Welcome to our belated August 2024 financial update blog! We didn’t know if we would ever have a chance to get to this blog. We have been over the top busy with little time to spare.
In last months blog we said that we were on the verge of heading to Texas permanently. We wanted to be present for the final stages of our build and make sure everything was moving along. Well we made the move and have been living in a hotel since the middle of August.
It’s great to be so close so we can see the progress being made in person. It has also allowed us to be present to deal with some issues that have come up. The only downside has been the cost.
Normally it wouldn’t be too bad to just stay in a hotel. However, at this point we are in the most expensive part of the home build process. The pile on factor is huge because we are incurring a large amount of interest on our construction loan at this stage. Now we have the hotel expense and on top of that. We have also been lining up home furnishings. So it’s getting very pricey!
One other thing to note is that while all of this is going on we finally managed to sell our beloved RV. The only good thing to come out of that is it is off of our books. As much as we loved our RV it was a depreciating asset. And in the current market it wasn’t easy to sell let alone get a fair price. It was kind of a bummer, but it is what it is and we move on.
On that note let’s get to the numbers for our August 2024 financial update!
Our Portfolio Performance August 2024:
Portfolio = $1,568,229
Our Portfolio Increased By $2,961 or 0.19% From The End Of July
Year-To-Date Our Portfolio Has Increased By $139,876 or 9.79%
*Net Worth = $1,325,317
*Our Net Worth Decreased By $41,545 or 3.04% From The End Of July
*Year-To-Date Our Net Worth Has Decreased By $255,239 or 16.15%
*As a reminder, our net worth number is being dramatically skewed by our home build and the process required to make it happen. Currently our numbers only reflect one side of the home build transaction. These are the draws being made to finance the construction process which is a liability to us. The only asset related to our home build that is included is the property, which we own outright. Once our home is completed we will recognize the asset and adjust our net worth number to properly reflect the value of our home.
While the markets continued to fly our portfolio only reflects a slight increase for the month of August. This is mainly due to the amount of cash we are laying out as noted above and some expenses related to selling our RV.
Additionally, we have started moving funds around in preparation for the completion of home. When that time comes we will need to fork out a sizable amount of cash to cover our downpayment. As we mentioned in our July blog it’s a little different when you are building a home rather than buying an existing home.
Just to recap from that blog:
“Usually when someone purchases a home on the open market it requires 20% down on the purchase price to avoid PMI. However, when someone in our situation finances a custom home it requires 20% down on the builder contract price.
So the fact that we own the property already doesn’t matter. Neither does the fact that the estimated appraisal value is going to be much higher than the builder contract price. All that matters is how much we are paying the builder to complete the job.”
One thing we are looking forward to is getting the final appraisal on our house done. Once this is completed we will readjust our net worth numbers and bring everything back in line with reality. It’s pretty nerve-wracking to sit back and watch your net worth plummet every month as more and more expenses are incurred.
Spending numbers for August 2024:
Monthly Budget = $5,000
August Spending = $14,631
August Over Monthly Budget = -$9,631
YTD Over Budget = -$30,596
As you can see it was another blow out month in the spending department. Quite frankly the only reason we keep reporting these numbers is in the interest of transparency.
Our budget was created based on living fur-time in our RV which was easy and simple. Someday we will get back to easy and simple, but not until our house is done and everything related to that process gets settled.
To conclude our August 2024 financial update we will just say that we are ecstatic to be in Texas. This process has been long, grueling and very expensive. Now that we are nearing the home stretch we are getting very excited, but our stress levels have also amped up.
If we could give any advice to our readers who are thinking about building a home it would be to do your research and get a reputable builder with a good attitude. We almost went with another builder and we honestly dodged a bullet by firing him.
Going through this process with our current builder has been a blessing. He has been absolutely amazing the entire way. Now that we are nearing the end we don’t know what we would have done without having a good honest partner.
Thank you for reading our blog! With any luck our next update will come from our completed home!
See you on the road, or maybe just around town.
Joe
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