September Update

Fell off the blog for a while!  There have been SO many happenings and I really need to update the blog about what’s been happening.  I wrote the last post and had done the net worth calculation for April as well as May and June, but never came back to update.  Then I didn’t even calculate for July or August!  But I have done September, and am ready to tackle this thing!

Quick recap from the months I missed, starting with March as a recap:

March 2016 $503,965
April 2016 $531,784
May 2016 $540,537
June 2016 $578,965
July 2016 ??
August 2016 ??
September 2016 $638,199

We saw really great increases from March to April, and then in June things really picked up as we were given some cash from family.  The cash was given with a sole purpose and I’ll get into that in a minute.

In the last few months we also sold our two rental properties, walking away with cash from each.  This was a huge deal to us as we were very concerned we were going to have to bring cash to the table on one (luckily we didn’t) and that property had been costing us $500+ EVERY month for the last few months.  SO glad to be rid of it.

So, the giant elephant in the room is that…………we bought a second home.  This is a hard one to write as I feel so many will think it runs contrary to the very idea of saving money and financial independence.  Granted, I’ve always wanted the idea of this blog to be not about extreme frugality, but instead about how we can live a very comfortable life and still save a bunch of money and work toward an earlier retirement than most.  But this is a complicated one for us.

A bit of background….I’ve mentioned before that we have a boat.  It was purchased with a huge downpayment and paid down in less than 18 months after purchasing.  In the four seasons we’ve owned it, we’ve always trailered everywhere.  We get the boat out of storage, drive it to our house.  Then we pack everything up for the day (cooler with food/drinks, towels, beach toys, water toys, etc) and then we hit the road.  We drive anywhere from 15 minutes (reservoir near our home) to over an hour (tons of lakes within an hour of our home) and spend the day on the water. Our boat fits a lot, so we often have many friends with us and we hang out and enjoy the water, the company and the sports of it.

We’ve talked about buying a second property because it really does fit us so well.  We actually like “keeping house” and all that comes with it.  Well, in all honesty I don’t love cleaning, but I love doing home improvement projects, making small upgrades, painting, etc.  We’ve done DIY projects since we owned our first home and have always tackled these projects together.  We truly enjoy home ownership and all that goes with it.

Mr. Fool’s mom moved out of state several years ago and comes back each summer for a week and we have always rented a lake house nearby, and spent the week there.  We’ve often talked about having a lake house that not only would we get to enjoy year round, but that she could come and spend long summers here instead of only one week each summer.  Well, this year we found a house that seemed perfect.

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It’s not tiny but not huge.  It definitely needs some work but is livable right from the start.  With some sweat equity we can likely add decent value to the place (we bought it for $100K less than they purchased it for 10 years ago).

Some might think that a purchase like this would steer us off course.  If anything it’s spurred us on to be even more motivated.  We set aside some of the money from the rental sales and that’s it – that’s our cash we get to use.  Once it’s gone it’s gone – no hitting up credit cards or equity lines to finish projects.  That said, a lot of what we have to do is foundational stuff that isn’t very fun or doesn’t make things beautiful, but totally necessary.  We’ve already done a little painting, had some trees trimmed/removed and foundation work started last week.  Some of this we contracted out (adding the piers for the foundation and the tree work) and some of it we’ve done ourselves (painting, cleaning out the crawlspace ourselves, etc.).  I won’t get into too many details about this home on this blog, but when it’s applicable I’ll mention things.  I am documenting the changes over at The Navy Cottage if you’d like to check any of that out.

Back to September!

NET WORTH: SEPTEMBER 2016
ASSETS THIS MONTH MONTHLY CHANGE % CHANGE
Cash Accounts $42,670.60 $0.00 0.00%
Retirement Accounts $446,249.97 $0.00 2.03%
Investing Accounts $159.72 $0.00 0.00%
Non-Liquid Assets $503,049.00 $0.00 0.00%
LIABILITIES THIS MONTH MONTHLY CHANGE % CHANGE
Credit Cards $9,504.01 $0.00 0.00%
Student Loan $47,205.47 $0.00 0.00%
Mortgage $297,220.71 $0.00 0.00%
NET WORTH $638,199.10 $0.00 0.00%
KIDS 529 ACCOUNTS
#1 #2 #3 TOTAL
26075.83 $9,178.23 $4,320.52 $39,574.58

I didn’t bother with monthly changes or % changes here since I never did August.  But here’s the recap:

Cash is up – money that is set aside to pay off CC in full, money set aside to pay for the lake house improvements, and we’ve bumped up the emergency fund due to the fact that we now have two mortgages.  We’re going to add another $2250 for an even $10K in emergency money (and we also have a $10K equity line we could tap into if we ever needed to).

Retirement Accounts – Up based on contributions and some very nice market returns.  Wondering how long this upward trend will continue…

Investing Accounts – just our Acorns account.  Eventually we’ll get our retirement accounts fully funded early in the year and then we’ll start adding more to Vanguard each month or pay down my student loan faster.  We’re on the fence about which one seeing as my student loan is fixed at 3%.

Non-liquid assets – The two homes and the boat.  Not counting other small assets we have, such as the two motors we found in the shed of the lake house, the aluminum fishing boat we acquired in the sale or either of our vehicles.  Another reason we’ve bumped up the emergency fund is that our vehicles are starting to get a bit old….13 years on the Accord and 9 years on the Sequoia.  We’re keeping up on maintenance but if something happens to one and we’re out, we need to have cash to buy something else.  I should note that I do think these home asset values are quite low.  I think we could get another $20K out of our main home and $25K out of the lake house – far more once we actually make the improvements that need to be made.  So, very conservative but I’d rather guess low than too high.

Credit cards.  Monthly spending + work spending + lake house renovation items.  Paid in full each month as we’re simply churning for travel miles.

Student loan – just pay down.  I’ve bumped my payment up less than $10 to make it in an even $300 monthly payment.  Not a lot, but enough that will add up over time.  As mentioned above, we have been talking about trying to get rid of this thing.  It’s only at 3% right now, so I know opinions on this are varied, but considering pay down vs. investing currently.

The last item is obviously the mortgages plus an equity line.  We have the cash to pay down the equity line, and that is being done later today.  The first mortgage is around $150K and the second is just under $140K.  The first is a 15 year fixed with 11ish years remaining and each month we pay down the principal by about $1k.  The second is a 30 year fixed at 3.5%.

We’re really tackling expenses as a way to save this month, even with travel this weekend coming up for an out-of-town swim meet.  We’re actually driving down both days (about 2 hours away) rather than stay at a hotel, packing a cooler full of food, etc.

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