and not under insured. When I first came into the rooms of recovery, we were “trying to pay” for $2.1 million dollars of life insurance each. That is ridiculous and they weren’t even term policies which means they were stupid expensive. In recovery, I learned that a good rule of thumb is to have 10 times annual income for life insurance. So, that would give the spouse as the benefactor about ten years of breathing room. In our case, if I died, Meagan would be able to pay off Schedule E, our house, and have over $600,000 left to live off of. I feel that since I currently make $72,800 salary and have hopes to get to $90,000 soon, that $900,000 in 20 year term life insurance is perfect. That gives me a few years to get to the $90,000 salary. I can always purchase additional term plans if we feel like we need it. By the time the 20 year term runs out, I’ll by 55 years old and be well on our way to self-insuring, if I can stay sober and solvent, one day at a time.
Schedule D is where we have listed other insurances like the Selective car, home and umbrella policies. We pay $155 per month currently.
Schedule E is for Real Estate: we have listed our home address, the name on the title: me and my wife, the bank and bank loan number, the original cost of the home, the current market value, the monthly payment and how much is left on the loan. We paid $339,000 for the home, it has a current value of about $450,000, with monthly payments of $2,010.16 and a current mortgage balance of $273,392. The equity of our home, which is the value of the home minus the balance on the mortgage equals $176,608. Not too bad considering we have only lived there for about 5 and ½ years.
Schedule G is for “Notes payable to banks, unsecured, and secured”. This is where I list out the Federal and State estimated tax payments that we are to pay though out the upcoming year, as they are ‘notes payable’. So at the end of last year’s tax season and we were given the invoice from Zion and Company, which handles our tax preparations, they give us vouchers and a schedule of what federal and state estimates taxes are to be paid for the following year. These are to be paid, for example this year, 4/15/21, 6/15/21, 9/15/21, and 1/18/22. I didn’t have a system in place to keep these amounts and dates straight, so I made the top right hand side of our PFT, where the liabilities are all listed out, I put them there. You can see that Meagan paid 9/1/21 the estimated taxes to Federal for $4,600 and State for $260. Those were due on 9/15/21, but she has always been good about paying early, unlike me. I was trained from a young age to hold onto cash. Let that cash work for you instead of giving it to the government. Hold out till the last minute, but often times I would be late or have spent that money on something else, compulsively, and when I came time to pay that estimated tax bill, the money wouldn’t be there. She is much better at paying these kind of bills, so we let her do that. We also have listed the Wells Fargo PPP Loan that my wife received, it’s account ID number and the loan balance of $20,832. I do not have this factored into our liabilities formula because we are fully anticipating it to be forgiven 100% and have the date on our calendar to submit that forgiveness application paperwork.
Schedule H: is for Notes Payable to Others, Unsecured and Secured Debt; this is where I have currently listed my debts that from 5 or so years ago from when I had the solar business. A big part of what I think I need to share about is that idea that when I came into recovery, the debt was overwhelming and had stacked up. April 25, 2019, is the date on our Networth Over Time chart where I made a big decision. I decided that the business had closed and I was broke. There was no possible way any time soon to pay down these debts. I let some of them know, like Randy Rowe who was a project manager of mine during the solar business who would show up at my house on a random Sunday asking how I was doing but really just sticking out his hand asking for his $830. I didn’t have it. I had just taken a sober job working for a forensic engineering firm doing business development. That was the date that I said I have to mentally put all of that debt aside. It is dead debt. I knew that I could come back to it, but for the sake of my sanity and serenity, I needed to sacrifice my credit. I had been advised by an attorney, Toby Ward, that the worst that they can do is sue you and try to get a judgment against you. Then, they can put a 10 year lean against your home for the total of the judgment. The big bank that I owed $121,995 did just that. They wanted to take me to court, and got a judgement against me for the full amount. The good news is that we love our home and are not planning to move, so I had to do the best I could. There was no way that I could pay that amount.
Part of my amends to my dad, since I had borrowed $55,000 from him in the form of an unsecure loan, was that I created a spreadsheet and agreed to pay him $100 per month until it was paid back. He agreed to those generous terms. I just pulled that number out of thin air, which I later found out was a common characteristic of debtors in DA.
The other people that my dead solar business owes are: American Express $17,594, Nissan Finance for a van that I bought for a few months before they repo-ed it. The balance owed to them is $7,240. Sams $1483. Portfolio Recovery $741, Wells Fargo, 409, Sprint $270, Verizon $2303, American Express $31,293, CED Greentech $31,293, Randy Rowe $830, Cary Murphy $~3000, Bryson Tucker $~2000. The liabilities add up to $266,727.
Other Assets that we haven’t talked about are vehicles. I have that the 2007 Chevy Tahoe 4×4 is worth about $6,000, the 1998 EZGO golf cart is about $500, Meagan’s wedding ring is appraised at $16,794, her 2013 bug was $10,000, and her emerald ring is appraised at $999. All those assets combined equals $654,848. The liabilities are $273,392 which is left on our mortgage and $266,727 which is left in all of that debt from the failed solar business. Total Assets of $654,848 minus $540,120 = $114,728 net worth
