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We have a few months left to complete our goal. Are we going to be able to meet our deadline? Also, should we continue to save the income returns in bonds and cash for this goal after we reach it? More questions arise as we get to the end of the road or the continuation of a beautiful journey. 😉
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.
Oh my, it feels like time is just flying by for us. We’re entering the summer months and we are a couple of months away from fulfilling our house savings goal. As you might already know, we’re not planning on buying a house as soon as we retire. We plan to travel a bit and then scout the area of Sarasota, FL, where we might buy if we like the area well enough to settle there.
This process might take anywhere from one to three years after we retire. There’s also no pressure to buy as our funds can at least keep up with inflation.
Beautiful events happening in our lives
So many beautiful things are happening in our lives now. We haven’t been blogging about it because we’re really living and enjoying this moment. You’ll hear more about it soon, but for now, know that 2018 is finally turning out to be a bright year in our personal lives.
Having your financial life in order is great, but that comes second to having the life that you want and with the people who you want to share it with. This is a beautiful chapter in our lives and the financial milestones that we’re reaching will help us live them with intention.
It’s not all about numbers, but the numbers are our friends
We talk about numbers a lot here, and it will be great when we finally get to see how all the savings for financial independence and the house become more than just account balances. A sum of it will be tangible assets that will enhance our lives.
We’re almost done saving for the house. Since our target amount will be met in a couple of months and we’re not buying soon, I was wondering: what should we do with the future income returns from the NCF?
I’m estimating that we’ll get around $450 in monthly income after we finish saving for this goal. Our NCF monthly estimated income is $418.92 as of 5-31-18. We calculate this amount by adding the estimated income that Vanguard provides for each fund in our monthly brokerage statement.
| How the NCF Funds Are Invested (as of 5-31-18) | |||
|---|---|---|---|
| Type of Fund | Allocation Percentage | Average Duration | Risk Potential |
| Money market | 20% | 46 days | 1 |
| *Ultra-short-term bond | 3% | 1 year | 1 |
| Short-term investment-grade bond | 39% | 2.6 years | 1 |
| Intermediate term bond | 38% | 6.1 years | 2 |
| *As of last month we started investing new money in the shortest term bond fund. |
Some things to keep in mind are that we plan to leave the income invested in the house fund account and that we have flexibility with this income. We don’t have to cash it out to buy the house if we incur losses.
What should we do?
Now, let’s see how we did last month on our house savings goal.
June 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% |
| January 2017 | 23.9% | 23.9% | N/A |
| February | 25.1% | 26.5% | 1.2% |
| March | 28.5% | 29.2% | 3.4% |
| April | 28.8% | 31.8% | 0.3% |
| May | 30.2% | 34.5% | 1.4% |
| June | 39.1% | 37.1% | 8.9% |
| July | 46.1% | 39.8% | 7% |
| August | 49.1% | 42.4% | 3% |
| September (new target) | 78% | 77.2% | 28.9% |
| October | 80.5% | 79.3% | 2.5% |
| November | 82% | 81.4% | 1.5% |
| December | 85.1% | 83.6% | 3.1% |
| January 2018 | 84.9% | 85.7% | -0.2% |
| February | 84.6% | 87.8% | -0.4% |
| March | 85.9% | 89.9% | 1.5% |
| April | 86.2% | 92% | 0.3% |
| May | 88% | 94.2% | 1.8% |
We made some progress in May, just as we expected. Nothing too crazy, percentage-wise, but still advancing towards our goal.
Don’t get me wrong, that’s a nice chunk of money we’ve saved. So, by no means am I trying to look down on it. The annual work bonuses that are coming up are looking really good, so we’re confident we can wrap up this goal on time.
NCF returns
The total return for the month was $897.89. The bond funds were up by $482.68 and we had income returns of $415.21. In the future, after we reach our goal, that $415.21 would be the amount that we’d re-invest in either the money market, bond fund, or a new stock fund.
I’m really glad that we decided to blog about this goal. It’s nice to have this journal that we can always go back to, any time we want to see how we accomplished saving cash for our first home. Do you blog about your financial goals or track your progress somewhere?
