Embarking On Our Lifelong Homestead Journey
001. We Said “Yes” to Our Forever Homestead: The Nerves, the Site & the Financial Plan
The average American moves more than 11 times in their life. I read this recently in Ben Falk’s The Resilient Farm and Homestead and, of course, counted up my own: 12 moves if you don’t count college; 17 dwellings altogether I’ve lived in and attempted to make my home.
A few months ago, my husband and I began our search for the place we’d put down roots forever. We live in a sought-after place where second home-owners drop cash and worker bees commute daily to service hot tubs and heated driveways — so, we expected to be on this hunt for years.
We looked here and there with our realtor, trying to convince ourselves that we would be content with just a small garden or six hours of sun during winters that canyons provide, and I’m confident enough in our values and adaptability to believe we would. But for our each of our adult lives, we’ve each had the same vision to create a self-sufficient homestead bursting with life, and anything else would always be a compromise, no matter what other gains were to be had.
Be it the deep clarity of this shared vision, curiosity, stubbornness or the simple appeal of daydreaming and our love of land and possibility, we looked at a property that was out of our price range. For weeks we negotiated with the seller (a story for another post) and to our amazement: We went into contracting.
(!!!) Sweaty. Armpits. Commence.
Most people don’t get too excited until they have a title in hand, and probably that’s wise. But that very day, we invited our loved ones to pizza in town to celebrate, and here I am writing this blog post. Because the journey has begun.
The Nerves
Decisiveness, Confidence and Partnership Combat “Holy Sh*t, Are We Really Doing This?”
The endlessly awesome (as in, extremely impressive or daunting; inspiring great admiration, apprehension, or fear) fact of life is how much it change in an instant. And of course it’s rarely experienced that way, but rather the compass shifts a degree and sooner or later, you’re in an entirely different place than you would have been. It’s hard to comprehend the immediate and rippling effect of our choices (or chance happens), which is why I think it can be so easy to succumb to the status quo. Momentum, and the shear weight of the responsibility that comes with agency.
Existential conversation aside for now, it’s safe to say the decision to offer, counteroffer and ultimately commit — was terrifying.
But even though the numbers were (and are) scary, and the risks and unknowns of the property are multiple, my husband Cooper and I were decisive and confident as we navigated this opportunity, and I chalk that up to this:
Our estimation of the property “value” was ours.
Yes, real estate is potentially a good investment, but we’d set out to find our forever homestead, so our criteria are different. For that, we need some key elements, whether those come with the property, need to be purchased/developed later, or can be sacrificed either in the immediate or forever.
Because we share fundamental values of what we want life to look like and the material elements that would facilitate that, we saved ourselves from a lot of second-guessing that naturally comes with big decisions. Many (though certainly not all) overwhelming questions about what’s truly important are replaced with box-checking.
An added benefit to trusting our own estimation: What looks like junk to some, we quickly recognized as value-add, and we were able to leverage this. If we were more insecure about our values, we might not have been as confident in our negotiations; we might have doubted our ability to embark on such an undertaking of what undoubtedly looks to many like “a lot of work”.
The Site
Holy Sh*t, We’re Actually Doing This, Here.
In future posts, I’ll elaborate on the specifics of this site (so that you have context relative to your own site or vision) but for now, the elements we value in this property are as follows:
44 acres, 27 of which we deem suitable for agricultural use
Wonderfully south-facing with long days of sun
Water rights, a critical consideration particularly in Colorado
Infrastructure including four large greenhouse frames, water storage and some irrigation
Away from noise and light pollution
Neighbors who roll up their sleeves are an added plus; while probably considered “eye sores” for prospects looking to build their mountain getaway, we love that our neighbors are working their land (and presumably won’t be unhappy with our “eye sores” which are inevitable on working farms).
The Financial Plan
Avoiding The Trap; Prioritizing Financial Independence Alongside Our Homestead Journey
Both Cooper and I have been entrepreneurs and full-time employees, so we’ve had drastic fluctuations in income. We’ve both saved at various rates throughout our adult lives, and we’ve both generally avoided debt. We have healthy incomes and excellent credit, and we live well below our means.
All that’s to say: We’re in a really good position to get in way over our heads. That is, just because you can do something — like afford a high mortgage — doesn’t mean you should. With this in mind, we were very conscious of balancing the incredible opportunity this property offered with not locking ourselves into a lifestyle that wouldn’t allow us to enjoy the opportunity.
A little background
In my twenties I became determined to retire by age 35. I thought entrepreneurship that led to passive income was going to get me there. Running my own business for seven years did eventually get me on a good financial path by way of (1) a single client that became my W2 employer and (2) the experience and instinct I developed as an entrepreneur which made me a linchpin.
Somewhere along the way, I got serious about saving a large percentage of my income (which at the time wasn’t much, but it set a habit and foundation). Discovering the financial independence movement has supercharged my financial literacy and determination to stay on this path (even though I won’t get there by 35), which means, importantly, not getting trapped by what we could do.
The Math
After spending a dozen hours doing the math with ChatGPT, I arrived at the following financial plan for paying pack our loan. I’m including rough numbers to make this more tangible, but this approach can and would be adjusted based on your actuals. This is not financial advice; it’s what Paige would do.
The Base Formula: Minimum Loan Payment + Investment Contributions = Monthly Budget (I’m ignoring all other monthly expenses for the sake of this exercise, but that sum also needs to be accounted for as part of your overall monthly budget). I found it helpful to determine a “minimum” monthly investment contribution that I was comfortable with because FI is an important goal to me, as a grounding element I could anchor to in the more detailed numbers game.
Details of the Loan: $500K loan, amortized for 25 years with an (estimated for now) 7.75% fixed interest rate. Ouch. But this loan includes the opportunity to adjust the rate yearly as interest rates change, as well as the opportunity to recast every time we pay an extra 10k toward the principal, in order to lower the minimum payments.
Prioritizing long-term investments, we’ll contribute $4k monthly to brokerage accounts (I use Ellevest and Betterment) on top of my employer-matched 401k contributions. This will compound monthly and make up a majority of our FI (financial independence) number within 10 years.
Leveraging Recasting: After allocating budget towards the minimum loan payment and my investment contributions, I have $700 to spare.
Here comes the rub: Contributing that entire delta towards investments most likely will lead to highest possible returns, at the expense of paying off the loan faster. The other side of the same coin: Paying off the loan as quickly as possible has tremendous opportunity cost; i.e. that money can’t compound and grow.
Balancing two objectives: The math clearly dictates, pay the minimums and invest the rest. But that doesn’t appease the psychological (and, in terms of future loans and expenses that in our case will be required for building a house, practical) benefits of paying off a loan at least a little bit faster.
Where I landed: By putting that $700 “surplus” into a high-yield savings account each month, I get a healthy 4.5% return as it grows. When it reaches $10k, I’ll put that lump sum directly towards the principal of the loan and request a recast to lower my monthly minimum without impacting the overall structure of the loan.
This is important: With a lower monthly payment, my surplus is just a little bit higher, say $126 higher. Now I can put $826 into my high-yield savings account, which means I’ll get to $10k faster and faster every time I recast.
The result: The loan is paid off in Year 11 (vs. 25). We pay approximately $384,030 less in interest than we would if paying only the minimum monthly payment, while sacrificing about 10% of mid- and long-term gain on our investments (which I feel comfortable with based on our FI number and the value of reaching nearer-term goals of building a house and building out our homestead.
I feel great about this approach for us because I have sufficient clarity about (1) our FI number, and (2) values and priorities besides maximizing Net Worth. I leveraged Chat GPT to map out five scenarios which I’ll include summaries of below, ultimately comparing them based on these factors:
The impact the scenario would have on my FI timeline and on my FI number (e.g. if I had to sustain higher monthly expenses for a longer period of time)
The value of my long-term investments after 15 Years, and what % of FI Number that would make up
The value of my long-term investments after 25 Years if I continued investing after Year 15, and what % of FI Number that would make up
The value of my long-term investments after 25 Years if I stopped investing altogether after Year 15, and what % of FI Number that would make up
Five Scenarios for Balancing Loan Pay-off With Investment Growth
As summarized by Chat GPT after spending twelve hours together on this topic
1. Minimum Loan Payment + Investments
This approach focuses entirely on investments while making only the required loan payments. It’s the "slow and steady" route—letting the loan run its full term while leveraging the power of compounding in your investment accounts. While you’ll pay more in interest over time, the larger, consistent investment contributions can build significant wealth by the loan’s end.
Best for: Those prioritizing long-term portfolio growth over minimizing interest costs.
2. Save and Recast (Reinvest Freed Cash Flow into Savings)
Here, you save a small portion of your monthly budget to periodically pay down the loan principal with lump-sum payments. After each payment, you request a recast, which lowers your monthly payment. The freed-up cash flow is reinvested into savings or investments, accelerating wealth growth once the loan is paid off. This strategy balances debt reduction with wealth-building.
Best for: Those seeking a methodical approach to become debt-free sooner while still growing investments.
3. Save and Recast (Apply Freed Cash Flow to Principal)
Similar to Scenario 2, this strategy uses lump-sum payments and recasts to lower monthly payments. However, instead of reinvesting the freed cash flow, you use it to make additional principal payments. This aggressive debt repayment strategy drastically reduces the total interest paid but sacrifices some investment growth along the way.
Best for: Those laser-focused on eliminating debt and saving as much interest as possible.
4. Save and Recast (Freed Cash Flow to Investments)
In this hybrid strategy, lump-sum payments and recasts are still utilized, but freed cash flow from each recast is redirected into investments rather than paying off the principal faster. It blends debt reduction with aggressive investing to optimize long-term growth while achieving early loan payoff.
Best for: Those who want to strike a balance between early debt freedom and maximizing investment returns.
5. Baseline (Minimum Payment Only)
The simplest strategy: pay the minimum loan amount and direct all surplus cash toward investments. You’ll carry the loan for its full term, paying the most interest over time, but you’ll also build a robust investment portfolio by prioritizing maximum contributions.
Best for: Those comfortable carrying long-term debt while focusing entirely on investment growth.
TLDR;
We’ve found our forever homestead: 44 acres with water rights, greenhouse frames, and the space to create the self-sufficient life we’ve always envisioned.
Big decisions like this are daunting, but clarity in our shared values helped us navigate the nerves and negotiate confidently. When you know what matters most, it’s easier to make choices that feel right.
This property isn’t perfect by every measure, but it’s perfect for us. Recognizing potential and aligning it with your vision can help you see value where others don’t.
Financially, we’re balancing two goals: paying off debt and building long-term wealth. Using a “Save and Recast” strategy, we’re saving monthly surpluses, making lump-sum payments to reduce the loan principal, and recasting to free up cash flow—all while staying on track for financial independence.
Starting a homestead is as much about mindset as it is about logistics. This journey is just beginning, and we’re excited to share our experiences—and the lessons we learn along the way—to inspire and guide others chasing a similar dream.
