May 2019 NCF Update: Another Month in the Red?
Months in the red for bonds are back in our NCF savings world. However, we still managed to make some progress last month as we get closer to the homestretch.
Welcome to the monthly update of our house fund goal aka Nuestra Casa Fund (NCF). Our goal is to save enough to fully fund our home purchase before we retire. We measure our progress by providing a monthly update against our benchmark.
Even though we haven’t made our retirement date public yet, we already started to get rid of stuff that we won’t be needing after we settle somewhere else warmer than PA. We made a project plan (thanks to Mrs. Enchumbao’s day job skills) to tackle every room in the house this summer and either donate, sell, or trash what we won’t need. When you start to get rid of things in preparation for the life that lies ahead is when you know this is getting real.
And you know how else?
After you see us check off this house goal. As our money goals keep winding down, so does our to-do list prior to early retirement. August is the deadline that we set for this goal and, I tell you, August could just be full of surprises, baby!
Now, let’s see how we did last month on our house savings goal.
May NCF Update
We expect to meet our goal by August 2018. The allocation for our goal is 80% bonds and 20% cash. We decided on this allocation, so that our goal can keep up with inflation, without risk of major losses during a downturn. Our goal is to manage risk rather than seek huge returns.
Below are our results since we started tracking this goal.
|NCF Monthly Progress Since 2017|
|Month||Percent of Goal Met||Benchmark||Percent Increase Towards 100%|
|September (new target)||78%||77.2%||28.9%|
If you look at our progress from April 2017, we got exactly the same percentage increase last month: 0.3%. If our savings trend the same as last year, better months lie ahead. We’re done front-loading Mrs. Enchumbao’s 401(k) and will continue to max out mine throughout the year.
According to our projections, we should be at 92% of our goal by now, but we are at 86%. We’ll need to do some catching up over the next few months in order to meet our target date. The work bonuses that are handed out in the summer should help. 🙂
The total return for the month was -$775.58. The bond funds were down by $1,205.92 and we had income returns of $430.34.
If you look primarily at the brokerage account where we hold all of our NCF funds, since we added bonds last September, we’ve been in the red by 1-2% since then, but that doesn’t tell the whole story.
And here is where investing for the long term matters.
When we transferred some stock fund investments from our Freedom Fund into our Nuestra Casa Fund, those investments came in with $20,035.43 worth of long-term capital gains and dividends. If you count those as gains, since they were not part of our principal, our cumulative return as of end of April is $17,677.67. Does that make sense?
All in all, we’re still in the green because we started saving and investing a little more than a decade ago. We just didn’t allocate this money to buy a house from the beginning.
That’s why it’s important to start saving and investing early in your journey, even if you don’t have it all figured out yet. At some point in life the puzzle will start to make sense and you’ll be glad you started early.
I’ve never heard of anyone regretting that they started saving and investing early in life. So, go ahead and start saving today! Let the compounding begin and you’ll be thanking yourself later. 🙂