Welcome to the monthly update of our house fund goal, Nuestra Casa Fund (NCF). Our NCF goal is to save enough to fully fund our home purchase before we retire early.
We’ll measure our progress by providing a monthly update against our benchmark. Our number one rule: Never, nunca, touch this money unless it’s for the house.
We’ll achieve our goal by continuing to work at our full-time jobs. As far as investing, our plan of action is to continue maxing out retirement accounts, while saving for the house and fulfilling the rest of the buckets we deem necessary to retire early.
Celebrities, they are just like us
When I think of celebrities and money, many times they’re like regular people who win the lottery. Give them a few years and some will go broke or live paycheck to paycheck again. Some people are just really bad at managing money, regardless of their social status.
However, it’s nice to see that we’re not the only ones with “insane” ideas like paying for a home in cash. Some celebrities, like Taylor Swift, paid for their homes in cash. She reportedly paid $17 million for her Rhode Island state.
Now, we obviously don’t have the kind of money that Taylor Swift has, but we’re also not trying to save $17M for a home. It’s all relative. 😉
Why am I so excited to buy a thing?
A house is an asset, but it’s usually not an income-producing one. A house is just a structure, so why do I feel so excited to save and buy this thing? The answer to that is the experiences that I’m looking to having in our future home.
These are experiences that we can’t or choose to not try in our current environment. For example, we’d love to have a music room where we can play instruments, blast some music now and then, and karaoke without bothering a nearby neighbor.
In our current place, if we decide to raise the volume on one song, the first floor neighbor is already getting a titty attack. Can you picture someone getting a titty attack?
We’d also like to have our garden, where we can grow some tropical fruits, like mangos and avocados. I don’t think these fruits find snow attractive, so we’ll need to move to a warmer climate.
This goal is important to us because, besides owning our own roof, we are looking forward to all the experiences that we’ll have together.
And we already have the hammock, in a box, waiting to be unpacked in that new home! That’s right folks, we went ahead and bought a $1,000 hammock online and put it on credit, no payments and no interest for 36 months.
“These fools just bought a $1,000 hammock on credit?!?”
Okay, so by now, I’ll let you know that that was a joke. We did get a hammock, but we’re not suckers that would put stuff on credit.
Mrs. Enchumbao just celebrated her 10th anniversary with the company and got to choose a free gift from a catalog.
It was hard to pick a gift, given that we really don’t like to buy things that we don’t need. She doesn’t care for jewelry, at least not the boring catalog type, as she prefers to buy unique jewelries when she travels abroad.
So we decided to get a hammock, which has been on our wish list for a while. And we didn’t even open the package. We’re going to leave unopened until we move into our new place. We hope that we’re not missing any parts because we won’t be able to return it 2-3 years from now!
But what are the chances that we’ll be missing parts on the one package we decided to not open within a return period? That’s got to be some really bad luck, so we prefer to think all is fine. 🙂
Would you spend a $1,000 on a hammock?
Neither would we, our boxed hammock cost around $125. We’d be willing to spend a little more if we needed to purchase it, but I don’t think we’d spend a $1,000. That’s for Taylor Swift to spend.
We haven’t forgotten about the DR post
During our most recent NCF update, we mentioned that we’re no longer considering moving to the DR after early retirement. I have yet to write that post on why we changed our minds. It’s coming, really… I promise. We might not publish it until the fall, as we’re fully booked for the summer with activities.
Go Curry Cracker Philly Meet-up
Speaking of summer activities, GoCurryCracker is doing some U.S. traveling and planned a meet-up for August 16 at a park in Philly. We’ll be attending and are looking forward to meeting him and be able to exchange ideas with other FIRE-minded folks. Swing by if you live in the area.
Now, let’s see how much we were able to add to the NCF last month.
NCF August Update
Below are our July results along with a year-to-date update. Last month we saw an increase of 7% towards our march to 100% of funding our goal. We’ve now saved 46.1% of the funds for our future home purchase. We’re almost halfway through our goal. Real estate market, get ready for us!
We expect to meet our goal by June 2019.
|Year-to-date NCF Update|
|Month||Percent of Goal Met||Benchmark (the goal we set)||Percent Increase towards 100%|
|January 2017||23.9%||23.9%||This is when we started tracking this goal.|
We’re still ahead of schedule, but now that the June bonuses have been accounted for, we expect a slowdown and will be contributing around 1-3% per month to this fund. As I mentioned on the previous update, we got bonuses back in June but mine went to another account and that’s why we didn’t add it to the previous update.
I hope to be patient enough to do this for the next two years. By that, I don’t mean that I’m lacking the discipline to save, it’s just that we’re so used to almost-instant gratification. But we still have to wait the two years to retire so saving for the house is not just what’s keeping us working until then.
I think that anticipating what our home would be like is keeping us motivated. Don’t you appreciate things more when you wait to buy them until you can afford them?
We transferred my June bonus into the account last month. It’s now on lockdown! We didn’t touch even a penny of it. The most important function for any bonuses over the next two years is to buy us our future home.
Since we’re about two years away from retirement, we’re not reinvesting the dividends from the taxable account and are using this money to fund the NCF.
Net worth allocation between the Freedom Fund and Nuestra Casa Fund
If you recall from our previous FI updates, the Freedom Fund will cover our expenses in retirement. We project a net worth allocation of 85/15 by the time we retire. The Freedom Fund would comprise 85% of the allocation, while the Nuestra Casa Fund would make up the rest.
|Allocation between FF and NCF|
|Goal ratio (%): 85/15|
One way to interpret this chart is how much of our net worth do we want to allocate to our principal residence? We’re projecting to have 15% of our assets allocated to our home purchase by retirement.
That’s it for now, folks. For those of us in the Northeast of US, or wherever it’s summer, let’s enjoy that last one month of warmth. Happy travels!