August 2017 Financial Update

Greetings from Raleigh! We are back home after nine weeks in Europe.  School is back in session and fall is just around the corner.  Our five year old started kindergarten and we are transitioning into empty nesters. At least on weekdays between 8:30 AM and 2:45 PM.

Our financials for the month were once again wonderful.  Once I arrived home from Europe, I deposited an accumulated stack of checks from the blog and elsewhere which led to a superb monthly income of $6,281.  Expenses were tiny at just $1,390 in spite of spending two weeks of August in Europe and picking up a ton of back to school supplies and clothes.  Our net worth crept up another $8,000 to $1,890,000 – another all time net worth high.

 

Income

Investment income totaled $263 for the month.  Almost all of that comes from my recent Vanguard Total Bond Market purchases.  The bond fund pays interest on a monthly basis.  The majority of our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  During other months investment income tends to be much smaller.  We are well on our way to earning roughly $30,000 in dividends for 2017, as we have in the past.

Blog income, shown as “other income” in the chart, increased to $4,262.  In August I deposited checks from advertisers that arrived in our mailbox during June and July, so the blog income for August is higher than usual.

My early retirement lifestyle consulting exploded to $1,197 for the month. This meteoric rise comes after a $0 revenue month in July. Things average out.  I was pretty slammed with consulting clients in the last couple weeks of August. I think they all waited until I returned home from Europe.  So far September is going slower (which is great – I’m retired after all!).

I had to postpone a consulting session when we stayed in the countryside outside Koblenz. Internet was literally slower than dial-up speeds (as in single kb/s).

I had to postpone a consulting session when we stayed in the countryside 15 minutes outside Koblenz. Internet was literally slower than dial-up speeds (as in single kb/s).  At least we didn’t go hungry nor lack for scenic rural landscapes.

I racked up $522 in cash back from the Ebates.com and Mrrebates.com online shopping portals.  Most of that was referral income from people signing up through this blog.  But I also landed several large bonuses related to travel booked in Europe (they often pay out once you complete the travel, not when you pay for it).  If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  When shopping online, I always check to see if I can score some extra cash back by using one of those online shopping portals (and it usually pays off!).

I had several miscellaneous bits of income including a $20 travel reimbursement from the travel agency I used to book a Hertz rental that fell apart at the last minute. I had to rebook at a slightly higher rate and the travel agency refunded me the difference.  I received a $10 cable/satellite refund for the credit balance on my account when I cancelled internet back in June in preparation for being away from home all summer.  The healthcare/medical $5 bit of income is a refund from my primary care doctor.  They charged a $5 copay but the insurance covered 100% as a preventative visit so I owed nothing out of pocket in hindsight. I think this is the first time a healthcare provider has automatically refunded a credit balance on their own initiative without me begging and pleading for return of my money.

august-2017-income

If you’re interested in tracking your income and expenses like I do, then check out Personal Capital (it’s free!). All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital. We have accounts all over the place, and Personal Capital makes it really easy to check on everything at one time.

Personal Capital is also a solid tool for investment management. Keeping track of our entire investment portfolio takes two clicks. If you haven’t signed up for the free Personal Capital service, check it out today (review here).

 

Expenses

Now let’s take a look at August expenses:

august-2017-expenses

Spending dropped to a modest $1,390 during August.  That’s almost $2,000 less than our budgeted $3,333 per month (or $40,000 per year).

 

Groceries – $357:

We were only home for two weeks in August but we bought a lot of groceries to restock our fridge, freezer, and pantry after being gone all summer.  We also threw a birthday party/sleepover for our eleven year old daughter and combined that with a welcome home party for ourselves and several of our friends.  So there was a small bump in spending for the nacho bar ingredients and a couple cases of beer.

I used Raise.com to buy some discounted gift cards to save even more on groceries and at Walmart.

 

Taxes – $300:

Quarterly estimated state taxes.  I paid it a little early to meet the minimum spending requirements on my Chase Ink Business card (and snagged a sign up bonus of $800 worth of Ultimate Reward points in the process!).  Check out credit card bonus offers if you like free money and free travel as much as I do!

 

Travel – $292:

We spent the first two and a half weeks of August in Berlin and Koblenz, Germany and Amsterdam, Netherlands.  The $292 travel spending is mostly groceries but also includes some restaurants, gas for the rental car, local transit, and family admission to Eltz Castle near Koblenz.  All lodging and intercity train travel was paid in previous months.  We saved a ton of money by staying most places for a week at a time and renting through Airbnb.

Travel spending for the month was probably several hundred dollars higher than reported here due to the way I tracked expenses. I withdrew hundreds of euros from the ATM in June and July and we ended up spending those euros in August to deplete our euros on hand before returning to the US.  The expense showed up in June and July.

Our $10,000 budget for nine weeks in Europe turned out to be doable.  Though I don’t have a total trip expense summary down to the penny, it looks like we spent about $8,500 for the nine weeks in Europe (not including around $6,000 in free airfare thanks to redeeming United frequent flyer miles).  We ate out a little less than expected which meant the $40/day food budget for a family of five was no problem.  We didn’t cut costs on groceries though.  We probably spent a little less than budgeted on attractions and admission fees since there was usually a significant discount for family admissions and at some places kids were entirely free.

Eltz Castle - not far from Koblenz.

Eltz Castle – not far from Koblenz.

Amsterdam was one of the more expensive places we visited in Europe. But the canals were worth it!

Amsterdam was one of the more expensive places we visited in Europe. But the canals were worth it!

We had to rent a car to get to our rural Airbnb near Koblenz which let us cruise around the Rhine river valley.

We had to rent a car to get to our rural Airbnb near Koblenz.  Having the car meant a pair of wheels to cruise around the Rhine river valley.

And the Moselle River.

And the Moselle River. Those are vineyards climbing the hillside on the right hand side of the photo.

More

More Moselle. Our airbnb was located between the Moselle and Rhine rivers in the village of Mariaroth which dates back to the 1200’s.

 

Clothing/Shoes – $250:

Though we don’t usually do “back to school clothes shopping”, the need arose this year.  After walking (and hopping and skipping and jumping and climbing) hundreds of miles this summer, the kids’ shoes and sandals were in varying stages of decay.  We also picked up an assortment of clothes for all of us to replace stuff we wore out over the summer (or outgrew, in the case of our three growing children who seem to have overlapping growth spurts).

Lots of walking = time for new shoes. Here we are strolling down the Rhine River in Boppard, Germany (near Koblenz).

Lots of walking = time for new shoes. Here we are strolling down the Rhine River in Boppard, Germany (near Koblenz).

Downtown Berlin along the River Spree. Very quiet and scenic.

Downtown Berlin along the River Spree. Very quiet and scenic.

 

Education – $69:

Run of the mill back to school shopping. Notebooks, binders, glue sticks, pencils, markers, and index cards.  Mixed in with this shopping were some important lessons on getting value. Walmart had name brand Five Star notebooks and binders that were around 100-150% more expensive than the generic store brand equivalents.  The kids helped us pick out the less expensive store brand products. Otherwise we would have spent a couple hundred dollars on school supplies.

We didn’t go for the $125 recommended graphing calculator for our new middle school student. Her older sister has one that’s not used all the time and we have an older model graphing calculator from my college days.  We may eventually have to buy a graphing calculator but there’s no rush right now.  My hope is that phone apps eventually replace the need for an expensive, limited use item.

Each night Berlin projects a historical documentary/light show on the wall of this building. Sit on the steps along the river behind the Reichstag for the best view.

Each night Berlin projects a historical documentary/light show on the wall of this building. Sit on the steps along the river behind the Reichstag for the best view.

Once a symbol of divisiveness, this segment of the wall acts as a canvas for artists.

Once a symbol of divisiveness, this segment of the wall acts as a canvas for artists.

Section of the Berlin wall still standing in the center of downtown Berlin.

Section of the Berlin wall preserved in its original location in the center of downtown Berlin.  To the left is the “Topography of Terror” – a museum/memorial documenting the atrocities of the Nazi regime. It’s situated on the former site of the Gestapo headquarters.

 

Restaurants – $42:

After we returned to the US we had to indulge a bit.  $42 equals one visit to our favorite Chinese/sushi/Mongolian grill/pho buffet restaurant.  Our oldest two kids now pay adult prices so the cost for a meal is creeping up for our family.  The food was better than it usually is, or perhaps we were missing it a lot after several months away from home.

Meals at restaurants in Europe are included under the “travel” category of expenses.

Preussen Park in Berlin. Every weekend this place turns into a Thai street food market. Entrees for €5 and small dishes €1 (about USD$6 and $1.20 respectively).Preussen Park in Berlin. Every weekend this place turns into a Thai street food market. Entrees for €5 and small dishes for €1 (about USD$6 and $1.20 respectively).

 

Gasoline – $35:

Apparently I left the minivan sitting on “E” when we left for Europe.  I filled the tank up in August and I’ll have to do so again in September.  I tried to top off the tank when there was a feared gas shortage in North Carolina but prices had already shot up by $0.20+ per gallon.  So, in a reaction to market prices, I “conserved” resources and skipped the top up until gas prices stabilize.

 

Healthcare – $16:

Our ridiculously cheap Affordable Care Act-subsidized health insurance plan.  Without subsidies it would be over $800 per month.

The political debate over the future of the Affordable Care Act continues in the United States.  The Trump/GOP hardliner effort to completely repeal the Affordable Care Act has withered and died on the vine.  Maybe it will happen eventually and I’ll lament the loss of my huge subsidy.  But the latest I’ve heard is a bipartisan health care bill will be coming from the Senate pretty soon that might actually be able to pass into law.  Included in the bill will presumably be fixes and tweaks to keep the health insurance market under the ACA from spiraling out of control with high premiums and lots of uncertainty for insurers and insureds alike.  Stay tuned!

Bears! The symbol of Berlin.

Bears! The symbol of Berlin.

 

Cable/Satellite – $14:

Upon returning to the US after a couple months in Europe, I signed up for new internet service from Spectrum.  As a new customer I managed to secure a low rate of $14.99 per month.  For that price tag I’m receiving 30 mbit/second download speeds and 4 mbit/second upload speeds with no data caps.

I found this beautiful town while exploring Streetview on Google Maps. Basically zero tourists.

I found this beautiful town of Kobern-Gondorf while exploring Streetview on Google Maps. Basically zero tourists.

 

Year to Date Living Expenses for 2017

august-2017-expenses-ytd

We have spent a total of $17,323 for the first eight months of 2017.  That is $9,000 less than our annual spending target of $26,666 budgeted for the first eight months of the year.  We aren’t clipping coupons and rewashing ziplock bags.  Instead, I feel like we’re living a pretty luxurious $100,000 lifestyle on under $40,000 per year.

Fall is usually a low-spending time of year. Things slow down for us once the kids are back in school.  Mild weather translates to minimal heating and cooling bills.  The weather outside is near-perfect for several months so we tend to enjoy tons of free outdoor activities like tennis at the neighborhood park, long walks, hikes, lounging outside with a good book, and backyard campfires.  Too much free/cheap awesome stuff to do!

With a $9,000 budget surplus for the year and only four months remaining, I’m fairly certain we will close the books on 2017 with a sizeable sum remaining unspent in our budget.

We are on the lookout for some last minute travel options and found a good deal on a few days at Atlantic Beach, North Carolina in September.  The trip won’t cost much since I’m using Chase Ultimate Reward points to get two free hotel nights.  We’re dodging hurricanes here in North Carolina but so far it looks like our beach plans will survive.

 

Monthly Expense Summary for 2017:

 

Net Worth: $1,890,000 (+$8,000)

It seems like every month I watch our net worth creep up and up and up.  August was no different with an $8,000 gain to bring our total net worth to $1,890,000.

august-2017-net-worth

In an effort to slightly reduce risk in my investment portfolio, I’ve been slowly selling appreciated stock investments and moving the funds to the Vanguard Total Bond Market index fund.  In August, I moved another $20,000 to the bond fund.  Right now the bond fund sits at roughly $110,000.  That sum along with almost $40,000 in a money market account will be sufficient to provide our living expenses for at least four or five years should the next recession and stock market crash happen sooner rather than later.

Don’t get me wrong – we will still lose several hundred thousand dollars in the next market correction.  There’s still a lot of inherent risk that comes with investing in equities. But the shift to a small bond allocation will allow us some certainty in where our next several years’ living expenses will come from.

The luxury of an increasing net worth is that we can more easily handle a massive drop in net worth, should one happen.  We’re growing a large margin of safety that should ensure that we never run out of money in early retirement.

 

I'll leave you with this picture that makes money talk seem small. There's a city block in Berlin entirely covered in these rectangular blocks. Almost 3,000 in total.

I’ll leave you with this picture that makes financial talk seem small. There’s a city block in Berlin entirely covered in these rectangular coffin-like concrete structures. Almost 3,000 in total.  It’s the Holocaust Memorial.  Approximately 6,000,000 Jews were killed by the Nazi regime during the Holocaust. It’s daunting to conceptualize what six million looks like. To put it in perspective, imagine that each of these concrete blocks represents 2,000 murdered Jews.  If you spent a minute at each block it would take you two full days to get to the last block.  Pretty mind blowing to think this kind of atrocity was inflicted on mankind by a regime based in what is now a very peaceful Berlin.

 

As far as the blog goes, I have slowed down with posts lately.  Life gets busy!  Coming up, I have a few finance-related blog posts in mind and several trip reports from our summer in Europe.  I just renewed the Rootofgood.com domain for another year and I’m about to migrate the blog to a new host in a week and sign up for three more years of hosting at the new place, so don’t worry – I’m not abandoning this little project yet.  During the migration you might experience weirdness here but hopefully that will be temporary.

That’s it for this month’s financial update.  Now that the kids are all in school during the day we are enjoying a lot more peace and relaxation.  I’m finally getting more hammock time with a good book.  A few years ago I wrote about my weekly schedule as an early retiree, and it’s still about the same today.

Looking forward, we are still trying to figure out what crazy adventure we’ll undertake during the summer of 2018.  Mexico? Eastern Europe? USA road trip? Or perhaps be lazy and stay at home?

 

 

I’m starting to think of year end financial moves I need to make like taking cap gains and converting traditional IRA to Roth to keep my ladder going.  Any big year end plans for your finances (or life in general)?  

 

 

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65 comments

  • I loved seeing the pics of you in Europe and to spend only $8,500 with your whole family for 9 weeks is incredibly impressive. I can’t wait to plan a vacation like this with my family. Are family is still expanding so we’re not quite ready to make the leap but when we do I’ll definitely be taking advantage of every travel hack available 🙂

  • Those pics ar awesome! I especially love the one of the kids in front of the bear statue. Your son looks so happy ????.

    It looks like y’all had an awesome time. And I’m super, crazy impressed that it didn’t cost you more than that to travel. Every time I see people travel for so little I want to learn and use this tricks!! We’re a family of 5 also, and I’d love to travel like that!

    It’s great how much you’re saving, despite traveling. And very impressive, really. I’m looking forward to more posts on your trip. Hoping to glean some good tips to save for later!

  • I love seeing how many people find that their net worth increases as they hit FI!

    I really enjoyed following along with your trip to Europe. It is inspiring for those of us who are on the FI track!

  • Do you know of any similar minded financial groups in Raleigh? We live in Raleigh as well.

    • There’s a “Triangle on FIRE” group in Raleigh/Durham that meets several times per year. That’s probably the best bet for a FIRE-focused meetup. Plenty of investment clubs, real estate clubs, etc but I don’t personally know much about them. I’d search around on facebook or meetup to find those.

  • Stellar month RoG! You blog income is really incredible… almost as incredible as your low spending!

    Like your family, we have several years worth of cash and non-market correlated investments to see us through the next market “crash”.

    I suspect we’ll both end up a little richer on the other side of it!

    • Yes, probably so. I just hope I can take advantage of all the lower costs during the next recession and not feel the pressure to reduce expenses (which is a totally natural feeling during a recession – everyone else around you is cutting their expenses!).

  • Europe for Five on $1,000 a week. Sounds like a blog title that could be made into a book. Of course, that would require you to write a book, which sounds like a lot of work for a retiree.

    Next year? Maybe try South America or the western USA. We’re starting to plan some 3-week trips as part-timers. Looking forward to a more relaxed pace to our vacations.

    Did you know your net worth is identical to the 1500s now (see sidebar http://www.1500days.com/) ? Within $5,000 anyway, which is a rounding error.

    Cheers!
    -PoF

    • Poop. I have to update mine. I’m over $1,900,000 now. But who’s counting and who’s competitive? Shit, it’s me. I’ll be better adjusted someday. Or not.

    • I thought about writing an ebook about the trip (and doing it on a budget, with kids). It sounds like too much work though 🙂

      South America and western US are both on my list. I’m a little concerned about it being too cool in some spots in S America (love to go back to Argentina, for example) and too hot in southwestern US.

      I’ve been watching Mr 1500 for many years now. Our net worths have moved in lockstep it seems but he’s always just a tad ahead of me 🙂 That’s okay – we’re both wealthy enough that we don’t have to worry about finances too much.

    • I second what Dr. POF said, ROG. Travel hacking is something I haven’t learned. You should put out a “idiots guide” on this subject, so novices like me can learn. Well done on the superb blog income, wow! Now that’s another area I need to learn from you! Do you do tutoring?

  • Welcome back! Congratulations on a successful month of blog income and net worth increase. It always amazes me how you and you family can maintain such a low level of expenses, especially when it comes to food.

    Our food budget exploded last month at $850 for 3 adults and one toddler. We were in shock to see the number and are trying to cut costs. >.<

  • Welcome back!

    Regarding your calculator comment, I think phone apps can already replace them, but schools won’t allow it because students can Google for answers on their phone during an exam.

    • That’s what I’m afraid of, so buying a calculator may be necessary. The school has tons they can use during class and probably exams so I think we’ll be fine for now.

  • Thanks for all the great pictures from the place where I was growing up (Koblenz).
    Nine weeks in Europe below $9.000 for a family of five is absolutely fantastic.

    All the best,
    Machinist

  • Great that you’re back! Your trip looks really nice so far. Congratulations on a successful month of income and net worth increase. It is fantastic to see the five of you can live at such a low level of expenses, enjoy life, travel, enjoy nice food. You’re such a good example and motivating a lot of people!
    Would you also do your retirement consulting service for people living in Europe? I am a German living in France.
    Best,
    Carola

    • I’ve done several consulting sessions for those with overseas interests (living there and/or investing there) so I might be able to help. If you want to shoot me an inquiry for a session and specify in the comments section specifically what you want to discuss I can provide feedback on how helpful I can be. My investing knowledge and tax knowledge is from a US perspective but many aspects of FIRE aren’t country-specific.

  • Travel hacking really pays off doesn’t it? I wish I would have started sooner. Saving 6k on flights is huge. For lots of people that is the difference in doing it or not.

    We just got back from Europe too thanks to travel hacking the tickets. It spurs me to do more. I would love for you to talk more about what you are doing for hacking.

    What a great rate you got for internet. Jealous.

    Glad you had a great trip

  • I’m happy to hear that you all had a great time in Europe and that your finances aren’t doing too bad, either! I can’t believe the kids are back in school already..

    Thanks for continually being an inspiration to keep going on this FI/RE path. I think, after years of hard work, next year I will pay off my remaining debt (outside the mortgage) and will finally be able to start saving/investing (rather than debt payoff at $1,000/month or so). Your blog helps me feel that it’s all worth it. Then I can travel anytime I want and get those amazing travel deals, too. 🙂

  • We lived in Germany for 4 years in Heidelberg. Seeing all the photos made me miss it! There is a white wine gelato sold in one of the little towns you passed through. I’ve tried to recreate it at home eith no luck! Glad you guys had fun! We did 4 weeks of travel this year, and looking at 8 weeks for next year.

    • White wine gelato? Sounds genius! 🙂 Didn’t see that while we were in Germany. But the wine was certainly delicious. I now have a “favorite” wine region with the Moselle/Rhine wines.

  • Regarding your day-to-day activities, what do you do all day? I have kids so I know about that. You’re obviously not spending a lot of time shopping and buying things. What’s a typical weekday and weekend day look like for your family?

    • Here’s a link to a rough outline of my weekly schedule (it varies a ton from day to day and week to week of course!). Lately we’ve been getting the kids to school, having breakfast with the youngest, then following that up with a long walk or playing tennis. We’re usually back home by 10 – coffee and maybe breakfast, some Netflix or chores around the house. Or lay in the hammock and read. Lunch. Before long we pick up the kids. Mixed into all this is volunteering at school, my blogging and consulting efforts, bigger house-related DIY projects, etc.

      • Thank you, Justin!

        My wife often worries that we’ll be sitting around being bored all day. I disagree. In my opinion she thinks that because she doesn’t have very many interests, however I see that problem going away once you eliminate work.

  • Thank you for sharing your photos from Europe, it looks like your family had many memorable experiences.

    Vanguard’s total bond market hasn’t done that great this past year. However, I’m wondering if this is actually a good time to buy. I don’t know how govt. relief efforts work but it seems like raising interest rates might make it more costly to repair the damage and thus the Federal reserve won’t raise interest rates for awhile? What is your view?

    • I have no clue which way rates are headed. The Total Bond Market fund is an intermediate term bond fund so it will be moderately impacted by changes in interest rate. Interest rates are slightly lower compared to when I first bought the bond funds, so I’ve experienced a small level of capital appreciation.

  • Welcome back to the USA! Our big 2017 financial plan is to buy a house. We have left expensive Denver and moved to much cheaper Rochester, NY. We should spend a fraction of what we would have spent in Denver. Looking forward to hearing about the North Carolina coast, it’s on my list.

  • The building blocks of your financial wealth really are put into perspective with the concrete blocks from the Berlin photo. It is stuff like this that puts a whole lotta perspective into how we live our lives.

    Enjoyed all the photos from the trip a lot. We retire next year and 2019 will be a major EU trip. We’ll do well to keep costs down as you have masterfully executed. We will get some relief by staying with family/friends across various parts of the UK for 2 weeks during that trip, so there should be no excuses for spending a ton in the UK…..well other than beer, fish&chips, great Indian food etc….not necessarily in that order!

    Welcome back to “Merica!

    • At first I thought the concrete blocks as a memorial was kind of a silly design but then I started to realize the immense scale of it was about as close as you can get to conceptualizing the immense scale of the deaths.

  • Looks like you’ll have a lot more time with all the kids in school now. Our kid went back to school last week and life is so much easier. It’s fun to have him at home, but all day is too long.
    Your travel budget sounds reasonable. That’s less than what most people in the US spend just staying home. I’m looking forward to more pictures.

    I never had a graphing calculator even in college. I think the requirement was just a scientific calculator and you have to graph it yourself.

  • OK so lets get to the serious stuff where is this Chinese/sushi/Mongolian grill/pho buffet restaurant you speak of? I live in Greensboro but come to Raleigh often. We host international students from China and my wife is from the Philippines. We would all love to go to a place like this. 🙂

    • Hibachi China Buffet in Raleigh. It only has 3-4 stars out of 5 depending on which review site you look at, so it’s YMMV in terms of taste (though from skimming the reviews it seems some people are dissatisfied with the buffet format in general which cost the restaurant some stars). I usually get a pile of steak from the Mongolian side and some lo mein from the buffet and go from there. Grilled steak and lo mein is hard to beat 🙂 Also note that the price jumps a lot on evenings and weekends (closer to $12-13/person I think instead of $8 or so).

  • Wow looks like an awesome summer…good food and awesome scenery, all except the slow internet speed 🙂
    $250 is still pretty good for clothes shopping for 3 kids. I’m sure they’ll be missing Europe and day dreaming while in school. I like your strategy re: slowly moving into bonds to prepare for a correction. It’s important to try and predict the future a bit more I suppose when you’re retired and that regular paycheck is not coming in.

  • So happy for another blog post, and wow did you and your fam rock Europe! Congrats on your net worth increase. Wootwoot!!

    My financial goal for the rest of the year is incredibly simple: knock out the remainder of my masters degree student loans. Those buggers are holding back my wealth building. Next year, max out SEP IRA contributions and pay extra on home mortgage.

    How are your food costs so low?! (I ask this as I’m sitting in Starbucks, oh the irony….)

    • I rarely go to starbucks 😉

      We shop at low cost grocery stores for the most part. Aldi is a huge deal in this regard. Otherwise, we’ll occasionally shop grocery store sales for their loss leaders.

  • I very much enjoyed your travel logs. The pictures brought back fond memories of living in Austria before the fall of the Iron Curtain. I’m not sure I can replicate your travel budget (Mrs. Oldster is a “room service” addict), I would enjoy making the effort.

    Thanks for all the sharing Justin, and welcome back.

    • I had to look it up. Apparently parts of Vienna/Austria were behind the Iron Curtain? I didn’t realize that but I guess it makes sense if administration was split up between the four parties like in Germany.

  • Man, you guys are living really well on that budget. $10k for 9 weeks in Europe is fantastic. We spent about that much, with some travel hacking, on maybe 5 or 6 weeks abroad over two trips.

    Still lots to learn in the ways of frugality, right?

    We went to some of the same places recently: Berlin was amazing and we were surprised by how cheap the food was, too. Loved being able to walk through the city with a beer in hand.

  • “I tried to top off the tank when there was a feared gas shortage in North Carolina but prices had already shot up by $0.20+ per gallon. So, in a reaction to market prices, I “conserved” resources and skipped the top up until gas prices stabilize.”

    This line of thinking doesn’t seem rational or logical. You “saved” maybe one or two dollars (based on not topping off 5-10 gallons). I don’t understand how piece of mind isn’t worth two bucks. What am I missing?

    • I still had 5/8th of a tank left (so several hundred miles of range). We don’t drive a lot so I didn’t feel like paying higher prices.

      If I was still working or had a strong need for more range I’d top off and pay the extra $.

      • Also, since there was bit of a fear of supply, it was nice of him to not top it off. I have no idea if that was any part of the motivation, but it was a nice by product. 🙂

        I also live in Raleigh and I work my (corporate) job from home, but I actually filled up, so no judgement here.

  • You can buy individual bonds thru Fidelity for $1 per bond. Bond funds carry pretty high risk of loss if rates increase. With individual bonds you can just hold to maturity. You can fever 1-3 year bonds so you aren’t locked into low rates too long.

    • Those bonds lose value too while you hold them. Holding a bond fund long term means you’re still owning all those bonds as they mature so you get the same benefit. I’m buying Vanguard Total Bond Index which is probably an intermediate term bond fund. One could go with a short term bond fund if they were scared of interest rate increases. So far the interest rates have decreased since my purchases and I’ve enjoyed a few percent of capital appreciation but I’m not counting on that long term.

      • You only lose “value” if you try and sell them before maturity. If you hold them to maturity you get the full value back. And if you hold only short term paper as he suggested you when you roll them over for a new bond you get the new higher rates. Bond funds can be very tricky and you can definitely lose a lot of money in them if rates go up substantially. Just say’in. 🙂

        • I’m not a bond guy. The returns are too low for me. I put my parents money in bonds because they don’t want any losses. They are getting about 2% for a 2-3 year bond. If rates go up a lot, the still collect 2% on their money and at the end if 2-3 years they get their $10k back. If they were in a bond fund their $10k investment would lose value if rates increased.

      • Also forgot to make this point (not to get too nit-picky ) regarding your statement:
        “Holding a bond fund long term means you’re still owning all those bonds as they mature so you get the same benefit.” actually doesn’t hold up if other holders in the bond fund are forced to sell (or just want to sell) as then the bond fund “must” sell some bonds that were only paper losses but then become real losses to return the cash to the fund sellers. Note: I totally agree with your moving some funds to bonds/cash to cover short to intermediate term expenses (but also to have some dry powder if you are lucky enough to be able to buy stocks at lower levels).

  • Do you cancel the Chase Ink card before next year’s anniversary date to avoid another $95 annual fee? Thank you.

  • Excellent trip; glad the whole family is back safe and sound.

    Recently moved some regular IRA monies into a Roth IRA at Vanguard. Would like to do more before hitting the age for required distributions in 7 years or so. Maybe when I do my taxes in April I won’t like the tax bill, but if that is the case I’ll just recharacterize it back.

    Although I had good credit cards for my needs (all have good rebates attached to them), you more than anyone got me looking more aggressively at card hacking. I am almost finished with the three month deal on my new Chase Sapphire card (50K points if you spend $4000 in the first three months), and AARP sent me an attractive offer (spend $500 in three months and get $200 back, a 40% return!). Will be looking for others going forward. Thanks, my friend.

  • Stellar photos and awesome financial update! Great to see that you enjoyed your trip in Europe! What’s next?
    B.t.w. have you ever realized that if your net worth would half due to a major crisis, you’d still be OK from an expense viewpoint (assuming a 4% withdrawal)? How good is that?!

  • Loved your summary of the tour. I myself just started to working toward FI. Every blog post you write inspires me to pursue for the goal.
    BTW did not know you guys will be touching Berlin during Euro trip, otherwise I would love to meet you and give a tour around the city. As I am from Berlin 🙂

  • All this under-spending is clearly at the expense of your family who get no joy in their childhoods.

    It’s great that your kids are already choosing the cheaper school supplies. You’ve done a good job.

    If it is up for a vote, I think Eastern Europe next. This is likely the last trip before your teenager will be more unpleasant due to hormonal changes and development. That year will be a good year to hang out in Mexico. Access to the beaches and family time together that is not quite so close could be a godsend.

  • Is it just me or do expenses get lower the longer you stay retired? 😛 I found this to be true for us as well. I guess the longer you stay retired, the better you are at becoming efficient with your costs. People have no idea how much they are paying to work.

    Congrats on another great month!

    Thanks for the tip about Thai park in Berlin! We loved it.

    Oh and I also found Amsterdam more and more pricey each time we go back. This time we discovered Rotterdam, which is way better value ($50 CAD/night for Airbnb, compared to $150 in Amsterdam!) and less crowded/touristy.

  • Good Job Justin.. My favorite ROG reports are for the months of March, June, September and December 😉

    On a side note, I think I have mentioned it before, but I do not think you need that much in cash/fixed income. This is how I view it – your portfolio generates $30K in forward dividend income per year, which matches your spending roughly. This dividend income will likely grow over time. Not sure too much about international dividend amounts, but US dividend amounts are pretty sticky – so if you earn $20K in dividend income on your US stock funds, that dividend amount will be there in year 1, 2, 3 etc ( unless we get 1929, in which case we are all…FU%$$, I mean in trouble)

    So I would say, that you are expected to reasonably be able to collect $30K/year for several years in a row.. Even if your net worth drops to $900K by the end of 2018, my guess is that the dividend income will roughly stay around the $30K mark.. I am only talking about equity investments of course – the bond interest will likely stay flat..

    On a second side note, are you aware of Insight Visa? You can earn 5% APY on the first $5K in savings.. So you can open one for yourself, another one for your wife, and essentially earn $500 in interest which is equivalent to having $40K at Ally earning 1.25% APY..

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