Author Archives: JustinRoG

Costco Costs More: A Cautionary Tale of Bulk Buying Gone Wrong

Every year or two I revisit my assumption that I’m spending my money in an optimal way.  Sometimes this means shopping my home and auto policies to several new insurers to make sure I’m getting the best rates available. More recently, I questioned whether I could save money by buying in bulk at Costco or by shifting more grocery spending to Target or Walmart.

Enter the cost comparison.  During September and October 2017 I stealthily visited five stores near me in the Raleigh area to check prices on sixteen different staple foods.  I chose Trader Joes, Costco, Walmart, Aldi, and Target.

Going into the experiment, I assumed Walmart and Aldi would be the cheapest, with Target slightly more expensive than those two.  Costco would come in fourth place while Trader Joe’s would stand out as the most expensive.  This was exactly the results of my study (with the exception that Target was noticeably more expensive compared to Aldi/Walmart).  Walmart was the cheapest while Trader Joe’s was the most expensive with the other stores falling in between in the predicted order.

Here are the raw numbers with lowest cost for each item bolded:

ITEM: Trader Joes Costco Walmart Supercenter Aldi Target
apples, per pound $1.31 $1.00 $0.98 $1.10 $1.40
organic apples, per pound $2.00 not available $1.83 $1.83 $1.74
avocados, each $1.37 n/a $1.00 $0.95 $1.32
bananas, per pound $0.57 $0.46 $0.57 $0.44 $0.52
mac n cheese 7-7.25 oz $0.99 $0.72 $0.26 $0.33 $0.69
whole milk, per gallon $3.29 $2.45 $2.38 $2.49 $2.55
loaf bread, 20 oz $2.08 $2.15 $0.88 $0.83 $0.99
fresh chicken breast, per pound $4.99 $2.79 $1.99 $1.89 $1.99
pork loin, per pound $3.99 $1.99 $1.94 $1.89 $2.49
ground beef, per pound $3.99 $3.29 $2.39 $2.99 $3.09
eggs, large dozen $0.99 $1.85 $0.67 $0.74 $0.91
cheerios, 14 oz $1.86 $1.92 $1.15 $1.49 $2.50
peanut butter, 16 oz $1.99 $1.67 $1.16 $1.08 $1.20
canned pinto beans, 15.5 oz $0.99 n/a $0.57 $0.53 $0.54
spaghetti sauce, 24 oz jar $1.65 $1.25 $1.06 $0.99 $1.57
spaghetti noodles, per pound $0.99 $1.09 $0.74 $0.75 $0.76
TOTAL (except Costco) $33.04 incomplete $19.57 $20.30 $24.26
Vs. Costco comparison* $28.68 $22.62 $16.17 $17.00 $20.66
% More Expensive than Walmart 77% 40% 0% 5% 28%

* Since Costco only stocked 13 out of 16 items in the comparison, the total price for those 13 items is shown in the “Vs. Costco comparison” row

Results

Walmart is the clear price leader based on a comparison of these 16 items.  Looking at only the 13 items that all stores had on shelves (the “vs. Costco comparison” from the chart), Aldi was 5% more expensive than Walmart.  Target was 28% higher priced than Walmart. Costco was 40% more than Walmart, while Trader Joe’s was 77% higher priced than Walmart.

Aldi looks slightly better when it comes to comparing the cheapest store for each item. Aldi took the lead with the lowest prices on 8 out of 16 items. Walmart was a close second with 7 out of 16 items.  Target, not wanting to be outdone, came through on organic apples that were 9 cents per pound cheaper than Aldi and Walmart.

Nothing was cheapest at Costco.  However, Costco’s prices on some items like pork loin, bananas, milk, and apples were within pennies of the cheapest alternative. Though not on my comparison list, I went on a search for things that are great values at Costco. I mostly came up empty-handed but did notice a few things. Their store brand paper towels looked like a good deal (if you have a spare closet to store 16 huge paper towel rolls). Blue cheese and parmesan cheese were good values with prices similar to Trader Joe’s but both came in ridiculous two pound blocks.

Costco is the lone store studied that comes with a membership fee.  Yes, they charge you to enter their store and charge you for everything you buy (except the samples; they are free).  Though you don’t always have to have a membership to enter Costco.  Like ninjas, we snuck into Costco while the door attendant was distracted to complete our clandestine comparison shopping and scored some free quesadilla samples in the process.  Costco’s $60 annual fee for basic membership would add a 2% average surcharge to all items if you spend $250 per month (only 1% if you spend $500/month).  Paying $120 for executive membership makes sense at the $250/month spending level since the 2% cashback covers the added cost.  And after hearing from several hard core Costco aficionados, it’s impossible to spend less than $250/month at Costco (probably because they are 40% more expensive than Walmart!).

Trader Joe’s made a weak showing on prices with the highest or second highest price for each individual item.  This wasn’t a surprise at all since we never shop at TJ’s for regular groceries.  We do buy a lot of specialty items at Trader Joe’s that are very competitively priced for great quality items.  Things like frozen dim sum potstickers, frozen edamame, fancy/imported cheeses, $3 Buck Chuck (Charles Shaw) wine, other imported wines, craft beers, nuts and seeds, capers, and marinated artichokes.  On the bright side, TJ’s offers free coffee samples and the TJ staffers are super nice and friendly, plentiful, knowledgeable and helpful (things I mostly can’t say about Walmart staffers other than the friendly part).

$2.99 for a pound of delicious potsticker dumplings from Trader Joe’s.  Sauce is homemade from sesame oil, white vinegar, minced fresh galanga, sugar, water, and soy sauce.

 

A few notes on methodology

I tried to pick the most reasonable items that many buy for a fair comparison.  It’s not necessarily a representative sample in proportion to the categories of groceries people actually buy.  The totals in the chart don’t make any attempt to weight certain products more than others.  If you buy a lot of ground beef and mac n cheese, Walmart would appear much less expensive, for example.

I tended toward the larger packaging when that drove the unit price down.  For example, in the peanut butter category I priced out the 40 ounce container at Walmart, Aldi, and Target because our household can consume a jar of that size before it goes bad.  Costco only offered one size: a two pack of 48 ounces per jar.  Trader Joe’s only offered a 16 ounce container.  The cost data in the chart (above) reflect the unit cost, which was based on a 16 ounce container size in the case of peanut butter.  Costco was the only store that sold larger sizes than I thought we could reasonably use before the food expires or suffers from loss of quality (bread, apples, and bananas for example).

I didn’t look for organic, all natural, non-GMO, gluten free, free range, grass fed, vegan, kosher, halal, or other specialty designations except for the organic apples.  This reflects the way we shop and probably results in the least expensive basket of groceries.  Your mileage may vary if you have specific constraints on your grocery purchases.  I have, however, noticed that many store brand items at Aldi are now non-GMO, all natural, with no artificial coloring without any increase in price.

I looked for store brand or generic products when available.  This might partially explain why Costco was relatively expensive since all of their non-perishable items in this comparison were name brand (Cheerios, JIF peanut butter, Nature’s Own loaf bread, Kraft mac n cheese, Barilla spaghetti, and Prego pasta sauce) whereas the other four stores generally offered comparable quality store brand products.  I’m sure I’ll see some debate in the comments claiming name brand / Costco store brand is better than the other stores’ store brands and I’m okay with that – there might be noticeable differences between name brand and store brand in some cases, with the name brand not always being the best.

I left out local grocery stores like Harris Teeter, Kroger, and Food Lion. The main reason is that I already knew Walmart and Aldi were cheaper than the local grocery stores.  I didn’t visit Whole Foods because it’s all the way on the other side of Raleigh in the “nice” part of town. Not exactly in my grocery market area at 12-15 minutes drive and 6-8 miles away while most of the stores listed in this study are within 6 minutes and 2.7 miles.

 

Grocery Shopping Strategy

How does this cost comparison help me?  It affirms my belief in my current grocery shopping strategy.  In a nutshell, I shop at Walmart and Aldi for most things and supplement those stores by shopping the sale items at a regular grocery store occasionally.

For those more curious about my grocery shopping strategy, I summarized it a few years ago in a post:  “Extreme Grocery Shopping Without Coupons“.

Here are the main takeaways from that article:

 

Do:

  1. Shop at stores that are generally inexpensive
  2. Buy stuff that’s on sale that you normally buy
  3. If you see a great deal on non-perishable items, buy as many as you will use by their expiration date
  4. Plan your meals around fresh fruits, vegetables, and meats that are on sale
  5. Try something new occasionally
  6. Know what things cost and buy things at the store where it’s least expensive
  7. Skip juice, eat fruit instead.

 

Don’t:

  1. Buy more perishable goods than you can reasonably use before they will expire (unless you can freeze them with minimal reduction in quality)
  2. Drive long distances just to save a few dollars at a store with a good sale
  3. Focus too much time and attention on extreme couponing
  4. Buy a lot of prepackaged convenience foods
  5. Be afraid to spend money on expensive foods if it helps avoid dining at an expensive restaurant

 

To get a sense of how much we’re saving on groceries by frequenting Walmart and Aldi instead of Costco, let’s look at our grocery spending for a year.  Last year we spent $5,753 on groceries. Given that Costco is about 37% more expensive than the average of Aldi and Walmart, our grocery bill would be $7,880 at Costco, an increase of more than $2,100 for the year.  That’s what we spend on a week aboard a cruise in the Caribbean or two weeks in Europe (in other words, a substantial cost).

On top of $2,100 in extra spending if we shopped at Costco, I’d also have to have a larger refrigerator and pantry plus a deep freezer to store the much larger size of products.  Some of the food would still go bad (for example, what if we can’t eat the whole 10 pound bag of apples before they rot?).  I can’t quantify the added food waste and spoilage but I assume it would add at least 5% to the overall grocery bill.

 

Costco Isn’t All Bad, Right?

So many smart people love Costco.  I assume I’m missing something.  For some, I assume they have very poor alternatives to Costco.  Maybe there is no Walmart, Target, or Aldi nearby (the horror!!) and the regular grocery stores are too pricey.  It’s certainly possible that the 40% additional cost I observed at Costco could be specific to Raleigh and not broadly true across the US.

Costco sells a lot of products beyond groceries. I’ve heard Costco has great deals on travel and new tires, for example.  The times I have compared costs to my usual providers, Costco didn’t come out ahead.

It could be the customer service and ambiance that sets Costco apart. However I didn’t see very many available Costco associates walking the aisles when I was comparison shopping. The check out lines were long and the parking lot was full.  And this was mid-week while everyone was supposed to be at work!  Costco’s return policy is legendary, but Walmart and Aldi have been very kind to me on every occasion I’ve sought out a refund or replacement. In fact, Aldi offers a 200% money back guarantee – a free replacement product plus 100% cash refund of the purchase price. I’ve used this refund at Aldi many times but I refuse the cash back if there was nothing wrong with the product other than I didn’t like it.

I tend to make the assumption that everyone is like me and tries to optimize costs where feasible. However, I realize that some just might not care that Costco costs a lot more than their much cheaper rivals.  In other words, the ~40% premium for shopping at Costco is “worth it” (and I’m okay with that – I don’t optimize for lowest cost in all situations either).  I hope it’s not their decor people love because I found Costco to be more depressing than Walmart.  The huge warehouse shelving at Costco gives it a raw, industrial feel in my opinion (but then again, I didn’t see The People of Walmart at Costco).

 

Conclusion

Walmart and Aldi are the cheapest stores in my price comparison that also included Target, Trader Joe’s, and Costco.  In our case, Aldi/Walmart saves us more than $2,000 per year versus shopping mainly at Costco.

Though none of the sixteen items in my comparison were cheapest at Costco, I did find some bargains on items that I didn’t include in my comparison such as paper towels and imported cheeses.  Other items were within pennies of being cheapest at Costco.  With some effort, I could include Costco into my shopping rotation and buy only those few items that were actually cheaper (or better) at Costco compared to my usual stores.  Then again, I like the relative simplicity of having Walmart and Aldi as a default to take the thinking out of the equation.

After I completed the cost comparison research for this article, a new grocery store popped up next to the Aldi and Walmart in my little corner of Raleigh.  Lidl, another German grocery discounter like Aldi, began operations in mid-November here.  We visited the store on their opening day and after taking a quick look, their prices appear to be on par with Walmart and Aldi overall.  We revisited Aldi the day of the Lidl grand opening and noticed that many prices were slightly lowered to match Lidl’s prices down to the penny.  As happens so often in the grocery game, prices fluctuate over time so it’s good to periodically revisit assumptions on which stores are cheapest.

 

 

Where do you shop for groceries?  Do you shop at Costco?  What items are cheapest (or best) at Costco – and give me some prices!! 

 

 

Interested in tracking your grocery spending and all other expenses automatically for free? Sign up for Personal Capital today!

Cruising through Fall – October 2017 Financial Update

October was another great month for us!  We had a blast, blew some money on a quick jaunt on the high seas, and enjoyed the outdoors. And grew $42,000 wealthier while having all that fun.  No complaints here.

In financial terms, our net worth climbed to $1,978,000.  Income remained steady at $4,573 while total spending for the month of October remained modest at $1,748.  Given that we don’t even spend our current income, I’m starting to unravel the mystery of why our cash balance continues to grow month after month.  Spending less than we make – an old habit we can’t kick.

Fall is slowly descending on North Carolina. The leaves are finally changing colors and falling off the trees. Mornings are chilly while afternoons are mild.  We haven’t turned on the heat much this year, but that will change soon with forecasted highs in the 50’s and 60’s over the next week.  Thanksgiving is just around the corner which means lots of turkey and family time (and some family members that are turkeys).

Income

Investment income totaled $1,096 for the month of October.  This is the last dribble of quarterly dividends from funds that pay at the end of the third quarter.  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.

About half of October’s investment income came from our taxable brokerage account investments which means we can spend the money without withdrawing it from IRAs or 401ks.

Blog income, shown as “other income” in the chart, remained steady at $2,568.  Not a bad figure given how infrequently I’ve been posting lately!

My early retirement lifestyle consulting income climbed to $845 in October after a big fat $0 for September. I can’t explain why this little side hustle ebbs and flows like it does.  If it remains this busy I’ll look closer at raising rates to reduce demand.

Nephew’s birthday party at the city park

 

Deposit income of $62 was cash back from the Ebates.com and Mrrebates.com online shopping portals.  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 paid for a cruise in October (more details later in this article) which will lead to $40 cash back in the next month or two.

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).

Beautiful lakeside hiking this fall!

 

More stunning hike views

Expenses

Now let’s take a look at October expenses:


For the fourth consecutive month, our spending remained below $2,000 per month.  In October we spent $1,748.  That’s slightly more than half of our budgeted spending of $3,333 per month (or $40,000 per year).  Travel and groceries made up almost all our spending for the month.  Gotta eat and go to fun places, right?

 

Travel – $928:

We found a last minute cruise deal out of Miami on the MSC Divina.  So we booked it six days before the date of sailing.  Here’s the price breakout:

  • Cruise fare – $744 (we’ll end up with ~$64 refunded due to Ebates and the MSC Voyager club discount/refund)
  • Mandatory gratuities – $175
  • Miami light rail tickets – $9 (MIA airport to downtown, then free trolley to Port of Miami)
  • Flights RDU-MIA $0 ($330 each but we used 22,000 (x2) Chase Ultimate Reward points to get free last minute flights).

 

Sailing away from Miami!

 

Beautiful Bahamas

As a family, we sailed on the MSC Divina in December of 2016.  We loved it so much that we jumped on this deal when we saw it.  This time around it was just me and Mrs. Root of Good.  We call it a 13.5 year wedding anniversary present to ourselves because we’re awesome.  It’s the first time cruising without kids since our honeymoon 13.5 years ago.

Hot tub time in the adults only area. Stars. Wind. Waves. Solitude.

The airfare was expensive in points terms for a 2 hour flight, but it made sense to fly instead of drive and pay for gas and parking. Timewise, it’s about six hours door to door to fly versus 12-13 hours driving (which means overnight hotel at least in one direction).  We also used our Priority Pass Select card (a benefit that comes free with the Chase Sapphire Reserve card) to get a free meal and frosty beverage in the Miami airport plus $180 worth of to-go candy and beef jerky at the Corona Beach House restaurant/market.

In selecting expensive flights, we thought to ourselves:

We have money so let’s spend it to gain convenience and comfort because what are we saving it for after all?

I could have booked less convenient flights for a significant points savings that would have us leaving home at 5 am instead of 7 am the day of the cruise (and be dead tired by 3 pm!).  Or book flights with very little slack in the schedule to get to/from the airport and cruise ship (and freak out if the plane or the ship isn’t on schedule).  Or we could have waited six extra hours in the airport to save $80 worth of points (and arrive home at midnight).  In the end, we decided to go first class (well, still in coach but you know what I mean) with a flight schedule that got us to Miami at a reasonable time and got us back home without excessive hurrying or waiting.  Not driving twelve hours home was worth every point expended!

A relatively undiscovered spot of natural beauty an easy one mile walk from the port city of Ocho Rios, Jamaica. Here we are at Little Dunn River Falls/Beach. Climbing up the falls was fun!

 

Mmmm… Good eats! Best pizza in the world, which isn’t surprising since MSC is an Italian cruise line.  Pizza is straight out of Naples, Italy.  Paella, fried fish, asparagus, and veggie lasagna also good.

 

Interested in cruising? Check out all the posts in my “Going on a Cruise” series:

Going on a Cruise Part 1: Overview

Going on a Cruise Part 2: Getting the Best Deal

Going on a Cruise Part 3: Save on Board and on Transportation

Going on a Cruise Part 4: The Food!

Cruising the Caribbean Aboard the MSC Divina

 

We enjoyed several opportunities for free drinks while on board. This was the complimentary beverage assortment at the Cruise Critic meet and mingle where we got to meet a handful of fellow American cruisers and we got to meet all the ship’s senior officers.  Gin martini, pink lady, or champagne anyone?

 

Good times were had by all.

 

Groceries – $609:

Groceries were a little higher than average but nothing to be concerned about.  We spent around $150 at Walmart which gets lumped into “groceries” but routinely includes non-grocery items like clothing and random household or automotive stuff.  The same happens at Aldi occasionally. We bought a $12 ceramic frying pan that’s included here in “groceries”.  That’s the price we pay for automated, simple categorization at Personal Capital.

Prepping for beef/chicken/veggie stir fry. I cut up two batches of meat and veggies and put the second batch in the fridge so I could have freshly cooked stir fry in 5-10 minutes later on.  Mrs. Root of Good assisted with the wine selection in the lower right corner.

 

End result plus jasmine white rice and lo mein.  A healthy dose of chili oil paste and sriracha to keep the intestines purified from disease.

 

We made Banh Cuon wraps. Rice flour wrapping stuffed with beef and mushrooms.

 

Charitable Giving – $50:

We bought a $50 Walmart gift card and gave it to our kindergartener’s teacher so she can buy supplies and technology gear for the class.  The neighborhood school our kiddo attends was one of the worst schools in the district several years ago, but it’s been improving steadily over the years.  The gentrification of our neighborhood certainly helps.

Lazy day in the back yard with friends.

 

Education – $48:

$38 for a year’s worth of field trips for our kindergartener plus $10 for both of us to join the elementary school’s PTA.

 

Healthcare/Dental – $39:

$23 for lab tests for a routine physical. Theoretically this lab work would be covered for free with our insurance since it’s preventative medicine.  In practice, as everyone knows, healthcare billing doesn’t always work out like we think it should.  In order to avoid hour upon hour of phone calls, emails, scanning and sending forms, appeals, and other ugly nonsense to appeal this $23 charge (and possibly end up paying it anyway), I simply whipped out a credit card and resolved this issue in a couple of minutes.  Mental health has its price and it’s somewhere around $23 in this case.  Having plenty of money is nice.

The other $16 of healthcare spending was monthly premiums for our health insurance plan that’s mostly paid for with ACA premium subsidies.  ACA looks to be mostly intact going into the end of the year.  Other than the routine minor billing squabbles, the ACA is working out pretty well for us to provide good insurance at nearly no out of pocket cost.

FYI, open enrollment just started and runs through December 15 so head over to Healthcare.gov if you need to sign up for 2018.  I took a peek at our premiums for 2018 and they will be just over $1,000 per month however we’ll still pay less than $100 per month for the premium after the generous income based subsidy tax credit.

 

Gas – $36:

Our monthly visit to the gas station.

 

Restaurants – $15:

A box of fried chicken and biscuits for the family from Bojangle’s.  This is the In-N-Out Burger/Whataburger for fried chicken (and only available south of the Mason-Dixon line other than a sole location in Pennsylvania).

 

Cable/Satellite – $14:

$14.99 per month for 30 mbit/second download speeds and 4 mbit/second upload speeds with no data caps.

Bird watching in the backyard. Three white egrets floating over the lake.

 

Automotive – $6:

We spent $6 on a replacement key for our minivan.  The minivan only came with one key when we bought it used last year, so I figured a spare key would be a good idea.  Otherwise if we lose it, then we’ll be paying $150-200+ between locksmith fees and/or a new key from the Toyota dealership.  The key has an RF chip in the base of it for security, but I found a nifty Youtube video that allowed me to program it for free in a few minutes (something locksmiths charge $60-80 for) by cloning the existing key I have.  I’ll still have to drop a buck or two at Walmart or the hardware store to get the key custom cut to match the master key.  

Halloween scare house with our little pirate.

 

Year to Date Living Expenses for 2017

Ten months into 2017 and we have only spent $20,896.  That’s more than $12,000 below the $33,333 budgeted for the first ten months of the year.

The highest expense category is travel which is no surprise since we’ve spent 10.5 weeks on the road this year.

We’re taking baby steps to spend more (like that last minute cruise) but still not spending all that we could.  However there will be years with large unexpected expenses (or large expected, but lumpy, spending), so I’m okay under spending our budget potential in these early years of early retirement.

 

Monthly Expense Summary for 2017:

 

The North Carolina State Fair comes to Raleigh every year.

 

We went on “Can Day” where you donate 5 cans and get free admission. I picked up a ton of tomato sauce for $0.03 per can so the net cost of family admission was $0.60 (plus the food bank gets 20 cans of tomato sauce).

 

As we were walking to the exit gate, we found a free light show!

 

Net Worth: $1,978,000 (+$42,000)

October marks the twelfth consecutive month of net worth gains.  The last time we lost money during a single month was October 2016 when our net worth dropped to $1,618,000.  Since then we’ve been on a tear with five digit gains almost every month.  We’re up more than a third of a million dollars in the past year.

I’m hoping we avoid the fate of Icarus. For those not familiar with Greek mythology, I’ll save you the trip to wikipedia.  Icarus was a young man with wings crafted of wax and feathers.  “Don’t fly too close to the sun, son” said Icarus’ father Daedalus.  As kids are wont to do, young Icarus didn’t listen and soared too close to the sun with his “amazing” wax and feather wings.  Long story short, the wax melted, the wings fell apart and Icarus died.  As we glide onward and upward toward the mythical $2 million mark, I hope we can maintain altitude and stay at these levels for a while.  I hope our wings don’t melt this close to the sun.

In financial moves, I’m planning several things for year end 2017:

  • harvest capital gains – about $4,000 gains from selling a $14,000 mutual fund position
  • continue my Roth IRA Conversion Ladder – planning to convert ~$5,000
  • fund my solo 401k to create a tax shelter for income from Root of Good – $18,000 into Roth solo 401k; $6,000 into traditional solo 401k (for the RoG employer portion).
  • fund a his and hers Roth IRA – $5,500 x2 = $11,000

By the end of this financial fancy footwork I’ll accomplish the following:

  • reduce taxable holdings by $14,000
  • reduce cash on hand/money market balance by $21,000 (currently at $48,000)
  • increase traditional IRA/401k space by a net of $1,000
  • increase Roth IRA/401k space by $34,000

My initial Early Retirement financial plans were destroyed by this whole “Blog Makes Money” phenomenon.  As I mentioned in my article on the Roth IRA Conversion Ladder, I initially planned on converting $25,000 to $30,000 per year from my traditional IRA to my Roth IRA and use the proceeds from sales of equities in my taxable brokerage account to fund my annual living expenses.

As it turns out, this blog makes money.  That threw off the Roth IRA Conversion Ladder completely. Now I’m spending income that comes from the early retirement consulting and Root of Good, plus the dividends from my taxable account. Then, I use any excess funds plus some modest sales from the brokerage account to fund the Roth IRA/401k totalling $29,000.  On top of that I’ll still convert several thousand dollars from traditional IRA to Roth IRA each year.

I’m still achieving the same end goal as the Roth IRA Conversion Ladder which is to increase funds in the Roth space to allow tax free and penalty free withdrawals before age 59.5.

As part of this year end tax planning and shifting money around I might move more funds out of equities into bonds.  Throughout 2017 I have shifted $110,000 from equities into the Vanguard Total Bond Market Index. If the market keeps going up, I’ll take some more profits and continue this shift. I also moved $15,000 from a money market account earning 1% to five year certificates of deposit earning 2%.  That’s an extra $150 per year interest income.

 

Want to finish the year on a strong note? Here’s 11 tips to get you there.

 

 

How awesome has 2017 been for you?  Excited about the holidays coming up soon?

 

 

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Enjoying The Alcazar and Jamon Iberico in Seville, Spain

We’re on the road again with installment #4 from our nine week voyage across Europe.  This week we’re highlighting our last stop in Spain: Seville!  Quick recap: after visiting Lisbon, Portugal, we flew to Malaga in southern Spain then took a bus to Granada. After Granada, we traveled a few hours west to Seville.

We spent four nights in central Seville in an Airbnb overlooking the Alameda de Hercules plaza.  Capital of the Andalusia region of Spain, Seville overflows with history and a sense of the past.  Romans first settled the area more than two millennia ago and remnants of their city remain visible today in and around Seville.  Over the centuries Seville was inhabited by the Vandals, the Visigoths, then the Moors.  In the 13th century the Castilians conquered the city and it has remained under Spanish rule for the past 750 years.

Though 40 miles inland, the Guadalquivir river connects Seville to the Mediterranean Sea and onward to the Atlantic Ocean which led to its growth as a major Spanish port in the 16th century.  Seville grew to be an incredibly wealthy city as the Spaniards colonized the Americas.  The conquerors and colonists filled galleons with gold and silver before returning across the Atlantic Ocean to Seville.

Today’s Seville preserves many of its classical roots while offering modern conveniences for tourists like great city buses, a small but growing subway network, tons of restaurants, and pedestrian malls lined with shops.

 

More than an Eyeful!

The biggest draw in Seville is the Alcazar.  Originally built by Moorish kings, the Alcazar continues its regal role today as an official residence of the Spanish Royalty.  If you’re a Game of Thrones fan (who isn’t?) then you have probably seen the Alcazar starring as the Water Gardens of Dorne, a royal palace for the Dornish rulers.

 

The Alcazar – it sports dozens of rooms with similarly intricate designs

 

And grand courtyards

 

And patios

 

Gardens of Alcazar – the grounds were huge so we didn’t get a chance to explore more than a small segment.  Growing on the trellis over our heads are grapevines that must be 50 or 100 years old.

We planned to visit the Alcazar on a Monday night when admission was free. Everyone else knew our secret too. The short wait in line provided the perfect opportunity to check out the awesome scenery such as the Cathedral in the background.

 

Plaza de España / Parque Maria Luisa

The Plaza de España was originally built as Spain’s Pavillion in the Ibero-American Exhibition of the 1929 World’s Fair.  Today it’s a notable emblem of Seville (and mostly houses government offices). We happened on an impromptu Flamenco dance exhibit while exploring the grounds.

The Plaza de España served as a filming location for Star Wars Episode II: Attack of the Clones.

Plaza de España with fountain and horse drawn carriages

 

Plaza de España and the man-made canal that runs through the middle of it

 

La familia!

The Plaza de España sits within the Parque Maria Luisa which extends three quarters of a mile from north to south.  Most of the park is filled with trees, pathways, buildings, lakes, fountains, and wildlife.

Lake and waterfowl in Parque Maria Luisa.

 

Archaeological Museum of Seville at the far southern end of Parque Maria Luisa. The museum was originally built for the Ibero-American Exposition World’s Fair hosted by Seville in 1929.  We saw a young kid practicing bullfighting just around the corner from here.

 

Exploring the streets of Seville

Seville is a good walking city because a lot of the attractions in the old historic core are close together.  We had multiple days in Seville so we tackled a different part of downtown each day.  Some days we walked home at the conclusion of our adventuring.  Other days we had to catch a quick bus ride home for about USD$0.80 per ticket using the Multiviaje reloadable bus card (find the card at a Tobacco shop).

Torre del Oro / Gold Tower – fortification originally used to guard the Guadalquivir River.

 

Great views of the Seville Cathedral from the Torre del Oro

 

One of Seville’s many pedestrian-only streets. No cars allowed!

 

This massive sculpture, the Setas de Sevilla, is very new.

 

But if it’s the very old you seek, look underneath the Setas de Sevilla in the Antiquarium – excavated Roman ruins preserved in-place.

 

Between the Alcazar and Plaza de España is the old Royal Tobacco Factory. The building now houses the University of Seville.

 

No cultured museum visit is complete until your son yells “I can see all their peepees”. All. Of. Them.  –Small sculpture museum within University of Seville.

 

 

Lodging for four nights with Airbnb

During our nine weeks in Europe we visited 14 cities and stayed in 14 different Airbnb apartments.  It was a great way to live among the locals in a regular apartment.

We booked a two bedroom, one bath apartment for the five of us right on the Alameda de Hercules plaza in the center of Seville.  At USD$63 per night, it was on par with the $60-something per night apartments we booked elsewhere in southern Spain.  It’s less than half of what we would have paid for two comparable hotel rooms.  Airbnb was such a money saver and sanity saver in Europe (and if you want to save money and sanity with Airbnb, here’s $40 off your stay).  The living room offered plenty of room to stretch out and relax when we had some downtime. A table big enough for all of us to enjoy a homecooked meal or some takeout.  And a full kitchen to prepare said homecooked meal.

 

Basic but impeccably clean kitchen with eat-in table

 

Dining room (or office, if you have an Early Retirement Lifestyle Consulting client session).  Love that balcony and view out the front!  We had front row seats to some crazy procession that I think was Seville’s Pride Day Parade (based on copious amounts of rainbow flags and accessories).

 

Food in Seville

We cooked several meals in our apartment but also enjoyed several restaurant meals since everything was so cheap (except the $5 gelato place literally underneath our kitchen window).  Take out pizza was USD$5 each, for example, at the restaurant just outside our door.

Takeout Indian and Mediterranean food. Samosas, doner kebab, several curries, durum wrap, chicken nuggets and fries (for the kids).  I had to really convince the chef that a white guy wanted the chicken curry nice and spicy. Only USD$30 for all of this takeout.  Salads not included as I bought salad mix, blue cheese and tomatoes for $2 at the grocery store.

 

Under USD$20 for the five of us to enjoy paella, fried shrimp fritters, chicken fingers, and jamon iberico sandwiches at this casual eatery right underneath the Setas de Sevilla in a touristy area.

 

I had to do it. Taco Bell España was on my Must Do list for Spain. I’m sad to say it was disappointing compared to US Taco Bells (which I LOVE).  At least it came with a nice Cathedral view.  I can’t complain too much because they serve beer and margaritas.  And they have great air conditioning!

 

Mrs. Root of Good made some fancy tapas out of fresh baguettes, jamon iberico, blue cheese and various greens.  Good eats!

 

Thoughts on Seville

I hope I make it back some day! Hopefully I can return in the spring or fall when it’s cooler.  Seville is a great city with tons to explore in the downtown area.  I wish I had another few days to explore the streets and relax more since we were on the move every day.

Price wise, it’s an incredible value in Europe.  It really disproves the “OMG Europe is SO expensive” generality.  Lodging, meals, and transportation were all modestly priced.  It seemed slightly less expensive than other budget locales like Slovenia and the Czech Republic and not a lot more expensive than Mexico for some things.

If I had to pick just one place to visit out of the three we visited (Malaga, Granada, and Seville), I’m inclined to pick Seville. It’s bigger than the other cities and has more to do and see.  The Alcazar compares favorably with La Alhambra in Granada (our main reason for visiting Granada).  I would allow at least three to four days to explore Seville and a week if you have the time.

 

 

Check out the whole series (so far) of our nine week European family vacation:

 

 

What are your thoughts on Seville?  Can you tell how hot it was from the pics? Some days were 104F.  

 

 

Note to readers: I’ll be incommunicado October 21-28 because we just booked a last minute Caribbean Cruise on the MSC Divina out of Miami for me and Mrs. Root of Good! Flying solo without the kiddos this time! 

Exploring La Alhambra and the Narrow Alleyways of Granada, Spain

This week we’re visiting the third stop on our nine week family vacation in Europe.  After spending two nights in Malaga, Spain, the five of us set out on a two hour bus ride to Granada, Spain.

Upon arriving in Granada, we immediately noticed it was very hot but very dry.  We caught a city bus to the center of town, hopped off, and walked the last five minutes to our Airbnb.  This Airbnb was small and spartanly furnished but clean and modern – Ikea Chic style.  The apartment had all the basics – air conditioning, clothes washer, dishwasher, sleek bathroom, and full size refrigerator.  I was concerned the air conditioning wouldn’t be able to keep up with the 95-100 degree heat, but fortunately for us it had a setting that probably translates to “super jet fan turbo blast” in English.  Not a bad place to stay for three nights.

 

Getting Around Town

Our $67 per night Airbnb was pleasantly situated on a quiet alleyway within five minutes of just about everything in town including the main town square, the Cathedral, restaurants, grocery stores, and the bus stop.  It’s entirely possible to walk to most places in town and a car would be more trouble than what it’s worth unless you were planning to visit the surrounding countryside.  

The main reason we visited Granada was to tour the expansive Moorish fortification and palaces known collectively as La Alhambra. It was a 20 minute walk uphill from our Airbnb or a quick 8 minute bus ride.  We have three kids so the choice was obvious – bus it was!

A quick note: most buses in Granada are different than regular city buses ubiquitous throughout Europe and the US. These were shaped more like fancy bread delivery vans hollowed out and filled with benches and handholds.  The narrow streets and alleyways of old town Granada couldn’t handle full size buses (except on a few routes that don’t stray from the major thoroughfares).

Granada buses are cheap. If you buy a bus card for €2 (about USD$2.40) you can then add funds to it in any amount €5 or greater.  With the bus card, you save about 33% on each trip, making trips using the bus card only €0.79 each (USD$0.92).

Though we didn’t take any taxis, I saw the rate cards and they were surprisingly cheap.  From what I recall it was USD$4-6 for a short to medium length ride (from the bus station into the center of town, for example).  Once you see how steep some of the streets are, the taxis look like an even better deal.

Taxis won’t haul your lazy butt up this steep alleyway unfortunately.

One day we visited the Albaicin neighborhood – a thousand year old series of narrow alleyways lined with houses sitting on a hill overlooking La Alhambra.  From our Airbnb to Albaicin was an easy five minute walk.

I’d hate to be driving on these streets. Good thing those mirrors are retractable.

 

La Alhambra – The Main Attraction

We planned the whole nine day segment in Spain around visiting La Alhambra in Granada.  It didn’t disappoint.  I think the kids liked it too as they managed to trudge through the almost 100 degree weather for six hours (!!).  There are water fountains all over the complex which helped immensely in our battle against dehydration.

Good spirits in spite of the heat.  This shot was taken in the Generalife Palace with La Alhambra in the background.

 

Looking at La Alhambra from the Albaicin neighborhood.

 

La Alhambra’s roots are over 1,100 years old and date back to the days of Moorish conquest by the Muslims from North Africa (who controlled most of Spain for around 700 years).

The site itself is huge with one half of it extending a distance of a half mile from the main entrance gate. The other half of the site, the Generalife palace, measures roughly a quarter of a mile including buildings and gardens.

Planning tip: Tickets must be bought a month or two ahead of time during peak summer season, so don’t forget to book your tickets as soon as you can. Their website is cumbersome so allow a few extra days to deal with that. My experience involved a scratchy phone call to Ticketmaster Espana because the online site wouldn’t take any of my US-based credit or debit cards.

One of many gardens in the foreground with the Nasrid Palace and Carlos V Palace in the background.

 

Part palace, part fort. Great views of Granada abound.

 

Amazing pools. How did they build these 700 years ago on top of this mountain in the middle of the desert?

 

More pools in the gardens.

 

Nasrid Palace courtyard.

 

Intricately carved pillars and ceiling.

 

Courtyard in the Generalife Palace.

 

Good Eats

We mostly dined on food from the grocery store while in Granada. They had an amazing selection of cured meats and cheeses, olives, pastries, wine, and beer.  Plenty of ingredients for homemade tapas!  I also picked up some eggs and potatoes to try cooking the Spanish version of a tortilla after tasting it at a restaurant in Malaga a few days earlier.

Exploring the grocery stores in Spain was an experience in itself. Great way to better understand the culinary traditions of a place.  I also learned you DON’T TOUCH THE FRUITS AND VEGETABLES. There’s a lady in charge of handling the produce for you. After some begging and pleading from me, she did let me sneak a quick squeeze on the nectarines to see how ripe they were.

Restaurants and bars line the slender streets of Granada. We tried a variety of Mediterranean food from a local restaurant. We got doner kebabs, kefta meat wraps, and “hamburgers” (the latter of which were really chicken burgers on a unique yeasty flatbread roll).

 

Thoughts on Granada

It’s a phenomenal place to visit for at least a few days.  The town itself is interesting with its winding alleyways and narrow streets.  La Alhambra is a very full day-long visit and a must-see if you make it to Granada.  Though we didn’t make it outside of Granada proper on this trip, we were tempted to try out some great hiking trails criss-crossing the mountains and foothills around Granada (but the scorching temperatures kept us away).

Main shopping street in Granada. It’s covered so the intense summer sun won’t burn you up!

 

La Alhambra is superb.  The largest and best specimen of Moorish architecture in Spain.  If you can’t make it to Granada, the Alcazaba in Malaga and the Alcazar in Seville are similar in nature to La Alhambra though not as grand in scale.

I’m glad we had a chance to visit Granada and other parts of Andalusia in southern Spain because these areas had a totally different look and feel compared to the rest of Europe.  I’ve wanted to visit this region since studying Andalusia in Spanish class two decades ago.  It took a while but my patience paid off!

 

Check out the whole series (so far) of our nine week European family vacation:

 

 

Interested in visiting La Alhambra?  Have you already navigated the twisting alleyways of Granada?

 

 

September 2017 Financial Update

Life is going well for the Root of Good family.  The kids are all back in school and we are settling into our new school-time routine.  Most weekday mornings start with the walk to school to drop off our kindergartner. Then we play tennis, take a walk, go hiking, or go swimming.  As the days grow cooler we’ll adjust our routine to take advantage of warmer afternoons on days that we plan on being outside for a while.  I always look forward to fall and this year is no different.  For us it means more time outside, campfires, Halloween, Thanksgiving, and time with family.

We just closed the books on September and along with it, marked the end of the third quarter of 2017.  Our income spiked up to $7,433 for the month while our expenses remained low at $1,824.  Net worth grew by a massive $46,000, thereby boosting our net worth to $1,936,000 by the end of September.

Income

Investment income totaled $3,221 for the month of September.  Dividends were higher than most months because 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, remained steady at $4,202.  2017 is going to be a good year for Root of Good income.

My early retirement lifestyle consulting dropped to $0 for the month because I didn’t transfer the fees from a September client consultation session until the beginning of October. October is already looking better for this little side hustle, and I’m totally happy with just a few consulting clients per month (and in fact prefer this pace 🙂 ).

Deposit income of $9 was cash back from the Ebates.com and Mrrebates.com online shopping portals.  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!).

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).

What we’re up to these days. As little as possible.

 

And watching this guy on the back fence. Great Blue Heron – stands over 2 feet tall with a 7 foot wingspan.

Expenses

Now let’s take a look at September expenses:


Like August, spending in September remained low at $1,824.  That’s just over half of our budgeted spending of $3,333 per month (or $40,000 per year).  Taxes were our largest category of spending closely followed by groceries.

 

Taxes – $600:

Third quarter estimated federal taxes of $600. I paid this with a credit card (and paid a fee just under 2% for that privilege) to meet the minimum spending requirements for a credit card that will give me $500 cash back (or the same amount of travel reimbursement) after spending $4,000 (Capital One Spark Business card, for the curious).  The $11 credit card usage fee is filed under the “travel” category.

I paid third quarter estimated North Carolina state taxes in August so it doesn’t show up on this month’s expense summary.

 

Groceries – $551:

A pretty average month of grocery purchases for us. We spent about half of the total at Aldi and Food Lion (a regional grocer in the Mid-Atlantic states).  Aldi is where we routinely shop for most things.  Food Lion is very convenient since it’s an easy walk from home.  They had a crazy sale in September where all store brand items were $0.25 off (sale runs through October 10, FYI). Many canned goods were $0.03 to $.25 each, and yogurt cups were $0.15 after the discount.  When this sale runs every 4-6 months I tend to stock up on things that last a while.  I don’t do extreme couponing but I’m okay paying attention to the grocery store sales paper to take advantage of big savings like this opportunity.

 

Groceries mean good eats. Like this pad thai!

 

And thai curry with noodles.

 

And spring rolls with hoisin peanut dipping sauce. We don’t skimp on good ingredients.

 

Healthcare/Dental – $226:

Mrs. Root of Good and I both visited the dentist in September.  We paid cash for our visits that were $99 and $111 each.

The other $16 of healthcare spending was monthly premiums for our health insurance plan that’s mostly paid for with ACA premium subsidies.  The ACA came under attack once again in September though it remained unscathed once again.

 

Business/Misc – $219:

This cost represents my annual domain registration and privacy protection fees for RootofGood.com ($27) plus hosting fees for three years ($192) at my new hosting provider, Rockaway Hosting.  I just switched away from Hostgator because I was up for renewal and their renewal rates were rather expensive given some upcoming upgrades I hope to do (including converting Root of Good to HTTPS).

So far Rockaway works flawlessly.  Things are running smoothly and their tech support is amazing.  I’ve received email responses on tech support issues from the owner at 4 am and 8 pm on weekends (when does he sleep?).  Other hosting companies might be slightly cheaper and they might work just fine until you have a technical problem you need help with.

If you have a blog and need to migrate to new hosting soon, or want to start a blog at a reliable host where real people provide tech support, check out Rockaway Hosting (that’s my referral link – if you sign up and I might make a commission on services you buy). And use coupon code ROCK10 if you want to save an extra 10% off their low rates.  The code generally stacks with their promotions on multi-year packages, too.

 

Clothing/shoes – $123:

We finished our back to school and post-Europe trip shopping during September by spending a total of $123 on clothes and shoes.

I spend more on shoes now that I’m retired than I did while working. Way more time to explore the woods these days!

 

Lake Durant, Raleigh North Carolina

 

Travel – $63:

We took a three day trip to Atlantic Beach, North Carolina in September.  The hotel itself was free using Chase Ultimate Reward points.  Our only expenses were $34 for a tank of gas to get to the beach (about 300 miles round-trip from Raleigh) and $17 for dining out while on vacation.  The hotel provided a free hot breakfast each day along with free snacks, fruits, coffee, and hot chocolate throughout the day. Those freebies plus a small assortment of vittles we brought with us kept our vacation food expenses to a minimum.

I took a gamble on the hotel booking. I could have spent 17% more points to book a refundable room and cancel if there was bad weather.  I opted to take a chance and save the 17% surcharge and hope for no hurricanes.  It worked out in our favor since we dodged both hurricanes that skirted the North Carolina coast in September.  I like being my own insurance company since we save tons of money over the long haul.

The last $11 of travel spending for the month was the 1.87% surcharge to pay my $600 estimated taxes. I stick that expense here in the travel category since I’m usually paying taxes on credit cards to snag some free travel.

If you want to save on travel, check out all the credit card offers and find a good sign up bonus that will take you where you want to go.  And don’t forget about Airbnb – $40 off your first stay.  Our family of five saved thousands of dollars on lodging this past summer in Europe by booking two and three bedroom apartments through Airbnb instead of two hotel rooms (and enjoyed much more spacious accommodations too!).

Exploring the tidal areas of Atlantic Beach.

 

Brother/sister time at the beach.

 

We had the whole beach to ourselves. No one within a quarter of a mile or more. Shoulder season in North Carolina is great (and cheap)!

 

Just up the road from the hotel is Fort Macon, a North Carolina State Park.

 

We stayed at the Hampton Inn and Suites in Atlantic Beach, North Carolina.  It’s a quick three minute walk to the beach and many of the rooms (including ours) come with a great oceanview. For some bizarre reason they charge a premium for rooms with views of the golf course so we luckily got one of the “regular” oceanview rooms on an upper floor.  Using Chase Ultimate Reward points, I paid about 7,000 points per night for a suite that accommodates six and comes with a kitchen and living room (and free breakfast for all).  This was a nice practical hotel for family trips to the beach.

 

Couch folds out into a bed

 

Kitchen with microwave, sink, and mini fridge.

 

One of the better free hotel buffet breakfasts that I’ve come across. Especially if you like bacon with a side of bacon.

 

Poolside in the shade was perfect since it was still rather hot in the afternoons.

 

Restaurants – $21:

Back home in Raleigh, Mrs. Root of Good and I enjoyed a kid-free mid-day post-swimming treat of thin crust NY style pizza (2 smalls for $11 at a local pizzeria).  I thought this pizza was better than the thin crust pies we ate in Venice, Italy this summer, but Mrs. Root of Good disagrees with me.

Later in the month we used part of a Papa John’s gift card someone gave us as a thank you for dog sitting.  I supplemented the gift card with cash ($10) to get some Papa’s pizza a couple times in September.

 

Cable/Satellite – $14:

$14.99 per month for 30 mbit/second download speeds and 4 mbit/second upload speeds with no data caps.

 

Home Improvement – $3:

Bathtub drain washer replacement from Lowe’s. Who knew these things dry rot and leak after 45 years?  It’s apparently been leaking off and on since we bought the house 13 years ago and I have just now isolated the leak after many rounds of troubleshooting over the years including breaking stuff, sawing a hole in the wall, poking a hole in the ceiling, a plumber visit, and replacing some plumbing and fixtures.  And the whole time it was a $3 faulty rubber washer.  This is a situation where it probably would have been cheaper to call the plumber first before trying to DIY.  I still need to patch the hole in the ceiling and do some touch up ceiling painting but at least we no longer get the occasional indoor rain shower coming from the second story bathroom.

 

Year to Date Living Expenses for 2017

Three quarters of the way through 2017 and we have only spent $19,148.  That’s more than $10,000 below the $30,000 budgeted for the first nine months of the year.

2017 is shaping up to be a rather unspendy year.  We have been fortunate to not have any unexpected emergencies, health scares, or other assaults on our budget.  Our planned roof replacement was mostly covered by insurance and our Europe trip came in about $1,500 under our $10,000 budget (and half of the trip was paid for in 2016).

Remaining big expenses for 2017 include summer 2018 travel we book this year plus a more expensive than expected preventative maintenance procedure for our minivan.  When we bought the used van last year, I knew it would need some routine maintenance.  What I didn’t know was that the recommended spark plug replacement at 120,000 miles costs almost $500!  Apparently the layout inside the cramped engine compartment means there are a lot of parts that have to come out to swap out the spark plugs.  The shop quoted three hours of labor which translates to at least double that for a guy like me (assuming I only break a few things).  The van is a six cylinder and we’re used to paying for maintenance on four cylinder engines.  Altogether, this means we’ll be shelling out some big bucks to keep the van running in optimal condition for as long as possible.

I’m tempted to skip or delay this particular routine maintenance but I would hate to lose a cylinder half way through a 1,000+ mile road trip and suffer the consequences which might include missing the departure of our next cruise ($1,000’s of wasted travel dollars).  I’m going to follow the frugal but not cheap route on this issue.  Our minivan has run flawlessly for the past 1.5 years and I’m hoping it remains reliable another 10 years if we keep it that long. This $500 maintenance should be one of the most expensive routine repairs we experience while we own this vehicle.

 

Monthly Expense Summary for 2017:

 

My sister in law wanted to throw a campfire themed birthday party for Mrs. Root of Good’s brother at our house. Sure!

 

Net Worth: $1,936,000 (+$46,000)

Another mind-blowing +$46,000 explosion of net worth in September.  We’re rapidly closing in on the $2 million mark.  Two years ago in September of 2015, I never thought we would be this close to the magic 2 million.  Since then we have enjoyed a half million dollars of net worth creation thanks (primarily) to a booming stock market.  Times are good if you’re a capitalist.

Throughout 2017 I have shifted $110,000 from equities into the Vanguard Total Bond Market Index.  If the market keeps going up, I’ll probably take some more profits and shift more equities to bonds.  Our portfolio is still over 90% equities so we’ll continue to enjoy huge gains if the market continues its upward march for several more years.

Other than thinking about moving money to bonds and transferring dividends to my checking account every quarter, I spend very little time managing my portfolio since it’s all in passive index funds.  Later in the year I’ll be analyzing my tax situation and will probably do one or more of the following:

  • harvest some capital gains (yes, gains)
  • continue my Roth IRA Conversion Ladder
  • fund my solo 401k to create a tax shelter for income from Root of Good

Over the next few months, I’m planning on releasing more Europe Trip Report posts with tons of pictures along with a few other finance-related posts.  I’ve been working on a lot of back end technical stuff with the blog and have some more tinkering to do in the next few months.  This is exactly the kind of “internet-y” nerding out I hoped to do in early retirement. I just didn’t know exactly what it would look like four years ago when I first made the shift away from working for the man.

 

Another great month!

 

Camp FI in Virginia

In other exciting news, I volunteered to speak at a four day retreat in April 2018.  At “Camp FI” in Virginia, 50 FIRE-seekers will camp in the woods, recreate, and mingle while listening to and hanging out with their favorite FIRE bloggers and podcasters.  Or something like that.  There are still several tickets available starting at $225 including lodging, food, and activities for four days if you are interested (click here) (update: as of Nov 1, 2017 these tickets are all sold out but they have a waiting list if you are interested in signing up).  Past guests LOVED it – rave reviews.  Other camps sold out within days or weeks of tickets going on sale so please be aware tickets won’t be available forever if you’re thinking about it.

I don’t make money if you sign up, but figured I’d throw the opportunity out there for those within driving distance of Petersburg or Richmond, Virginia with $225+ burning a hole in their pockets and an overwhelming desire to saturate themselves in FIRE-knowledge for a few days.

 

 

With just under three months left in 2017, how are you going to make the most of it?  Ready for fall?  Looking forward to the holiday season?  

 

 

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From the Alcazaba to Sea in Malaga, Spain

Now that we’re back in Raleigh I’m planning on releasing a more regular stream of trip reports from our nine week summer vacation in Europe.  After we spent five nights in Lisbon, Portugal, we took a short turboprop flight to our second destination of Malaga, Spain for a quick two night stay.  What started out in the planning stages of the trip as a pit stop in Malaga on the way to Granada turned out to be a surprisingly interesting city to spend a few days.

 

Looking down from the Gibralfaro Castle with view of the Malagueta bullfighting ring and the Mediterranean Sea.  Keep going straight south across that sea and you’ll soon hit Africa.

Getting around town (with some frustration)

We arrived at the airport several miles outside of town.  From the airport, we took a train to the main train station downtown.  Our airbnb was a 15-20 minute walk from the train station so we set out on foot.  It was hot!  Eventually we located our home for two nights.  It turns out that our airbnb host spoke no English so I put my Bachelor of Arts in Spanish Language and Literature to work and navigated my way through the tour of the apartment (how the A/C works; where to take the trash; signing a two page rental agreement in Spanish).

Soon after arriving in Malaga on a Sunday I learned how reverently Spaniards take their rest and relaxation.  The short version of the story is that after much wasted effort I learned that not much happens on Sundays in Spain.

The long version: I researched the local public transit system ahead of time and found out that buying a bus pass with ten trips pre-loaded was the way to go for cheap bus tickets at about half the cost of paying for each individual ride.  And the bus pass offers a free transfer within 60 minutes whereas paying cash gets you a single ride sans transfer.

We took the bus up to the Gibralfaro Castle which looks down 400 feet to the city below.  This 800 year old castle was built during the time the Moors ruled much of Spain.

 

Great views of the city from up here!

Since we had a few days in Malaga, I wanted to go the economy route of buying a bus pass for the five of us.  Mrs. Root of Good and the kids were tired but I had plenty of energy so I set out on foot searching for a convenience store or tobacco shop that sells the city bus cards.  I figured I would be chilling in the Airbnb’s cranked up A/C within 10-20 minutes, bus passes firmly in hand.  After inquiring at several of the local stores that were actually open on Sunday afternoon, the shopkeepers led me to believe the only place that sold bus passes on Sunday was the main bus station downtown.  Fortunately I had already walked 10 minutes toward the main bus station by the time I figured this out so I figured it was only an additional 15 minute walk to the main station.  The afternoon sun was exhausting but I persevered and made it to the main bus station where I eventually learned that they do not sell the city bus pass.

Disappointed but not deterred from the mission, I visited the main train station next door to the bus station. Another strike out – no bus passes there either.  Eventually I resigned to the fact that bus passes weren’t happening and I’d be paying full price to ride the city bus (after a long, sweaty 1.25 mile walk back to our Airbnb to reunite with the family).  I can’t complain too much as this was probably the most frustrating part of our entire nine week trip.

I still find it strange that neither the main train station nor the main bus station sold the city bus passes on Sundays.  But this was Spain and sometimes you have to wait till tomorrow to conduct business.

Downtown Malaga near the Tobacco shop that sells bus passes on Sundays.

I eventually found a tobacco shop in the center of town that was open on Sunday and I picked up a bus pass that would carry us through the rest of our stay in Malaga.  The bus service is pretty reliable with frequent service so wait times are minimal for most routes.  With the bus pass it’s just under USD$1 per person per ride.

Malaga has a beach within walking distance of the tourist center of town and just a few blocks from the city bus route. First time we’ve visited the Mediterranean Sea!  I would never visit Malaga just for this beach but it was a nice break for the kids.

 

Food

I didn’t have any good food pics for Malaga unfortunately.  For dinner for the adults one night, I grabbed a whole grilled fish and Spanish tortilla (which is full of egg and potatoes) from a bar around the corner from our Airbnb. The fish was grilled five feet away from me while I watched.  Once cooked, the chef topped the fish with a flavorful lemon garlic olive oil sauce. They sent me on my way with salad and bread to accompany the fish and tortilla.

While waiting on the fish I chatted with the bartender for a bit and inquired if they offered free tapas when you order a drink.  He let out a little chuckle before explaining the tapas menu to me (everything was USD$2-3 for a small serving).  Apparently free tapas aren’t common in the non-tourist part of town where we stayed.  However, the menu prices were still reasonable, with the fish, salad, bread, and Spanish tortilla setting us back only USD$12 and it was enough to feed two.

Other meals were picked up from the grocery store a block from our apartment for about USD$20 per day.  We enjoyed quick foods like refrigerated pizzas, meat and cheese with bread, flan and yogurt, fresh fruits, pastries, cereal and milk.  And lots of jamon iberico which is basically the Spanish version of prosciutto – thinly sliced cured smoked ham.

Most days we would have breakfast at the apartment, pack a lunch of sandwiches and snacks, and then have something more substantial for dinner once we were back at the apartment in the evening.  During the day we might pick up some treats as we explored the city.

The Alcazaba.  Built around 1,000 years ago, it’s a prime example of Moorish architecture.

The Alcazaba (with Gibralfaro Castle up the hill in the background).  We started at the upper castle and walked downhill to the Alcazaba.  Hint: don’t do the opposite route unless you’re a fitness warrior or you really enjoy punishment.

Lodging

We stayed at an Airbnb about 0.75-1.0 miles from the tourist center of town and about the same distance from the nearest train station.  If it was just me and Mrs. Root of Good we would probably walk into town each day. With the kids tagging along, the bus was an easy alternative that saved limited leg endurance for exploring the stairs, hillsides, castles, and narrow alleyways of Malaga.

Lodging is generally inexpensive in southern Spain and Malaga offered a lot of value-conscious accommodations.  For USD$62 per night we found a small, two bedroom apartment with full kitchen, clothes washer, air conditioning, and two full bathrooms.  The kitchen was tiny but we weren’t planning on cooking a lot during our short stay in Malaga.

Interested in trying out Airbnb? Want to save $40 off your first stay? Here you go!

Our upstairs master bedroom suite in the Malaga Airbnb rental. We had a private balcony and full bathroom just for us!

 

Thoughts on Malaga

I enjoyed Malaga a lot.  I originally planned on two nights in Malaga simply because it was easier logistically to fly from Lisbon to Malaga (instead of to Seville or Granada) due to the availability of a short, free one-way flight from redeeming United Airline miles.  Seville and Granada were our main destinations in southern Spain.  Malaga turned out to be a worthwhile destination in itself and an even better place to visit than Granada (home of the renowned La Alhambra) since there was more to see in town.

Looking at the 2,000 year old Roman Amphitheater from the street level entrance to the Alcazaba.

The Roman Amphitheatre was undergoing restoration when we visited in June of 2017.

Outside the tourist center of town, the streets were slightly gritty and unpolished.  It reminded Mrs. Root of Good of Mexico (another place we’ve spent a lot of time).  Outside the tourist center is great if you’re seeking value, however.  Accommodations and food are very inexpensive and it’s an easy walk or short bus ride to the center of town from where we stayed.

Strolling through the Alameda Park. Paralleling the harbor for half a mile, this park offers a scenic detour around the bustling downtown tourist area.

Malaga Cathedral. It’s massive!

Overall, Malaga is worth a visit of a few days if you’re headed to southern Spain.  Like many other cities in the south of Spain, it exudes history and culture from the Roman era to the Moorish era to the colonial era to modern day Spain.

 

Check out the whole series (so far) of our nine week European family vacation:

 

 

Have you ever been to Malaga or elsewhere in southern Spain?  Any favorite spots?  Did we miss anything in Malaga?

 

 

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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July 2017 Financial Update

It’s a rainy day in the outskirts of Koblenz, Germany and I finally have time to crank out the latest monthly financial update.  It’s 60 degrees and drizzling all day.  The fog rising over the farm fields obscures the view of the next village over.  Though a rainy day would mark ruin for others’ vacations, for us it’s a nice forced break from our routine of exploring new cities and sights.

In July, we visited Milan and Venice in Italy, Ljulbjana and Lake Bled/Kranjska Gora/Soca Valley in Slovenia, Salzburg and Hallstatt in Austria, Munich and Berlin in Germany, and Prague in Czech Republic.  Our nine week summer vacation in Europe is drawing to a close with only a few days remaining in Koblenz, Germany then a few days in Amsterdam before we fly back home to Raleigh.

July was another great month for us.  Our net worth rose another $40,000 to $1,882,000.  Our income remained steady at $1,549 which was barely eclipsed by our spending of $1,616.  In other words, a combination of passive dividend income from our portfolio and a small amount of income from this blog came close to covering all of our expenses for the month while we have been vacationing in Europe.

 

Income

Investment income totaled $940 for the month.  This payment arrived in the first few days of July from second quarter dividend payments.  The majority of our 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, dropped to $608.  I have two large checks from an advertiser waiting for me at home that arrived during June and July, so the blog income is lower than usual.  But watch out for August’s update when I’ll deposit three of those large checks!

My early retirement lifestyle consulting dropped to zero for the month. That’s totally fine with me since we’ve been rather busy on this vacation, and I had several media interviews during July that took some time out of my schedule.  I’m back on track to have several clients in August so I think July’s big fat zero is a temporary lull.  Perhaps everyone else is on vacation too and not overly focused on money.

I racked up about $20 in cash back from the Ebates.com and Mrrebates.com online shopping portals but didn’t transfer that money from paypal to my bank account until August so those funds will show up in August’s financial update. 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!).

july-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 July expenses:

july-2017-expenses

We spent $1,616 during the month of July.  We spent slightly less than half of our budgeted $3,333 per month (or $40,000 per year).  Travel represented all but about $100 of our total monthly spending.

 

Travel – $1,523:

In July we spent $1,523 in Europe on our big summer vacation.  About six to eight months ago we spent $5,000 for trains and buses between cities plus all of our lodging for nine weeks (through Airbnb) so our expenses right now while on vacation are mostly groceries, dining out, local transportation (transit or rental cars and gas), and admission fees to castles, palaces, and museums.

Looking at the disaggregated data in Personal Capital, our $1,523 travel spending for July breaks out as follows:

  • groceries – $500
  • dining out – $175 (note: this is probably closer to $400 including money withdrawn from the ATM in June)
  • rental car – $400
  • transit – $150
  • admission fees – $300

 

Groceries – We spent around $500 on groceries in July. We eat most meals at our apartment or pack a picnic lunch to enjoy in the middle of the day when we take a break from that day’s activities.  Don’t misconstrue this as a mere cost saving exercise – we enjoyed plenty of the finer things in life (smoked ham, smoked salmon, cheese, wine, beer) along with local staples at each meal.

Picnicking on the hillside overlooking Lake Bled in Slovenia. $5 for fresh baguettes, some ham, salami, prosciutto, and cheese equals a nice little feast with a view.

Picnicking on the hillside overlooking Lake Bled in Slovenia. $5 for some apricots, fresh baguettes, some ham, salami, prosciutto, and cheese equals a nice little feast with a view.

 

Dining out – We usually dine out two to five times per week.  Many times we order take out and dine in the comfort of our own home or take advantage of a park bench or picnic table.  From looking at our ATM withdrawals and credit card purchases pulled from Personal Capital, I see $175 spent during July.  However, we had several hundred euros in cash that I withdrew from ATMs in June that we most likely spent on dining out (our largest category of cash purchases), so we probably spent closer to $400 on dining out during July.  Most meals were USD$20-35.

We got local Czech food take out almost every day in Prague. 4 heaping plates of meat and some variety of potatoes for about USD$20.

We got local Czech food take out almost every day in Prague. 4 heaping plates of meat in a variety of savory and/or spicy sauces plus some variety of potatoes for about USD$20 total.

 

Rental Car – We rented a car twice in July.  Once for 10 days in Ljubljana (returning it in the northern part of Slovenia) and once more for four days just outside of Salzburg, Austria, returning it to Munich, Germany.  We spent $400 in total for rental fees plus gas and parking, which works out to about $29 per day.  We took eight major day trips during this period (including two moves to a new apartment in a new city) so I feel like that’s an incredibly good transportation value, even given the cheap public transportation options available in Europe.

Dachau concentration camp memorial site just north of Munich. 2 hours by public transit or 40 minutes by car.

Dachau concentration camp memorial site just north of Munich. Two hours by public transit versus 40 minutes by car from our south-side apartment.

Renting a car in Europe was a little intimidating but it worked out perfectly well for us.  I paid about 50% extra to reserve automatic transmission cars, which also seemed to get us a free upgrade to mid-size cars in two out of three cases.  I googled the traffic regulations a bit so I knew what most of the signs meant (and only got honked at once or twice).  Some streets were narrow but speed limits in the old towns are very slow.  It’s easy to dodge oncoming cars on what should be one way streets when you’re traveling at 10-15 miles per hour.  Parking was never a problem as we had parking at our apartments and the sites we visited had free parking or very inexpensive parking at $2-7 for the day.

One of the rentals was an Audi A3 and it was our smallest rental.  It was a squeeze but we fit all of our luggage for the five of us plus two big boxes of groceries in the back of the car.  Good thing we packed light because there is no way we could have fit five pieces of checked luggage in the trunk.

One of the main reasons to rent a car in Germany - our visit to Neuschwanstein Castle about 2 hours south of Munich. We decided to skip the interior tour after seeing many other castles and spent the time hiking up to a bridge over a waterfall instead. We ended up touring the castle courtyard for free, so didn't miss much.

One of the main reasons to rent a car in Germany – our visit to Neuschwanstein Castle about 2 hours south of Munich. We decided to skip the interior tour after seeing many other castles and spent the time hiking up to a bridge over a waterfall instead. We ended up touring the castle courtyard for free, so didn’t miss much.

 

Transit – We spent around $150 on transit in July.  In Munich and Berlin, unlimited ride multi-day passes for families were about $11-12 per day.  In Prague we chose to buy individual tickets.  For the whole family this worked out to USD$3 per one way trip (or $6 per day).

Prague Castle in the background and Charles Bridge in the foreground in Prague, Czech Republic. Transit in Prague is great - $3 to get the whole family across town to the castle by subway in 20 minutes.

Prague Castle in the background and Charles Bridge in the foreground in Prague, Czech Republic. Transit in Prague is great – $3 to get the whole family across town to the castle by subway.

 

Admission fees – We spent a total of $300 on admission fees during July.  We visited two caves in Slovenia and an ice cave in Austria that were almost $100 each.  We also visited the Residenz in Munich for $16 for the whole family (excellent value, by the way).  We tend to skip museums because, well, have you ever visited a museum with a five year old?

Cost for admission to parks, playgrounds, hiking trails, and splashing in streams and lakes? Generally zero and way more fun than the typical museum.  Perhaps I have no taste for culture.

Amazing Skocjan cave in Slovenia. Not far from Trieste, Italy.

Amazing Skocjan cave in Slovenia. Not far from Trieste, Italy.

 

Free: Hanging out at the deserted marina on Lake Hallstatt in Austria. I'm catching a quiet moment on the lake while the kids are burning off energy on a tire swing in the park.

Free: Hanging out at the deserted marina on Lake Hallstatt in Austria (Hallstatt village in the background). I’m catching a quiet moment on the lake while the kids are burning off energy on a tire swing in the park. Another one of those surreal “Holy Crap! Am I really here seeing this? Amazing!” moments.  Then of course I ended up on the tire swing five minutes later.

 

So far we are underspending the budget estimate I put together for this trip.  Since we are a few days from returning home, it’s unlikely we’ll encounter any big surprise expenses.

 

Home Maintenance – $60:

A teenager from down the street mowed our grass at home for $20 per mow times three mows.

 

Service fees – $22:

I have a 457 account and Mrs. Root of Good has a 401k that both charge small annual account maintenance fees. In exchange for these fees, the mutual fund expenses are lower than normal on these accounts compared to similar accounts at other institutions.

 

Telephone – $10:

We keep an old T-Mobile prepaid phone active for $10 per year on a grandfathered Gold Rewards plan.  Even though we rarely use it, it’s very handy those few times we do need it.  International roaming is easy and it has a “real” phone number that has proven useful several times this past year to serve as a contact number when verifying accounts for security purposes.  My various free VOIP phone numbers don’t usually work for account verification.

Cheers from Venice! Gelato!

Cheers from Venice! Gelato!

 

Expenses that were zero during June:

Internet – we cancelled internet for the summer since we won’t be using it.

Healthcare/Medical – I prepaid the health insurance through July so we won’t have to worry about that while in Europe.  So far everyone has remained healthy and my extensive first aid kit is still mostly intact.  We chose to skip travel insurance so we are self-insuring for health care here in Europe (other than our emergency coverage through US-based insurance).

Utilities – I prepaid our electric, natural gas, and water bills for several months ahead during prior months.  This was mostly to meet the minimum spending requirements for a series of credit cards we applied for this winter and spring that gave us 360,000 airline miles.  It doesn’t take much to score free tickets to Mexico, the Caribbean, or Europe (we traveled to Europe on free plane tickets, for example).

Do you like free travel as much as I do?  Check out all the credit card sign up bonuses.  Or go directly to the Chase Ink Business Preferred card with an 80,000 point bonus (any size business qualifies you for a business card).  For reference, 80,000 points can fly you almost anywhere in the world on a variety of frequent flyer programs, or get you three domestic round trip tickets.

 

Year to Date Living Expenses for 2017

july-2017-expenses-ytd

We have spent a total of $15,933 for the first seven months of 2017.  That is $7,400 less than our annual spending target of $23,333 budgeted for the first seven months of the year.  $15,933 year to date spending would appear to be a symptom of a painfully frugal lifestyle. It is $600 less than the federal poverty level, after all.  However, through careful planning and judicious spending on things that bring us great value, we’re living what I call a $100,000 lifestyle on under $40,000 per year.

In the fall of 2017 we’ll enjoy several months of cheap living.  The kids will all be in school during the weekdays leaving us parents with plenty of idle time to tackle some postponed DIY projects and general organizing, go out for some adventuring (once the temperature in North Carolina cools off to sub-inferno levels), and relax in my much-missed hammock.  It wouldn’t surprise me to see the year end total spending at $25,000-30,000 barring any unforeseen medical or house-related emergencies.

 

Monthly Expense Summary for 2017:

 

Net Worth: $1,882,000 (+$40,000)

Another month with a huge net worth increase.  Seven months into 2017 and we have zero months with a drop in net worth.  Things always go up, right?  Based on recent history that’s certainly a reasonable conclusion.

july-2017-net-worth

 

Since the beginning of the year we have watched our net worth increase by over $200,000.  To take advantage of a skyrocketing stock market, I’ve been slowly selling appreciated stock investments and moving the funds to the Vanguard Total Bond Market index fund.  I moved another $20,000 in the first couple of days of August.  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.

I started early retirement with a near-100% allocation to stocks.  After a series of sales and shifts to bonds, I’m still at a 90% equities allocation, which is aggressive by most standards.  I’ve been through a few bear markets in my life and I know I’ll be sleeping a lot better with a five year cushion of liquidity to insulate me from the vagaries of the stock market.

No longer a 30-something early retiree. Mrs. Root of Good celebrated the big 40 in Ljubljana, Slovenia with an uncharacteristically small birthday cake.

No longer a 30-something early retiree. Mrs. Root of Good celebrating turning the big 40 in Ljubljana, Slovenia with an uncharacteristically small birthday cake.

Enough of finances. Back to fun.  With a few days remaining on our nine week vacation, I’m in a contemplative mood.  For those still working, you probably know all too well that sinking feeling you get at the end of a one or two week vacation when you realize you’ll be back home soon, it’ll be Monday morning, and you’ll be back in your office chair wading through a backlog of emails, surfing Root of Good, and dreading the quotidian nature of your nine to five (assuming you’re not part of the 13% of folks that actually love their job).

Loving the slow travel lifestyle. Plenty of time to stop in beautiful places not on any tourist checklists take it all in. Bridge over the Ljubljanica River.

Loving the slow travel lifestyle. Plenty of time to stop in beautiful places not on any tourist checklists to take it all in. Bridge over the Ljubljanica River in Ljubljana, Slovenia.

Since I have retired, I don’t get that feeling any more.  I’ve adjusted to my new reality.  Though this particular vacation is about to be over, life as a whole is one big vacation now.  It is within our budget to spend every summer in Europe (or somewhere else) if we want to.  I’m ready to get back home but I know we’ll be back on the road again eventually.

 

 

Do you get that feeling at the end of a nice vacation?  Where should we vacation during the summer of 2018?  

 

 

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Surprising Finds in Lisbon, Portugal

The Root of Good family started its grand nine week European vacation with five days in Lisbon, Portugal.  After a short flight from Raleigh, Lisbon is an easy 7.5 hour overnight flight from Washington, D.C., so our transatlantic flight to Europe was relatively painless.  We arrived at 10:30 in the morning the next day.  After an arduous journey through the immigration lines, we left the airport by metro for a quick ride to our first (of fourteen) Airbnb apartments that would serve as our homes away from home for the next nine weeks in Europe.

To battle jet lag, I followed the advice to stay awake the whole day of our arrival and DON’T take a nap.  We dropped our bags at the airbnb apartment, hooked up to wifi, unpacked a bit, and did a quick inventory of necessities (“Do we have soap, shampoo, conditioner, and breakfast for tomorrow?”), and headed out for an afternoon of exploring downtown Lisbon so we would be forced to stay awake.  Easier said than done, we had an overly exhausted five year old that fell asleep on the metro ride back to our apartment, and it’s the first time I’ve nearly fallen asleep while standing up (waiting for the metro).

Waking up the next day in Lisbon, none of us really suffered from jet lag. Disaster averted.

Before we jump into the Lisbon trip report, here’s some background info.  Portugal and Spain share the Iberian peninsula in the southwestern corner of Europe, and appear to be similar in terms of climate and culture.  In fact, the two countries shared a king for a period of several decades yet remained separate, independent countries.  Being geographically adjacent, we decided to visit both countries (with Spain covered in a subsequent trip report post).

A quick note on ease of communication: I’m fairly proficient at speaking Spanish which helped immensely when attempting to communicate in Portuguese.  The languages are similar enough that I could get by reading Portuguese, make out some words while listening, and occasionally speak words in English or Spanish to get by.  If you know Spanish, learning the travel vocabulary basics is pretty easy.  English is widely spoken in the tourist areas, but less so outside the center.

 

I'm glad we didn't go bare-bones budget for our Airbnb reservations. This place in Lisbon was nice!

I’m glad we didn’t go bare-bones budget for our Airbnb reservations. This place in Lisbon was nice!  Perfect place to rest up after a flight across the Atlantic.

 

Exploring the City

Our apartment was a few miles from the center of town which meant a 10-20 minute bus or subway ride most days depending on where we were headed.

The biggest attraction in town is the Sao Jorge Castle.  A relic from the days when the Muslim Moors controlled southern Spain for a period of roughly 700 years, this old fortification sits high on a hill overlooking Lisbon.

Sao Jorge Castle

Sao Jorge Castle

 

Our first castle visit in Europe! First of many...

Our first castle visit in Europe! First of many…

 

sao-jorge-lisbon1

 

I'm still not sure how they got the water to the top of the hill to fill up this old moat. Did water run uphill back in the day?

I’m still not sure how they got the water to the top of the hill to fill up this moat. Did water run uphill back in the day?

 

Great views from the castle walls

Great views from the castle walls

 

We took a bus and a tram across the city to see the Tower of Belem. This tower guarded the entrance to the Tagus River, and provided protection for the city and all inland areas of Portugal from ships sailing the Atlantic Ocean.

We took a bus and a tram across the city to see the Tower of Belem. This tower guarded the entrance to the Tagus River and provided protection for the city and all inland areas of Portugal from unfriendly ships sailing the Atlantic Ocean. (note: our son is being goofy – he’s not exhausted or asleep. He simply hates posing for pictures because he’s five.)

 

A short walk from our Airbnb, the Fonte Luminosa or Luminous Fountain entertains and cools us down from the scorching summer heat.

A short walk from our Airbnb, the Fonte Luminosa or Luminous Fountain, entertains and cools us down from the scorching summer heat.

 

Maybe I'm a transportation nerd, but I loved seeing all the trains go by in this "canyon" next to our airbnb. Our apartment is in the building on the right.

Maybe I’m a transportation nerd, but I loved seeing all the trains go by in this “canyon” next to our airbnb. Every five to seven minutes another local or regional train would pass by.  The subway pops above ground for a bit in the far left of the photo and crosses over the railroad tracks.  Our apartment is in the green building just to the right of center.

 

Just across the railroad track "canyon" from our apartment is this deserted city park. Nice way to burn off some pastel de nata consumed during the stay in Lisbon.

Just across the bridge over the railroad track “canyon” from our apartment is this quiet city park. Nice way to burn off some pastel de nata consumed during the stay in Lisbon.

 

Getting Around

We took the Lisbon transit system every day except the final day when we Uber’d (Ubered?) back to the airport at 6 am Sunday since the metro doesn’t start running till 6:30 am.  It turns out Uber is super cheap in Lisbon and doesn’t cost a lot more than transit tickets for short to medium rides around the city.

The transit system has a subway with several lines complemented by a larger network of buses and trams criss-crossing the greater Lisbon area.  Although Lisbon as a whole is rather inexpensive, the structure of the fare system makes Lisbon transit rather expensive compared to most other European cities we’ve visited.  Single transit tickets run USD$1.50 while 24 hour passes are USD$7 per person.  For tourists, no discounts are available for children or families, and even our five year old had to purchase tickets (a rarity with other transit providers).  Frustratingly, the single tickets are not valid for transfers between buses or transferring between the metro and buses or trams (transfers between subway lines are free).  As a result, the day pass quickly becomes an attractive option if you’re making transfers or planning on taking multiple trips during a day of sightseeing.  We mixed it up with some single tickets and some 24 hour passes to optimize the transit spending.

The 24 hour passes can be used on two separate days.  For example, we lazed about the apartment one morning then set out for the day’s excitement around 1 pm which is when we validated our 24 hour pass.  This meant we could travel all day then up till 1 pm the next day.  A small trick, but helpful to stretch a buck when day passes for five total USD$35 per day.

The day pass lets you ride these historic trolleys around the touristic center of town.

The day pass lets you ride these historic trolleys around the touristic center of town at no additional cost.

 

And go up the various elevators and funiculars around town, all for the price of one $7 24 hour pass.

…And go up the various elevators and funiculars around town, all for the price of one $7 24 hour pass.  Though hard to see from this angle, the elevator starts from the ground level where we took this picture and goes up to the top about 80-100 feet where you can walk out to the street level. It’s a hilly city!

 

Food in Lisbon

On our first night in Lisbon, we were jet-lagged and hungry downtown after a day of sightseeing and trying to stay awake.  The kids were starving and exhausted, so we took a break from the tourist trail and stopped into a doner kebab restaurant for some kebabs (something new to us) and burgers (comfort food for the kids).  The whole meal came in at €29 (or USD$31).

Doner kebab prato (or plate) - a double heaping serving of doner kebab meat, veggie salad, and large french fries on the side for USD$6. It came with a soda which we switched for a beer (beer was cheaper than soda so technically it was a downgrade :) )

Doner kebab prato (or plate) – a double heaping serving of doner kebab meat, veggie salad, and large french fries on the side for USD$6. It came with a soda which we switched for a beer (beer was cheaper than soda so technically it was a downgrade 🙂 )

 

Encore appearance of the doner kebab plate - kebab sandwiches on baguettes with tomatoes and olives from the grocery store! Yummy creative way to consume leftovers from huge portions at the restaurant.

Encore appearance of the doner kebab plate – leftover kebab on baguettes with tomatoes and olives from the grocery store and balsamic vinegar provided by the airbnb host. Yummy creative way to consume leftovers from huge portions at the restaurant.  Nice $1-2 bottle of wine and city view as side dishes.

Since we’re on extended travels with our three kids, it’s usually easier to buy nice foods and dine at home or grab take out, rather than try to get the crowd rounded up for lunch or dinner out somewhere, navigate to a suitable restaurant, then wait for our food to come out when our kids are starving to death literally*.

 

* not literally, but you know how kids can over-dramatize

 

Homemade snack time sampler - croissant, camambert and prosciutto (called presunto in Portuguese)

Homemade snack time sampler – croissant, Camembert and prosciutto (called presunto in Portuguese). I forget the exact cost but a fraction of the US cost. Probably $0.50-.75 for this whole plate.

We visited a Portuguese slash Middle Eastern slash South Asian restaurant and ordered several dishes to share.  Chicken curry, steak and egg, empanadas, grilled fish, and burgers. The total was once again €29 or about USD$31 for the five of us.

Chicken curry

Chicken curry, rice, and salad

 

$5 for 3 empanadas and a $1.50 "quibe" - fried meaty deliciousness

$5 for 3 empanadas and a $1.50 “quibe” – crispy fried meaty deliciousness

 

$5 for a steak dinner? Thanks, Lisbon!

$5 for a steak dinner? Thanks, Lisbon!

 

And for dessert - pastel de nata, the most famous sweet treat from Lisbon. We picked these up from the bakery in the grocery store next to our apartment for $0.35 each.

And for dessert – pastel de nata, the most famous sweet treat from Lisbon. It’s a creamy custard baked in a flaky dough.  We picked these up from the bakery in the grocery store next to our apartment for $0.35 each.

 

The $35 big haul from the grocery store to set us up for good eats at “home”:

I love checking out all the different foods they stock at the grocery stores in other countries. And snapping up cheap buys compared to prices at home.

The grocery store had a hot prepared foods counter so I got several different meat filled pastries, a sausage, some croquettes, and a whole rotisserie chicken.  And check out those presunto flavored potato chips.

We have a habit of buying some good bread and sliced meats and cheeses and packing a light lunch to take on the go.  Then we can have a nice picnic whenever we get hungry, or slide a kid a mini sandwich to eat on the go for an energy boost.

 

Thoughts on Lisbon

We had a good time in the city and thought it was a fun introduction to Europe.  Lisbon offers different sights compared to the rest of Europe since there’s the Moorish influence and the climate is drier and hotter.  For those that have only visited the most popular European destinations like Paris and London, it’ll be a pleasant change of scenery.

 

Celebrating my 37th birthday in Lisbon with ice cream cake!

Celebrating my 37th birthday in Lisbon with ice cream cake!

 

The weather was much hotter than usual with temperatures in the 90’s and 100’s while we were there in June.  But it was a dry heat, so not too bad.  On the worst day when temps hovered in the 100-104F range most of the day, we chose to take a “do nothing day” where we were lazy and didn’t leave the apartment for sightseeing.  Though we did explore the neighborhood park right before nightfall when the temperature dropped.  This is part of our “slow travel” philosophy – take it easy and enjoy the traveling.

 

Moon reflecting on the Tagus River - view from our Airbnb.

Moon reflecting on the Tagus River – view from our Airbnb.

 

Food was good and inexpensive, both at the grocery store and at restaurants.  The city is easy to navigate by transit and Uber is so cheap that it’s a cost-effective alternative if you don’t feel like taking transit (or even cheaper than transit if you have four people in your group, for example).  Overall, prices were about 65-70% of what we would pay in Raleigh, North Carolina.

 

Took this tiny turboprop for a short hop from Lisbon to Malaga, Spain.

Took this tiny turboprop for a short hop from Lisbon to Malaga, Spain. Note the luggage – that’s all we packed for 9 weeks in Europe.  Bookbags plus some small sacks for miscellanies.

 

After Lisbon, we spent nine days in southern Spain spread across the Andalusian cities of Malaga, Granada, and Seville.  Stay tuned for the summary of the Spain leg of our trip.

 

Check out the whole series (so far) of our nine week European family vacation:

 

 

Have you been to Lisbon before?  Any favorite spots we missed? 

 

 

June 2017 Financial Update

This month’s financial update comes to you from Ljubljana, Slovenia – an undiscovered gem in Europe.  We are about to head to Lake Bled, Slovenia for some hiking, lake-lounging, and more relaxing.  After that we’re on to Austria, Germany, and the Czech Republic for the next month before ending our vacation in Amsterdam.  It’s hard to believe we are almost half way through our nine week summer vacation in Europe!

June was another great month financially.  Net worth increased $14,000 to $1,842,000.  Income was very strong at $7,793 during June, while expenses remained moderate at $2,629.  Such a great feeling to watch your assets continue to grow for you while you’re on the other side of the world exploring and relaxing!

Income

Investment income totaled $6,265 for the month.  The majority of our 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.  Of the dividends and interest received during June, around $3,000 was in our taxable brokerage accounts with the remainder deposited into our IRA’s and 401k’s.

Blog income, shown as “other income” in the chart, dropped to $906.  I have a large check from an advertiser waiting for me at home, so the blog income is lower than usual.

My early retirement lifestyle consulting remained steady at $480 for the month.  That represents four hours of work.  Some of that work was completed while in Seville, Spain which technically makes me a “digital nomad” (one who is location independent and works wherever they are).

This guy works hard!

This guy works hard! No vacationing here!

Tough to focus when this is your view of Lisbon from the bay windows!

Tough to focus when this is your view of Lisbon from the bay windows

 

The $141 in Deposits includes cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. 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!).

Part of the “Deposits” income is $125 from something called credit card tradeline sales.  It’s something new I’m trying to pick up some easy cash. The 30 second version is: I add an authorized user to my credit card; the authorized user gets a big boost to their credit score; they pay the credit fixing agency; I get paid. I’ll expand on this explanation in a future blog post if it’s ever something worth recommending to my general readership. So far it’s kind of cumbersome for limited payback potential and comes with non-trivial but manageable risks that I would have to explain in detail.

june-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 June expenses:

june-2017-expenses

We spent $2,629 during the month of June.  We came in several hundred dollars under our budgeted $3,333 per month (or $40,000 per year).  The big expenses this month were travel/vacations and home maintenance (a new roof).

Vacation is underway. La Alhambra in Granada, Spain.

Vacation is underway. La Alhambra in Granada, Spain. And perhaps the only picture where our five year old is smiling normally and looking at the camera. 

 

Travel – $1,290

During June we spent $1,290 here in Europe on our big summer vacation.  I haven’t been tracking this spending in great detail, but looking at the data in Personal Capital, I see $723 in ATM withdrawals (fee free or fee reimbursed, thanks to my Fidelity Cash Management ATM/Debit card).  Of that $723, I still had around $400 in cash at the end of June, so June’s spending is slightly overstated.  The ATM spits out cash and I spend it anywhere that won’t take credit cards.  I don’t keep a detailed list of where this cash goes.

I spent $95 on the annual fee for my new Chase Ink Business credit card. I assess this charge to “Travel” because we’ll use the 80,000 bonus points for signing up for this card to get a free plane ticket or three in the future.

After taking out the $400 that we didn’t spend yet, and the $95 credit card annual fee, we spent a net of $800 in June. About $300 of that is groceries.  $250 on dining out. The remaining $250 we spent on local buses, trains, and subways, Uber, and entrance fees to castles and other attractions.

Groceries – So far we’ve spent roughly $300 for the first 18 days in Europe, or about $17 per day.  Grocery prices in Portugal, Spain, Italy, and Slovenia (where we have visited so far) range from about the same as Raleigh to about a third cheaper.  We aren’t able to take advantage of bulk purchases or shopping big sales, so overall we’re still spending about the same as we do at home in spite of dining out more often here in Europe.

I love checking out all the different foods they stock at the grocery stores in other countries. And snapping up cheap buys compared to prices at home.

I love checking out all the different foods they stock at the grocery stores in other countries. And snapping up cheap buys compared to prices at home.  Prosciutto flavored potato chips! Local pastries. Fresh cherries for a buck per pound. $0.35 fresh baked baguettes. A pound sack of olives for a buck. Croissants, multiple packages of prosciutto. Camambert cheese and duck liver pate.  Beef samosa dumplings, empanadas, and cured bacalhau fish croquettes.  I paid USD$35 for all this.

 

Dining out – we go out to eat about once per day or once every other day.  Even though Europe is supposed to be expensive, we aren’t having a hard time finding meals for €20-30 total for the five of us (about USD$23-34).  Sometimes that’s take out, and sometimes that’s a sit down meal at a simple place.  Even in supposedly expensive Venice, Italy, we found a local pizza place 30 seconds from our Airbnb that serves huge 19-20″ pizzas for €10 (USD$11).  These pizzas wouldn’t fit in the 18″ box so they had to fold the pizza over onto itself to get it in the box.  I also had to incline the pizza box at a 45 degree angle to get it through the narrow doorway of our apartment!  For €20 we fed the whole family and had some leftovers for a midnight snack (and some nibbles at the Piazza San Marco the next day).  Then we broke the bank by ordering a couple of take out seafood pasta dishes that totaled €24.50 (USD$28).

$5 for a steak dinner? Thanks, Lisbon!

$5 for a steak dinner? Thanks, Lisbon!

$5 for 2 empanadas and a "quibe" - fried meaty deliciousness

$5 for 2 empanadas and a “quibe” – fried meaty deliciousness

Most recently in Ljubljana, we spent €27-30 (USD$35 or slightly less) per meal on two meals.  One meal was a nice little cafe with local Slovenian dishes where we ordered some extra sides to try different things.  The lunch special I ordered was €5 (USD$5.60) and came with a medium size salad, pan-fried smoked trout on a bed of rice and spinach, plus a slice of cheesecake for dessert.  Later, we went to the Ljubjana central market and ordered from food trucks and had more than we could eat – burgers, local sausage sandwiches, a local version of stuffed crust pizza, and fried calamari for €27 (USD$30).

The fish and rice part of my 3 course meal in Ljubljana for USD$5.60

The fish and rice part of my 3 course meal in Ljubljana for USD$5.60. Not shown – salad and cheesecake.

 

Transit – Other than a pair of Ubers to catch an early morning flight in Lisbon, we’ve gotten by with buses, subways and local trains everywhere else.  Or our feet.  Local transit usually costs USD$0.70 to $1.50 and sometimes one or two kids ride free.  In almost all cities, it’s cheaper (or mandatory) to buy a transit card for $0.50 to $2.00 and charge it with single rides, or add a day pass for unlimited rides for one or more days.  The most expensive city was Lisbon where everyone had to pay and a one way ride on transit was USD$7 for our family of five.  An Uber to downtown or to the airport is only USD$4-6, but we had to take 2 Ubers since only four passengers can legally ride in an Uber (and yes, I asked if a lap child is acceptable; no, the driver said it was not).  We would have been better off Ubering everywhere if there were only four of us.

Entrance fees – We haven’t had to pay to get into a lot of attractions so far.  Many places are free, or offer free admission on certain days of the week or times of the day.  We worked around these free admission schedules and rarely had to pay an entrance fee.  I think we’ve only paid to get into one museum (well preserved ancient Roman ruins under the city of Seville, Spain, about USD$10 total for the family and totally worth it).  We paid to get into the Sao Jorge castle in Lisbon.  Here in Ljubljana we are paying for entrance to two caves (to be reported in the July financial update).

Random parade in Malaga? Free.

Random parade in Malaga? Free.

Follow the parade into the cathedral? Free.

Follow the parade into the cathedral? Free.

Most in the family aren’t that interested in museums anyway, so we generally skip museums (even if they are free).  I do enjoy the occasional museum so I’ll sometimes leave Mrs. Root of Good with the kids and explore the museum part of an attraction while she rests with the kids (read: the kids drive her crazy).  Even for museums that charge, many are incredibly affordable compared to US prices,  Family admissions for USD$10-20 are common. In a previous month, we paid around USD$40 for La Alhambra tickets in Granada, Spain and that proved to be a cheap price for a nice (but hot) six hour adventure through a beautiful castle, palace, and gardens.

La Alhambra. Amazing to see in person. Can't believe it took us 6 hours to see it all, but it's a massive facility.

La Alhambra. Amazing to see in person. Can’t believe it took us 6 hours to see it all, but it’s a massive facility.

Alcazaba in Malaga - totally free if you time it right

Alcazaba in Malaga – totally free if you time it right. Like a mini Alhambra if you aren’t going to Granada.

 

Transportation between cities and all accommodations were paid for over the past six or eight months, so we’re not spending anything on that right now.

We’re a little below the budget estimate I put together for this trip.  Costs might go up slightly once we enter Germany, but so far I’ve been pleasantly surprised with the moderate costs on the first half of the trip.

 

Home Maintenance – $1,126:

Our portion of the roof replacement was $1,111.  The other 80% of the cost was covered by the insurance company.  It looks really nice, and hopefully it’ll hold up for many years to come.

Work in progress

Work in progress

The remaining $15 in this category is random stuff from Lowe’s to tackle a few small DIY tasks before we left for Europe, plus a gallon of gas for the lawnmower. We’re having a teenager from down the street mow the grass at $20 per mow, and I told him to use our gas to refill his mower so he can avoid hauling the gas can down the street.

 

Groceries – $157:

We left for Europe on June 12, so we only spent a little bit on groceries while in Raleigh.  When we get home in August we’ll have to restock the fridge and freezer so I expect a large grocery bill at that point.

We’re spending quite a bit on groceries while in Europe, but I’m including these in the “Travel” expense category.

At the butcher counter, they'll slice the steak thin for you. Makes it easier to fry up some steak for sandwiches.

At the butcher counter at the grocery store in Lisbon, they’ll slice the steak thin for you (“bife” style the English speaking butcher told me). Makes it easier to fry up some steak for sandwiches.

 

Restaurants – $29:

Went out to eat with our immediate family plus some extended family right before we left for Europe.  Dining out while in Europe is included in the “Travel” expense category.

 

Insurance – $25:

Farm Bureau, the insurer I use, requires a $25 annual membership fee. For some reason they billed me in June whereas I paid the other insurance bills in May.

 

Expenses that were zero during June:

Gas – we didn’t fill up the van in June before leaving on vacation, so we won’t have any gas expenses until August or September when we get back.

Internet – we cancelled internet for the summer since we won’t be using it.

Healthcare/Medical – I prepaid the health insurance through July so we won’t have to worry about that while in Europe.  So far everyone has remained healthy and my extensive first aid kit is still mostly intact.  We chose to skip travel insurance so we are self-insuring for health care here in Europe (other than our emergency coverage through US-based insurance).

Utilities – I prepaid our electric, natural gas, and water bills for several months ahead during prior months.  This was mostly to meet the minimum spending requirements for a series of credit cards we applied for this winter and spring that gave us 360,000 airline miles.  It doesn’t take much to score free tickets to Mexico, the Caribbean, or Europe (we traveled to Europe on free plane tickets, for example).

Do you like free travel as much as I do?  Check out all the credit card sign up bonuses.  Or go directly to the Chase Ink Business Preferred card with an 80,000 point bonus (any size business qualifies you for a business card).  For reference, 80,000 points can fly you almost anywhere in the world on a variety of frequent flyer programs, or get you three domestic round trip tickets.

We spent USD$21 to get into the Sao Jorge Castle in Lisbon. Very nice castle, and our first castle in Europe.

We spent USD$21 to get into the Sao Jorge Castle in Lisbon. Very nice castle, and our first castle in Europe.  Great views all around the city and the bay too.

 

Year to Date Living Expenses for 2017

june-2017-expenses-ytd

We have spent a total of $14,316 for the first half of 2017 (through the end of June).  That is $5,700 below our annual spending target of $20,000 budgeted for the first six months of the year.  I’m a little dumbfounded by this running total since I feel like we’re living a pretty luxurious lifestyle (what I call a $100,000 lifestyle on $40,000 per year).

The bulk of the planned big ticket spending for 2017 is over and on the books at this point. The new roof came in much cheaper than expected thanks to receiving over $4,000 from our insurance company for hail and wind damage.  Our Europe trip is on track for our $10,000 total budget for the nine weeks.  July shouldn’t have more than another $2,000-$2,500 in trip expenses.  There’s a good chance we’ll close out 2017 with a nice budget surplus if nothing unexpected pops up.  It’s also possible we won’t break $30,000 in spending for the year!

 

Monthly Expense Summary for 2017:

 

Net Worth: $1,842,000 (+$14,000)

Another month, another strong net worth boost.  I miss the days of up and down markets where we occasionally lost $50,000 or $100,000 in really bad months.  Right now it’s just up, up and more up.  Which means the odds of down, down, and more down increase.  june-2017-net-worth

 

In the meantime, we’ll continue mostly disregarding market performance.  I might move another $25,000 into the Vanguard Total Bond Market index fund if markets keep going up like they have been.

Life's a beach, man. Total beach.

Life’s a beach, man. Total beach. First time dipping toes in the Mediterranean Sea while in Malaga, Spain.

 

Ok, back to traipsing across Europe!  Hopefully I can carve out some time to provide a more in depth trip report for all these places we’re visiting.

 

 

How is your summer going?  Still enjoying the perpetual stock market gains? 

 

 

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