After a long week we have finally settled down enough to put together our March 2024 financial update blog. But, as you will see this is only a temporary pause. The craziness that is our lives at the moment is just starting. Buckle up, this is going to be a long one!

The last couple of weeks we have been a whirlwind! We probably made it worse than it needed to be, but we are glad to be settled for the moment. Over the last month or so we emptied out our RV and made several trips to our property to move stuff into storage. We are so happy finally be out of San Antonio, but the fun is just beginning!

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Once our work-camping gigs ended we drove our RV a few miles outside of San Antonio where we put it on consignment. Selling an RV is hard enough under regular circumstances. Living in it and traversing the country at the same time would make it impossible. While going this route is a financially painful move it is the best option for us at this time.

Once the agonizing consignment process was completed we headed North to our property. It was really important that we meet with our builder before leaving Texas to make sure we had our bases covered. This part of the trip actually turned out to be a lot of fun. Since we were in town we took a day to pick out things like appliances, fixtures, tiles and flooring. It was great to go through this process and visualize how our home is going to look. It was even more exciting to finally get something accomplished!

After a couple of days in north Texas we made the long 1,200 mile drive to Utah where we will stay with family. The drive to Utah was supposed to take us a couple of days, but once we got going we didn’t stop. In fact, we only pulled off the road to rest for a couple of hours. We decided to take turns driving and we managed to get to our destination in under 24 hours. Probably not the best way to do it, but that’s what we did.

Our Jeep was completely full with the rest of our belongings which contained some important items. Because of this we decided to not risk getting a hotel as that would have been risking a lot more than just our jeep. There was also no way we were unpacking everything so we drove straight through. Again, not something we recommend doing, but it was the situation we found ourselves in.

Now that we are settled down in Utah we are able to take a breath. We still have a lot on our plate, but at least we can focus on what needs to be done. Like writing our March 2024 financial update blog!

Being in Utah will be a big help for us mentally. While in San Antonio we were being pulled in too many directions at once and it was overwhelming. Every day we were balancing our work schedules with trying to sell the RV, build a house and moving all of our stuff up north. We also loved our group of work-camping friends and wanted to stay involved with the group. It seemed like we always had something scheduled and met up around a campfire. We will miss our friends, but at the same time we are happy to have a break so we can focus.

This peace and quiet is only temporary so we need to enjoy it while we can. If you thought our road trips were over then you were sorely mistaken. That’s because when the end of April rolls around we will be right back at it. Only this time we will not be in an RV however, we will be in a car.

With our son graduating from college in early May we need to be in Pennsylvania. But, here’s where it gets interesting. We also need to be back in Texas the week before his graduation so we can meet with the builder again. So it looks like we have cross country road trip in the works.

You might be asking, “why not just fly?” Well it’s not that easy unfortunately. This is because after our son’s graduation he’s going on a trip overseas. Then once he returns from his trip he needs to be out of his apartment soon after. As a result he needs a place to stay until his job starts in the fall. Considering where he needs to be at that time the east coast isn’t feasible. So he will eventually be joining us in Utah and/or Texas as things progress.

So we get to share another cross country road trip with ya’ll, but from a different prospective. We also get to have one last family road trip when we return west which is so exciting! Also, Mrs. RVF and I will have three weeks alone in PA while our son is gone. It’s going to be very tempting to take some time to venture out. We would love to go to NY and other parts of the east coast. It’s baseball season so a trip to Cooperstown, NY might be in order!

As we said, our lives on the road have not ended! Stay tuned………

That about sums up where we are. A little crazy wouldn’t you say? Let’s move on and get to the financial stuff!

Our Portfolio Performance March 2024:

Portfolio = $1,535,380

Our Portfolio Increased By $44,133 or 2.96% From The End Of February 

Year-To-Date Our Portfolio Has Increased By $107,027 or 7.15%

Net Worth = $1,657,216

Our Net Worth Increased By $20,626 or 1.26% From The End Of February 

Year-To-Date Our Net Worth Has Increased By $76,650 or 4.85%

March was another great month for the financial markets as our portfolio value moved back above our original FI number. Keep in mind this value is also after the land purchase we made in Texas paying cash so we have come a long way.

At this point we feel it’s a good time to give some clarification on our numbers as we have a lot of moving parts. We have always tried to be very transparent with our numbers as we feel that is very important for our readers. Transparency is also important when it comes to a personal finance blog otherwise it’s all suspect and potentially BS.

We are now entering a point in the construction process where our net worth is going to have some sizable deviations from our portfolio. But the construction of our home isn’t the only part of this equation. We also have to prepare for what happens if/when our RV finally sells.

So let’s start with the last point first, our RV. We have always been realistic with the fact that our RV is a depreciating asset. Regardless of the fact that it was our home the reality is the value always goes down. As such, we have always taken steady monthly depreciation adjustments on the asset value. This was important so that our net worth numbers reflected the actual value of the asset in our updates. We felt anything else would have been not only foolish for our records, but dishonest to our readers.

Now that we have decided to consign our RV the reality is that we are going to take a large hit once it sells. This is because of the commission that will be paid upon the completion of any sell. Obviously we don’t know the actual sell price yet. However, since it’s on the market and we know the consignment shop gets a rather large commission we needed to start taking larger depreciation deductions. This is the best thing we can do to try and get ahead of what’s eventually going to happen. This part really sucks, but our circumstances make it a necessary evil. We want to keep our numbers honest and that requires taking the bad with the good!

On the home construction side there are also a couple of parts to the equation. First, we have the construction loan side. This will eventually roll over to some sort of mortgage upon completion of our home. However, the final mortgage amount will not be known until construction is finished. At that time we can decide how out of pocket we want to go or how large of a mortgage we want to take on.

The other side of the equation is the monthly interest that is paid on the construction loan. For those of you not familiar with how a construction loan works here is how it goes.

The builder provides a detailed estimate of how much it will cost to build the home. Then an appraisal is done by the bank and an estimated home value upon completion is determined. This is so the bank knows that the finished asset will be worth the price of loaning the money to build it. Then what is essentially a line of credit is opened which allows the builder to draw funds as certain construction milestones are accomplished. This process is monitored by us and the bank to make sure the work is actually being done before payments are made to the builder.

As the builder draws funds from the line of credit the bank begins charging us interest on those funds. We are responsible for making the interest only payments on that amount until the home is done. Eventually, once the home build is complete, the line of credit is either paid off by us or rolled into a regular mortgage. So our mortgage can be whatever we want it to be at that time.

The good part is that the interest only payments start out very small and are very manageable. The bad part is the interest rates are very high because it’s a short term loan. Also, the more construction progresses the more funds are drawn on. As this happens our interest payments increase substantially. So by the end of the build we will be making a sizable interest only mortgage payment before paying off the line of credit or rolling all or part of it into a regular mortgage.

This is where our numbers come in to the process. In order to keep our books straight, and stay transparent at the same time, we want to disclose how this will be reflected in our reporting. Our plan is to include the construction loan principle amount as part of our net worth reporting. Meaning it will just negatively impact our net worth numbers as the withdrawn amounts build. On the flip side we have to pay the interest only part monthly. This number will be included in our monthly expense amount since it is an out of pocket expense.

Because of these two factors our readers will see that our net worth numbers will not be able to keep pace with our portfolio on a percentage basis. This is because our liability for the construction loan will continue to increase as the build progresses. This will effectively suppress our net worth number. Then, once our RV sells, we will also have a sizable hit to our net worth depending on how accurate our process of accounting for the depreciation has been. But we won’t know for sure until that actually happens

Once the house is done we can then realize the appraised value of the home. Based on the estimates there is a good chance it will all balance out in the end. But again, we don’t really know until that actually happens.

Hopefully this all makes sense because it the best we can come up with for now.

With all of that out of the way let’s take a look at our spending for March 2024.

Monthly Budget = $5,000

March Spending = $7,367

March Over Monthly Budget = -$2,367

YTD Over Budget  =  -$2,429

As our readers know by now the first half of the year is always bad for us due to semi-annual and annual expenses coming due. So it’s no surprise that we are already in the hole after just three months. However, this time it’s a little different.

We have been pretty good when it comes to our unplanned spending. But with the home build there are a lot of things that are out of our control. In March alone we had to layout almost $3k in expenses. This was necessary to get the water and electric metering up and running at the build site. We probably could have had the builder draw the funds as part of the construction line of credit, but we decided to pay in cash out of pocket.

On the bright side by paying for these items ourselves we sped up the process. This also means a little less money gets drawn on the credit line which means less interest expense. It’s the equivalent of making future principle payments when the credit line converts to a regular mortgage. So money saved in the long run.

If we back out the house related expenses and just look at our core numbers we managed to stay under budget for the month. This is really impressive if we look back at where we are usually at by this time of the year. Even more so because we had to rent vehicles in order to move our belongings up to our storage which wasn’t cheap. In fact, it was pretty damn expensive! All in all we are doing what we can to mitigate our out of pocket expenses.

Looking forward we expect more of the same for April. As we said we need to go across the county while making a stop in Texas. The cost of traveling and hotel stay will be sizable, but necessary. Hopefully we are past most of the out-of-pocket expenses related to the build and only have to worry about the line of credit interest going forward. But, we should be prepared as there is always something.

Well, that’s a wrap for our March 2024 financial update! Maybe we should call it our life update at this point?

Thank you as always for reading and following our blog. We look forward to sharing this experience with everyone as we progress on our build. We are also excited to share the cross country journey that will start at the end of April.  

See you on the road, or maybe just around town.

Joe

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