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Hi! I'm Mike and this is my wife, Jen!  Since we began this site, we've learned to live more frugally, completely eliminate our debts, create new income, radically increase our net worth, and live altogether better lives!  Sign up below for instant access to our members-only toolbox, including our exclusive guide:  15 Steps to Fix Your Broken Finances and Live a Better Life!

Monday
Jun162014

Why I'm Done Worrying About Our Zestimate

As I've pointed out numerous times, our net worth continues to get pummeled, primarily because the Zestimate (Zillow's estimate on the value of a home) on our rental home continues to go down.  I made this chart for my last income report, for instance to show the spread:

All the while, Financial Samurai and others keep talking about recovering housing prices (granted, Sam lives in San Francisco and that market is on fire).  But, I've also read time and again how the Pacific Northwest, where our rental home is located, was supposed to have fared better than many other places.

Something clearly doesn't add up.

So I spent some time recently using Zillow's "recently sold" feature to try to find some comparables that have sold around mine.  For the life of me, I can't account for the difference in Zestimate, say between this house that sold for $242,000 last year (Zestimate of $249,459 at time of writing)...

... and my very similar home (Zestimate for $203,648 at time of writing).  In fact, digging into it a bit more, I find my house actually has better upgrades, plus a fantastic bit of landscaping and outdoor deck / entertainment area.

So, I'm just going to check comparables on my own from now on and establish a Mikestimate for how much my house is worth, which I'm blurting out right now:  $245,000.  This is the value I'm using for my net worth calculation.

I'll update this on my own periodically.  I've lost confidence in the Zestimate for my home and I think it can be arrived at more accurately by looking at comparables.

Any thoughts?

Monday
Jun092014

Rebalancing our Vanguard Portfolio

I spent some time at the end of last month watching CNBC as the markets hit another all-time high.  Having a stock-heavy portfolio has certainly paid off, as we've seen nearly $5,000 in profits with our modest holdings.  That said, I'm no market maven by any stretch of the imagination (and I'd be wary of anyone who suggests that they are), but it seems we're overdue for a correction.  This isn't a "stock picker" site, and I'm not sure how much my logic would hold up to scrutiny, but it seemed like time for me to take some profits, rebalance a bit, and buy a bond fund.  Here's a chart that shows both our old and our new Vanguard portfolio, alongside our monthly contributions, which includes an increase that I'm going to squeeze out by once again reducing our spending.

Plus, as we draw down our P2P accounts for liquidity's sake for our Summer 2017 transition, we're gaining several hundred dollars of additional income each month.  

Once the VDIGX and VGSIX funds reach $10,000, they will automatically shift to the lower-cost Admiral Shares, which we're already enjoying with VTSAX, VTIAX, and VBTLX.

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