Welcome to our July 2024 financial update! It’s only been a couple of weeks since we posted our June 2024 financial update blog, but a lot has happened in that time.

It looks like we really getting down to the nitty gritty with our Texas home build. Last we saw the interior pieces are starting to come together. And as far as we can tell, at least through FaceTime, everything appears to be working out as planned. That’s a little weight off our shoulders. Not being on site to see everything person had us second guessing some things.

In our June blog we said we were considering options so we could be in Texas permanently. With the progress made over the last couple of weeks we revisited our build timeline which gave us a better idea of our completion date. After doing the math we have decided to pull the trigger and head to Texas permanently soon.

We considered making one more round trip drive and then a final drive to Texas closer to our completion date. However, at this point it’s actually cheaper to stay in a hotel in Texas for the last few weeks than making two separate drives.

This has brought up our excitement level considerably. It will be great to be close to the build and see the completion. It will also be much easier to finalize everything and move in once all is said and done.

The one thing we are not looking forward to doing is that drive from Utah. It’s already a horrible drive and it will be even worse in our little Jeep. When we drove the Jeep to Utah we had to stop eight times for gas! So that’s going to suck!

With that, let’s take a look at our portfolio as of month ending July 2024!

Our Portfolio Performance July 2024:

Portfolio = $1,565,268

Our Portfolio Increased By $29,116 or 1.90% From The End Of June 

Year-To-Date Our Portfolio Has Increased By $136,915 or 9.59%

*Net Worth = $1,366,861

*Our Net Worth Decreased By $30,645 or 3.29% From The End Of June

*Year-To-Date Our Net Worth Has Decreased By $213,694 or 13.52%

*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.

Now that we have reached a certain percentage completion it’s time to start maneuvering to get everything in line financially. Our portfolio has been set on cruise control as we have most of our investments in “set it and forget it” type mutual funds. However, we are in that period where reviews are being done and approvals are needed. So we really don’t want any crazy moves at this moment. Which is exactly what happened when August started.

If you remember in our last blog we laid out three different options we were considering for financing our home.

1. Pay for it all and be done. We have the money, but this could possibly have large tax consequences.
2. Pay a large amount and finance a little. This choice could still have possible tax consequences, but any mortgage payment would be easy.
3. Pay just enough. We could avoid any tax possible consequences using several withdrawal options. But, this would require more financing which is not something we really wanted to do. On the bright side we keep more money growing which might be better for the long run.

After having more discussions and getting some clarity that decision has pretty much been made for us. It turns out the down payment requirement on a custom build home is a little different than buying a house on the open market. At least for a custom home in Texas and for people who live off investments and don’t have jobs.

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.

This isn’t good or bad news for us. It just changes the math and pretty much forces us into option 2. We might have to take a little bit of a tax hit, but that hit might also be offset by the cost of building our home. We will find out when tax season rolls around.

On the bright side, our home equity should be around 50% depending on the final appraisal.

Spending numbers for July 2024:

Monthly Budget = $5,000

May Spending = $6,868

May Over Monthly Budget = -$1,868

YTD Over Budget  =  -$20,964

There is nothing to really report on the spending front. We continued to incur a lot of travel expenses and other expenses related to the house. This isn’t going to change anytime soon. As we head back to Texas will be living in a hotel for awhile. Even when our house is finished we have to furnish it so there is no end in sight for our overspending.

At this point the only thing that can really have a positive impact on our expenses is if our RV finally sells. Yes, we are still trying to offload our RV! It’s becoming quite a pain in the ass to be honest. So far we have received nothing but low ball offers and we continue to hold out. Once the house is done and we are past this financial phase we will need to revisit how we are going about this process.

That’s about it for our July 2024 financial update. We are very excited to get out of Utah and our next update will come from Texas! By that time our house could be close to move in ready if not completed.

We can’t wait to finally get all of this behind us and back to enjoying life a little more.

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

Joe

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