Welcome to our December 2023 financial update blog! We are a little late getting this blog published. The new year has started off with a bang and there hasn’t been any spare time to dedicate to writing. 

Our first task of the new year was a planned trip back to California. This trip had been planned for awhile but turned into a dual purpose trip. The main objective was to visit Mrs. RVF’s side of the family as we haven’t seen them in quite a long time. However, in light of our purchase of a nice plot of acreage in Texas we also needed to break the news to them. Yes, we really meant it when we said we are not going back to live in California…….EVER! The conversation went much better than we expected. It’s great to have support from family and friends when big decisions are made.

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On the home building front there have been some major developments. Normally we would do another blog for this, but time is limited right now. As we mentioned in our prior blogs there was a contentious negotiation with a builder for a home. That led us to buying our own land and deciding to build. We had very productive meetings and discussions with that same builder where we talked it out. We all seamed to get on the same page to do a mutually beneficial deal where we get the house we want and he gets to build it.

Well, one thing I learned in business is that once you understand how someone operates you know what to be aware of. While we came to what we thought was an understanding it didn’t mean we were going to put our guard down. Nor did it mean we would just accept everything that was thrown our way without question. We didn’t retire early because we are easily duped or bad with money.

We knew the deal for the other house was more about the money and cashflow for the builder than just selling a home. Because of this we knew that we needed to pay close attention to the numbers and double-check calculations to make sure the math was correct. It’s also important to make sure we are not over paying for stuff or paying for something that’s not our responsibility.

This is where things got interesting and then turned sour in a flash. Once the budget and contract was submitted to us we saw some huge problems. First, we were being charged a builder commission on the property value. We bought the property outright for cash and the builder had nothing to do with that process. His role was to just say “yes, the land is buildable.” So tacking on a 20% commission for the value of someone else’s property is a pretty bold move!

Next, we saw that we were being charged another commission for our realtor. The builder agreed to pay our realtor a finders fee for bringing him the business. However, the builder was now trying to flip that agreed upon fee back to us. In total these charges would have tacked on an additional $30k to our build! Not cool!

As you can imagine this didn’t sit well with us. We conferred with our realtor and made sure we were not misunderstanding the structure of the process, which we weren’t. Soon after we had a conversation with the builder which quickly deteriorated into threats. There was clearly no rational explanation for these charges outside of padding the profit numbers. In light of this and how the conversation went when the issue was brought up we decided this was not someone we wanted to do business with.

It’s frustrating how this turned out, but the one thing we will never tolerate from anyone are threats. If that’s the direction someone takes before we even get started on the build then they are not the right partner for our project. On the positive side, all of this happened so early in the process that ending the relationship was quick and easy.

The process of building a home is long and can be a little stressful as there are always things that come up. However, it is supposed to also be an exciting time. We have been through this once before, albeit on a smaller scale.

It’s fun to watch as a new home springs up from the ground and goes through changes as the build progresses and the excitement grows as you inch closer to moving day. The last thing anyone needs during this time is to worry about the people they hired to do a job. So we will move on and find a better partner for our project.

Our Portfolio Performance December 2023:

Portfolio = $1,428,353

Our Portfolio Decreased By -$19,633 or -1.36% From The End Of November 

Year-To-Date Our Portfolio Has Increased By $103,726 or 7.83%

Net Worth = $1,580,556

Our Net Worth Increased By $69,515 or 4.60% From The End Of November 

Year-To-Date Our Net Worth Has Increased By $200,729 or 14.55%

December turned out to be a great month for the markets. Our portfolio shows a decrease of $19,633 for the month, but this is only because we used a huge chunk of cash to purchase the land in Texas. Market appreciation alone in nearly covered this expense which makes it easier on the eyes when looking at our portfolio.

Because of this purchase the real increase in our portfolio is reflected in our net worth numbers. As a matter of fact, if we had not purchased the land our portfolio would have been back above our original $1.5m fire number. That would have been a welcome site to see after the 2022 disaster!

For year ending 2023 we are very happy to see a 7.83% increase in our portfolio after the land purchase. Who knows what 2024 will bring, but if the fed gets to a point of lowering interest rates we could be set up for a strong run. It could also be great timing on the home front since we will most likely need to take on a small mortgage once the build is complete.

Our Spending for December 2023:

Monthly Budget = $5,000

Total spend for December 2023 = $5,986

Over/Under Monthly Budget = $986

Over/Under Budget YTD = $182

Prepaid Site Fees = $0

Net Over/Under Budget YTD = $424 Over Budget 

Ok, this is where we have some explaining to do. In order to remain consistent we have not included the cost of purchasing our land in these numbers. Obviously that is a huge one time expense, but we want to close out the year showing our actual living expenses. This is more about showing the expense of being retired early and living life on the road than our plans for the future.

December was a crazy expensive month for us. Quite frankly we are shocked that we were only $986 over budget as we expected a far worse outcome. In December our son came to visit and stayed with us for 3 weeks. As if that is not expensive enough we started out his stay by fulfilling a long ago made promise of a trip to Vegas once he turned 21. Let’s just say we had a great time!

Further adding to our expenses for the month was the airfare and car rental for the aforementioned trip we booked to California. Oh, and did we mention that it was also Christmas time and we had to buy gifts? Considering all of this we would say only being $986 over budget for the month is a miracle!

For the year we ended up going over budget by just $424. While we are not happy with going over budget the year just didn’t go the way we planned. When we created our budget we never thought we would end up driving all over looking at houses and buying land. We also never planned to fly to Las Vegas or California and incur all of the expense that came with those trips.

This obviously brings up questions about how we are going to budget for 2024. At this point we have no idea of what our expenses are going to be next year. Our son will be graduating college in the spring so we will be going back to Pennsylvania for sure. The question is will it be in the RV or will we be flying? That depends on where we are at in the home build and our schedule. Now that we are back at square one we don’t have a clue about the timing of this project.

Then we have the uncertainty that comes with the build itself. Surely we will need to make several trips to the property during the build. Once completed we will need to shell out another chunk of cash for the construction and to minimize our mortgage expense. We will also need to furnish the home when it finally gets completed and that could get pricey.

As you can see there are just way too many variables at this point to even attempt to put together a budget for 2024. So for the time being we are going to attempt to hold the line on our $5k a month average spending. It’s really the only thing we can go by until we get more information and clarity on the process we are embarking on.

One thing is for sure, 2024 is NOT going to be a boring year!

That’s a wrap for our December 2023 financial update. Another month and another year is in the books!

Thank you as always for reading our blog and taking time to follow us! We look forward to an exciting and crazy 2024 and we hope you will continue to follow us as it all unfolds.

See you on the road!

Joe

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