If there’s one thing I’ve learned on this #buildinpublic journey, it’s that life doesn’t give any care to your carefully laid plans. So far in the one day of this week, I’ve had to fight medical insurance, discovered an upward of $2,100 medical bill that I might not be able to get out of, even though we’re past our out of pocket limit, and had a tooth pulled that is more painful than I anticipated.

Yesterday’s post was clear, we had to add debt and that is going to delay our snowball. Now on paper I should break $500 per month in dividends this month, but with the $1,000 in margin on the wife’s account the avg $45 a month from her account will continue to DRIP and won’t be able to be pulled out to start slamming debt.

Starting June 1st, after all the May dividends get reinvested, I will start taking my dividends and throwing them at the debt. $500 a month can clear $6,000 in a year. So far this month my covered calls have generated $509 in premiums, with $152 set aside for taxes. If my CCs can make even $500 per month after taxes then I’ll have another $6,000 to throw at the debt over the next 12 months. While that same $12,000 could increase monthly dividends by another $250 per month or generate even more CC premiums… The amount of money I can start investing once my debt is clear would more than make up for it.

I feel that this is a solid goal that should allow me to push forward more cleanly. The 401k loan is almost in the category of “lost cause” because I cannot pay it down manually. At current rate it has 28 more months to be paid off. If I can increase other income streams, I might consider having more come out of my paycheck, but at this time $600 per pay is the best I can do.

With the HELOC at $15k+ my hope is that we can get it paid down swiftly if adding the additional $1,000 a month from CCs and dividends. I’ve also done the math. There has been a lot of temptation to wipe out my dividend funds and clear the debt entirely and use the freed up income to rebuild the dividend snowball.

Current value of Shares is $23,100 against $25,879 spent. Then the Covered Call money has $7,300. Aside from any capital gains taxes, that would clear off the heloc the credit cards and almost all of the car loan. I’ll have to math this out and see if it would produce better results.

~~Miniwing~~
Investor, Parent, Stoic