April 2018 NCF Update: We Could Be 4 Months Away From Completing Our Goal

future home purchase

We finally got a positive return on our funds for March. Does this mean that the bond fund losses will reverse? Are we still going to be able to meet our goal by August?


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.


The spring season is finally here even though, with all the snow we’re still getting in the northeast, it feels like we’re getting ready for winter! People are selling homes while others are buying. I get weekly, or sometimes daily, reports of homes for sale in our desired area and there’s definitely more inventory now than a few months ago. Even though we’re not planning to buy a home until at least a couple of years from now, I like to see how the real estate market is performing.

As you might know, we started saving for a house back in late 2016. We sold some investments last year and that helped fuel our house savings. If everything goes as planned, we should have the funds ready before the end of the summer and then can concentrate on adding more capital to the funds we need for the first five years of early retirement.

Now let’s see how we did last month on our house savings goal.

April 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 not to seek huge returns, but to manage risk.

Below are our results since we started tracking this goal.

  NCF Monthly Progress Since 2017
MonthPercent of Goal MetBenchmarkPercent Increase Towards 100%
January 201723.9%23.9%N/A
February25.1%26.5%1.2%
March28.5%29.2%3.4%
April28.8%31.8%0.3%
May30.2%34.5%1.4%
June39.1%37.1%8.9%
July46.1%39.8%7%
August49.1%42.4%3%
September (new target)78%77.2%28.9%
October80.5%79.3%2.5%
November82%81.4%1.5%
December85.1%83.6%3.1%
January 201884.9%85.7%-.2%
February84.6%87.8%-.4%
March85.9%89.9%1.5%

After two months of negative returns we’re back to positive for the month. We’re 1.5% closer to completing our goal. We still haven’t recouped what we lost for January and February, but we seem to be turning around. Our numbers are still falling behind our benchmark, as we aren’t able to save as much yet for this goal because we’re front-loading our 401(k)s and taking care of other major expenses.

NCF returns

The total return for the month was $713.20. The bond funds were up by $325.35 and we had income returns of $387.85. 

It’s nice always nice to see a positive return on our investments, but we understand that by having money in bonds we’re still taking some risks and may continue to see negative months ahead. Having our funds in bonds vs. stocks is like choosing to ride the carousel instead of the rollercoaster. There’s less excitement but also less short-term risk.

In general, the stock market goes up or down 1-3% on a routine basis. It’s part of the game so if you’re in it for the long haul, stay calm and invested according to your asset allocation. That’s how you come out on top.

Tax-loss harvesting

Eighty percent of our house funds are invested in two Vanguard bond funds. We were able to do some tax-loss harvesting last month. This means that we exchanged some of the bonds for other bonds that are similar and bought the initial bonds back a month later. With this move, we’ll be able to write off $3,610.70 in losses to offset ordinary income over the next two years. We ended up buying the funds back at almost the same price.

Tax-loss harvesting is an advanced tax-saving technique used in investing and we don’t want to get into the weeds of it now since our mission is to simplify money matters for you. However, MadFientist has a detailed article explaining how it works, so we’ll leave you with that if you want to explore this concept further.

Exciting months are ahead of us! In May we’ll be done front-loading one 401(k) and will continue front-loading the second one. This should free up some cash for the NCF goal.

What personal finance goals do you have for this month? 

Please like & share:
March 2018 NCF Update: Could Bond Fund Losses Derail Our House Purchase Plans?
May 2018 NCF Update: Another Month in the Red?

Mr. Enchumbao

Mr. Enchumbao retired at 44. He worked for 13 years at Vanguard, primarily as a Communications Project Leader in the Institutional Division, helping people save for retirement.

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