Fired! Two Years Later

Fired! Two Years Later and Still Kicking

Last week, I hit my two-year anniversary of the day I was fired. It’s not a day I would have ever imagined possible. After all, I had built a highly successful career, only to watch it disappear in a flash after a singular event. In hindsight, I was burned out, working in a dysfunctional work environment, and it was time to go. But what surprises me the most, is that I am still in transition. My entrepreneurial efforts haven’t yet produced an income and the coronavirus has stalled my dreams of RVing across the country. But not only am I still standing, I’m maintaining my net worth. And I’m pretty astonished by it all.

Business Flop . . . So Far

This entrepreneurial stuff is harder than it looks. I have created a ton of products – courses, coaching programs, 30-day challenges – and haven’t been able to sell a thing. My mistake has been to devote my energy to product creation instead of cultivating a following. Honestly, I’m still not comfortable with the concept of self-promotion that seems to be required these days. Sure, I started a YouTube channel and have a Facebook group on financial preparedness, but I’ve not been consistent in getting myself out there (yet). I have to do better on this front.

My focus has been on financial freedom – helping people reach the point where they can feel comfortable enough to live out their dreams. But when the quarantines began and the unemployment rates skyrocketed, I quickly pivoted toward emergency financial planning. I built an Emergency Planning webpage and began offering programs and doing weekly live webinars. If ever there was a time to create an emergency plan, this is it. But again, I’m struggling with getting my information in front of the right audience and making sales. And here I am spending my days on product creation as I work to get my online course on emergency financial planning up.

Perhaps the biggest change in terms of the business in 2020 has been working with a business coach. Even though I feel like I am spinning my wheels, the ability to talk about my business with an expert and get a clear path forward has been a game-changer. True, I have days in which I feel incredibly discouraged. But I still believe in what I am doing and feel that I can make a powerful and positive impact in people’s lives. So I’ll stick it out a bit longer.

Life Disrupted

December feels like a lifetime ago, doesn’t it? That’s the month in which I bought an RV. It stayed at the shop for two months, getting some repairs and upgrades. In February, in the middle of our first snowfall of the season, I drove it to a local campground. I spent the next three weeks renovating the RV to make it feel like my home. And then, the world stopped. The campground closed and the RV is sitting in my driveway. My epic travel plans will have to wait for another day.

In January, I listed my house for sale. The hot spring market turned cold as people stayed away from house buying and the contract that I had on the house fell through. Now I am left with a huge laundry list of items that need to be addressed – thanks to the very detailed home inspection report. I’ve spent most of this week painting the entire downstairs ceiling. Not a fun job but it looks brand new now. And I hired a contractor to renovate the master bathroom. There’s still a lot of work to be done, but I’m making progress.

Still a Millionaire

My net worth when I was fired two years ago was $1,143,202. As of yesterday, it was $1,078,321 – a decline of $64,881 (or 5.7%). Considering my income has been negligible, I’ve invested personal funds into my business, I’ve not contributed to my retirement account, and we are in the midst of a coronavirus-induced recession, that number is pretty remarkable.

Recap

Here’s a quick overview of what’s been happening on the financial front for two years.

  • My income has been less than $1,000 over the last two years.
  • I’ve invested in my businesses (Dr Brenda Money Coach, Dream Big Money Academy, and Better Life Challenges).
  • I took funds out of my Roth IRA to buy an RV.
  • I spent money to trade in my Honda for a used Jeep that I can tow behind the RV.
  • The value of my house has declined and it has yet to be sold.
  • I now have debt (credit card balances, business line of credit) for the first time in a long time.

Gosh, where’s the happy news? Good point. I’ll go with this:

  • I do not have a mortgage.
  • When the house sells, it will wipe out all debt and pay for my living expenses for years to come.
  • My RVing lifestyle will happen – eventually – and open new doors on the business and social fronts.
  • I have fantastic products and once I find the approach and strategy to sell them, I’ll have a good source of income.
  • My tastes are simple, which keeps my expenses low.
  • Despite the dismal numbers, I continue to bring optimism and creativity to everything I do.

Net Worth Numbers

Net worth is the most important measure of wealth because it takes into account both your assets and your liabilities. Over the two-year period, my net worth declined by almost $65,000. But there are two factors that account for the bulk of that decline.

  • First, in previous net worth calculations I used the Zillow estimate to place a value on my house. But this time around, I factored in lower selling prices and realtor fees. In January, my house was valued at $309,555. The figure I used in the April statement was $275,000, a conservative estimate of the profits that should come my way after the sale. That accounts for a decline of $34,555.
  • Second, I am carrying debt of $30,249 and expect that to increase until the sale of the house goes through. The debt is temporary.

Those factors alone negatively affected my net worth by $60,804. And that’s pretty close to the total drop in two years.

How can this be?

It’s beginning to look like I “cooked the books.” But I did no such thing. Here’s a closer look at the net worth components.

My largest asset remains my retirement account. And while I lowered the value of my house, in January I added in the value of my RV, which is why that figure jumped. My biggest worry is that I am nearing the end of my cash and taxable investments, which is why debt figure appears for the first time in April. Because retirement comprises 72% of my net worth, let’s take a closer look at that category.

A Note about my Retirement Strategy

When I lost my job, I moved my 403b retirement funds to Vanguard. In the last several years of my employment, I was able to contribute to a Roth 403b. I prioritized those contributions, which resulted in a decent mix of traditional funds that will be taxed when I withdraw them, and Roth funds in which I’ve already paid taxes (my current split is 80% traditional IRA and 20% Roth IRA).

Aside from my RV purchase, my goal is to withdraw funds from the traditional IRA first and allow my Roth IRA to grow tax-free for at least another decade. That approach impacts how I invest the funds. A large portion of my funds in the traditional IRA are invested conservatively (Vanguard’s LifeStrategy Income Fund). I’ve been more aggressive with the Roth IRA, adding individual company stocks at opportune times.

Performance

In the summer of 2018, I transferred my retirement portfolio to Vanguard. Using July 15, 2018 as my starting point, here’s how the portfolio did:

  • Traditional IRA – from $571,565 to $618,901 (up 8%)
  • Roth IRA – from $174,570 to $159,125 (includes $60,000 withdrawal) (down 9%) [Had I not withdrawn funds from the Roth IRA, that fund could have seen a nice increase of about 25%.]

Now that we are in the midst of the coronavirus meltdown, I feel okay about my asset allocation. Here’s why.

  • The majority of my retirement funds are invested conservatively. My rate of return is 0.6% between January 1 and April 15 in the traditional IRA.
  • My Roth IRA includes some “discounted” stock purchases that should hold up beyond the recession. For instance, I bought Apple stock at $146.47 (today’s price $286.70 ) and Amazon at $1,663.20 (today’s price $2,428.29).

Next Steps

I have two immediate goals. First, sell my house and use the proceeds to support my RV lifestyle for at least three years and invest the difference. Second, transition to working and living on the road and building a steady income. Those efforts should increase my happiness levels and minimize my money worries.

I’m also gearing up to live a healthier and more active lifestyle, and I hope traveling to beautiful places will boost those efforts. I am eager to transition to a new life, just as we are all eager to be over this health crisis and get back to work. I expect to see a temporary drop in net worth, but a permanent increase in joy and contentment.

Check out my Emergency Financial Planning page.

About the Author Brenda

Dr. Brenda is a financial coach, educator, researcher, and sociologist. In addition to blogging at The Five Journeys, she writes 30-day challenges at BetterLifeChallenges.com. Her passion is guiding people on their journey to financial freedom through coaching at DrBrendaMoneyCoach and online courses at DreamBigMoneyAcademy.com.

  • I’m with you on self-promotion and getting out in front of people, but I know I have to do it to constantly be on people’s radars, and I’m about to work on creating my own course too. One thing people suggested to me is pre-selling before I even start creating the course. And to use email marketing. We’ll see how it goes. Sorry so many things have been interrupted for you but you have a LOT of things in the plus column!

    • Brenda says:

      Hi Tonya! Yes, to pre-selling. Of course, it helps if you have a following before making the effort. That has been my downfall. Email marketing hasn’t worked for me – I used FB ads to grow my list and now I have a list of people who don’t open their emails. Now I realize I don’t need big numbers. I just need a strong following – the old know, like, and trust formula. Let me know if you want to bounce around ideas on course creation. I actually enjoy the process.

  • Jeff says:

    Wow, impressive, that seems like a pretty negligible drop in network with 2 years of not working! I hope your RVing lifestyle can start in the summer. :).

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