Sunday, August 06, 2006

My net worth is creeping back up: my asset to debt ratio is now above 50%

My plan to dig myself out of debt and get my net worth on a positive track is making good progress. My asset to debt ratio is now above 50% and I am on track to achieve breakeven by the end of the year. The asset/debt ratio moved from 49% to 55% over the past two weeks.

My debt consists exclusively of back taxes. My current financial plans emphasize savings and retirement plans over incremental installment plans to pay down those taxes. I will probably keep that bias towards savings for at least another year until I have a significant nestegg of assets and a substantial rainy-day fund. Only then will I shift and pay off those taxes more aggressively.

On the other hand, I might decide to pay off my New York State taxes before the end of the year since I do have the cash on hand to do it and it is a cash flow drag each month. I might even do it this month or in September just to get it out of the way.

Meanwhile I do try to pay a little extra each month to the IRS to make a dent in that larger portion of my debt.

-- Jack Krupansky


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