The Money Pit of Eden 2
Eden2, which is my my largest asset, needed additional, completely unexpected injections of capital to complete the remediation project. To finance the required payments, I tried to get ASB bank in New Zealand to increase the loans, but they refused, citing lack of income.I had to borrow money in he USA using two different personal loans for $25,000 and $20,000. That was on top of draining my TD Ameritrade trading account for the earlier payment.
These loans were based on the assumption that the project would be finished in December 2018. As a result of a massive storm in July, the block where my unit is was extensively damaged when the waterproof covering came off right when they had the roofing all removed. As a result, all the drywall in the interior will have to be replaced, and the kitchen completely rebuilt. That delayed the completion for another six months. Because all my loans were based on it being completed by end of December, this means I'm running out of cash to pay the loans.
As of the end of the year, I need to borrow another $20,000 using credit card low interest cash advances, to pay for yet another body corporate levy, and simply to maintain temporary cashflow of all the different loans. Loan payments and regular expenses now exceed my salary every single month, so there was no choice but to pay loan installments with even more loans.
Cashflow Crisis Point
After too much spending on the two major family trips in 2017 to New Zealand and Germany, Orlando's trip to Greece and Italy, and lending Sylvia $10,000 to keep her business afloat, and all other reserves going to the Eden 2 money pit, I reached a total cash flow crisis in early 2018.My strategy since about October has been to simply stop paying down my Fidelity credit card, which I have been meticulously paying off each month. At the end of 2018 this meant the debt on that card was up to nearly $13,000.
The whole cash flow situation was tough as a desperately wanted two of my personal goals - finally getting a new mountain bike and a new paraglider. Both these goals had to be postponed due to the Eden2 delay. I also didn't feel comfortable going to either the Rat Race, or Chelan due to discomfort about drifting further into debt.
Sylvia's lack of financial contribution
Despite a busy year travelling for her business, getting paid $25,000 from her Uber settlement, and making multiple trips to her parents, Sylvia made almost no contributions to our financial situation at all this year. She did commit to Orlando's fencing club fees each month. She did manage to pay for the new dishwasher at the end of the year, and used funds from her parents for our German trip in November to see her parents.However, she never paid any of her car payments, and her car needed new tires, starter motor and a cracked wheel replaced, which I had to put on my credit cards as all her credit cards are constantly maxed out. She now owes me over $12,000 from all her unpaid loans, owes probably $20,000 to Ali Craig and Clinton Swaine, and has credit card balances of another $15,000.
Stock Market Disaster
After the booming market in 2017, the first three months of 2018 seemed like a dream. In January I made more in my 401K than I did from my DXC salary, giving me the first ever experience of what it might actually feel like to have an income that isn't from a salary. However over the summer the market starting to stagger, with a series of sharp drops. Instead of getting out completely with a few thousand of losses, I bought back in on each dip. The markets then collapsed, with me nearly 100% invested - the first time in years. At the end of 2018 my 401k was down 17% and my IRA and MAP plans similar amounts.
Long Term Equity Gains - but for how long?
The only bright part of 2018 financially was that Eden2 and Warmlands ave, as my two biggest assets, have both substantially increased in value. My valuation for Eden2 when it is finished at sold is $725,000 NZD, and Warmlands Ave is worth $750,000 USD. That meant that despite the cash flow crisis, Sylvia's lack of financial contribution to our family, and the stock market crash, means our my net worth increased by $183,000. That is the biggest increase except for the massive $265,000 in 2016, where both the market and Warmlands ave increased substantially.
Risks and outlook for 2019
2019 will be six months of extremely tight money management, and then finally the sales process for Eden2. For the first time ever I mapped out six months of cashflow in order to ensure all the loan payments could be made.
This leaves little space for error in any account. However, Fidelity raised my Visa card limit to $23,000, probably because they see me not paying off the outstanding balance and are quite happy to keep me going further into debt.
Sylvia's business may finally turn around as a result of her new marketing and website. She signed a $24,000 contract with her CEO client in Puerto Rico in the first few weeks of the year.
Tax refund may provide some short term relief, and possibly I might spend some of that on one of my overdue personal goals of a new paraglider or mountain bike.
The big financial event of the year will be selling Eden2, which will hopefully occur in July.
This leaves little space for error in any account. However, Fidelity raised my Visa card limit to $23,000, probably because they see me not paying off the outstanding balance and are quite happy to keep me going further into debt.
Sylvia's business may finally turn around as a result of her new marketing and website. She signed a $24,000 contract with her CEO client in Puerto Rico in the first few weeks of the year.
Tax refund may provide some short term relief, and possibly I might spend some of that on one of my overdue personal goals of a new paraglider or mountain bike.
The big financial event of the year will be selling Eden2, which will hopefully occur in July.
