June Performance Update (Day 2373): Trailer Park Profit!

My main goal* was to build an investment and cash portfolio of $1,120,000* in 1500 days**, starting from 1/1/2013 and ending in February of 2017. I made my goal in 2016, my 1500 Days are over, and I’ve left my job. In the interest of openness, I’ll continue to share my numbers.

At a very high level, my investing goal is this:

I want to have the most money over the long term. I’ll readily give up short-term gains for bigger profits, even if I have to wait a long time.

Furthermore:

The core of my strategy is index funds which I expect to return 7-8% over the course of my life. I’m not interested in investing in anything else unless I’m reasonably confident that it will earn more than 8% and it’s mostly passive.

It’s very difficult to find investments that I like more than index funds. VTSAX is dead simple and effective. Along with Cheetos, Chicago deep-dish pizza, and watching the sunset over the Pacific, it’s one of the few no-brainers in life!

However, I don’t always buy index funds…

Trailer Park Profits

We invested $170,000 in a trailer park way back in January of 2018. The property had been neglected and some of the tenants were suboptimal. Both circumstances were fine with Mrs. 1500 and me as long as the park pays out over the long term. Also, we have no role in the day-to-day management of the property, so we wouldn’t have to deal with any of the operations.

But we knew it would be a long time until we got paid. The park had lots of empty pads. Some of the existing trailers were so far gone, the only option was to demolish them. One tenant hadn’t paid rent in 7 years. All money initially earned would be put right back into the park.

Last week, after 18 months of ownership, we received our first payment of $5831.85. This payment was for the first quarter of 2019. If payments continue, we’d earn about $24,000 this year. Not a bad return. But, we’re just getting started.

We’re in the process of filling the park with trailers and selling them off. As we complete this process, our returns will climb. The eventual goal is to own none of the homes and just collect lot rent. At that time, our income will probably be lower, but the management will be much easier.

I’m happy with what we’ve done. We’ve fixed up the property and kicked out the riff-raff. We’re providing a safe, affordable place to live and making money at the same time. No complaints.

June Spending: $5,508.95

We blew $5,508.95 in June. Summers tend to be bigger months with more travel and kid activities. After our mortgage payment of $1,238.49, our three biggest expenses were:

Miscellaneous home crap ($927.98): We may sell our home soon, so we’ve been spending money on paint, furnishings, and landscaping. We’re almost done.

Groceries ($871.38): Food! This is one expense I don’t think much about. We don’t shop at Whole Foods, but we don’t shop from the $.10 bin either. We also entertain others often which is important to us and makes us happy.

Auto insurance ($414.88): The toy car accounts for half of the cost of our insurance. We pay this bill twice a year, so we spend $830 annually.

2019 Spending

We spent $29,198.80 in the first half of the year. Oof! Big number, but the second half of the year should be better:

• Our mortgage ($8,185.46) was the biggest expense. This will go down in the second half of the year because I just switched home insurance providers and cut our costs by more than half.
• We’re done paying for braces for Younger Daughter ($216/month).
• Also, we’re mostly done with the work on our home.

Despite our spendy ways, I’m not concerned. We over-saved and still have income. However, no matter how much money you have, it’s important to spend mindfully.

Most Fun Expense

Travel! I flew out to Yosemite to hike with friends:

I also attended UK Chautauqua:

Both trips were pretty great, but it feels good to just be enjoying daily life in good old Longmont. Never forget to enjoy life wherever you’re at.

June Performance Update

I have no idea how much money we started the month with because I forgot to record my net worth at the end of May. Whoops! However, we ended June with a net worth of $2,262,170 which was a decrease of $6,427 from May 1st. This was our first down period for 2019.

2019 (as of 6/31/2019)

• Days elapsed: 181
• June gains: -$6,427
• 2019 gains: $197,730 (including 401(k) and HSA contributions**** of $13,067.19)

Since the start (1/1/2013)

• Days elapsed: 2373
• Gains since 1/1/2013: $1,161,127
• Investment portfolio and cash value: $1,747,170
• Net worth (investment portfolio plus home equity, a silly toy car (Acura NSX!), bikes, and dinosaurs): $2,262,170

Portfolio Breakdown

We have a diverse portfolio (full listing here) that includes real estate:

• Mobile home park (elevated home living to the easily offended/politically ultra-correct)
• Coworking space: We own a building/small business in Longmont
• Private loan ($45,000)
• Syndication deals (six totaling $275,000)

And stock market holdings:

• Individual stocks (old thinking)
• Index funds (most money goes here now)

In June, we earned $7,625.36 in income from real estate:

• Trailer park: $5,831.85
• Coworking space: $1,000
• Private loan: $293.51
• Mortgage note: $500.00

2019 income from real estate is $26,488.78. I’m really happy with our returns because they are growing aggressively. The best days are still ahead for the syndication deals, coworking space, and mobile home park. While these investments are about half of my portfolio, they throw off almost enough money for us to live on. As time goes on and the payouts increase, our position will get better and better.

Life is good.

*My goal wasn’t to have $1,120,000 at the end of 1500 days, but at any time before the day count was up. Why? It all goes back to the 4% Rule. Remember that our little friend, Mr. 4%, is nothing more than the most conservative safe withdrawal rate. Since my investment portfolio now sits at $1,550,000, I can spend about $62,000 in my first year of retirement.

**My original goal was $1,000,000 and no debt, I later raised the goal by $120,000 to $1,120,000 because I will have debt in the form of a mortgage and I firmly believe in not paying it off. My compromise was to have enough money put away to cover the mortgage at the time of retirement.

***This is an affiliate link. If you sign up, the blog (me) makes some cold, hard, beautiful, cash. Personal Capital is a totally free and awesome way to keep watch over your investments. It’s worth it for the fee analyzer alone. I would never recommend anything that I don’t personally use and completely believe in, so give it a try. If you’ve already signed up through the link, please know that you are a fine person of above-average intelligence.

****My 401(k) contributions include my own, Mrs. 1500’s, and the contributions from my corporation. Self-employment with a solo 401(k) is a very powerful savings tool. I should have done this years ago.