Author Archives: JustinRoG

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).  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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May 2017 Financial Update

May is all done, and it proved to be another great month for our household.  Our net worth climbed $23,000 to $1,828,000 (another all time record high).  Our income was huge at $9,149 while our expenses remained moderate at $1,829.

The kids are out of school in a few more days and we head out for our nine week summer vacation in Europe in less than a week!  Exciting, busy times for us.  Let’s check out how we did last month.

Income

Our investment income was $201 in May.  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.  The $201 is the interest from our roughly $125,000 investment in our money market account and bond fund.  In June we’ll be getting several thousand dollars in dividend income since it marks the end of the quarter.

Blog income, shown as “other income” in the chart, zoomed to $8,026.  This is much higher than normal and reflects two months of revenue from a major advertiser.  June and July will be puny months for blog income because I won’t be here to cash the checks.  August, however should be very nice.

My early retirement lifestyle consulting slowed down to $486 income.  That represents four hours of work.  As part of that time, I helped someone with the technical and creative aspects of their blog.

Great blue heron taking flight on our lake.

Great blue heron taking flight on our lake.

The $435 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!).  The Ebates payment was larger than usual due to referral bonuses from this blog.

may-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 May expenses:

may-2017-expenses

At $1,829 total spending for the month of May, we are well under our budgeted $3,333 per month (or $40,000 per year).  Most of the monthly expenses went toward insurance, an expense that comes up every six to twelve months.

 

Insurance – $937:

$227 for six months of auto insurance for the two of us. $603 for one year of homeowner’s insurance. $108 for $1 million umbrella policy.  That homeowner’s policy came in handy when it came time to replace our roof!

 

Travel – $235:

Train tickets and bus tickets for Munich to Prague and Prague to Berlin.  Tickets to El Alhambra in Granada, Spain.  $1 online mail forwarding fee from the US Postal Service.

$95 annual fee for the Chase Ink credit card (which will score me 80,000 Chase Ultimate Rewards points = $800-1,000+ of travel).

Free entertainment - I spent a day playing the solo tourist in Raleigh. State Capitol building.

Free entertainment – I spent a day playing the solo tourist in Raleigh. State Capitol building.

 

Healthcare/Medical – $188:

$111 for a dental visit. For the adults in the house, we pay cash for our dentist visits since we don’t have dental insurance.

$27 for lab work from my routine physical. Before insurance the labs were $400 but insurance negotiated the total down to $27 (which I had to pay in full since my deductible is $100).

In May, I pre-paid three months of health insurance at $16 per month so I wouldn’t have to worry about paying the bill while we are on the road in Europe.  We get a huge Advanced Premium Tax Credit courtesy of the Affordable Care Act, so we pay almost nothing for gold-plated health insurance.

The future of the Affordable Care Act is still in limbo.  Based on the last I’ve seen of the AHCA, the replacement for the ACA, we’ll have roughly the same kind of ACA coverage through 2019 with changes to the structure of the subsidy starting in 2020.  I haven’t heard a lot about the AHCA now that it’s in the Senate, so I don’t have any real news to share beyond what I mentioned in last month’s financial update (skip to the section on healthcare/medical expenses).

 

Groceries – $184:

This category was kind a shocker.  We usually spend $400-600 on groceries in an average month.  We are trying to “eat all the food in the fridge, freezer, and pantry” before leaving for the entire summer, so I guess we didn’t buy much.  I checked the Personal Capital data to make sure there’s no error and the individual shopping trips are certainly there.

However, the dollar amounts are tiny because we didn’t stock up on anything.  $30-40 at Aldi buys a trunk full of groceries that, along with food from our freezer and pantry, lets us eat pretty well for a week.

I’m sure we’ll spend a ton on groceries when we return from Europe.  We already started a shopping list that’s growing longer and longer.

We gave a friend a bunch of pho. She returned the favor with homemade Salvadorean tamales and dim sum dumplings.

We gave a friend a bunch of pho. She returned the favor with homemade Salvadorean tamales and dim sum dumplings.

 

Restaurants – $59:

We went out to eat twice. Once to the neighborhood Chinese restaurant and once to the neighborhood pizza place.  This is one area where the prices DO go up as the kids get older.  The oldest, now 12, pays adult prices at both of these restaurants whereas her two younger siblings still enjoy the kid’s menu pricing.  It’s only a buck or two extra, but it adds up once you stack tax and tip.

 

Home Maintenance – $50:

I bought a $50 gift card for Lowe’s Hardware from the grocery store to earn a $10 off coupon on groceries. I’ll be using the gift card to tackle a few projects around the house before we leave for Europe (time permitting).

 

Charity – $50:

Friend gets cancer – we kick in a few bucks through her GoFundMe.  Sounds like the operation was a huge success and recovery is going well.

Helping kick cancer's ass.

Helping kick cancer’s ass.

 

Cable (Internet) – $44:

Monthly internet bill with Spectrum (formerly Time Warner). We get 100 mbit download and 5 mbit upload.  Over the summer while we will be gone, we’re cancelling the service and hopefully we can restart service at the same price or even lower.  I’m investigating their “low income” pricing that offers 30 mbit service for $15 per month but not sure how many hoops we’ll have to jump through to land that deal.  I know we can’t have had service in the past 30 days before signing up, so our departure for over two months works out perfectly.

 

Gas – $37:

One tank of gas for the van.  It’s still mostly full almost a week into June.  Won’t have to refill the van till September probably!

Drove out to the City's Nature Preserve for some canoeing.

Drove out to the City’s Nature Preserve for some canoeing.

 

Miscellaneous – $40:

Not shown on the expense summary graphic are:

  • quarterly service fees of $15 (Mrs. RoG’s 401k – has access to institutional class index funds)
  • Gifts $10 – photos for end of year gifts for our kids’ friends
  • Telephone $10 – put $10 on Google Voice for international phone calls. I had to call Ticketmaster Spain to buy super popular El Alhambra tickets two months ahead of our visit and the website won’t take US credit cards online.  I can refund any unused funds within one year.
  • Education $5 – End of school festival for the middle school student
  • Entertainment $1 – Computer games from Humble Bundle
Check out this fat snapping turtle. Hanging out in our backyard.

Check out this fat snapping turtle hanging out in our backyard.

Maybe he was smelling the flowers.

Maybe he was smelling the flowers.

 

Utilities – $0 (and travel hacking advice!):

You may notice there is no line item for utility bills.  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.  And to make sure we didn’t have to mess with any bills while on our summer travels.

I signed up for:

  • Mr. Root of Good Chase Sapphire Reserve card – 100,000 Ultimate Reward points
  • Mrs. Root of Good Chase Sapphire Reserve card – 100,000 Ultimate Reward points
  • Mr. Root of Good Chase Ink Business Preferred card – 80,000 Ultimate Reward points
  • Mrs. Root of Good Chase Ink Business Preferred card – 80,000 Ultimate Reward points

By June or July we’ll have 360,000 Chase Ultimate Reward points which we can redeem for $4,800 worth of travel, transfer as 360,000 airline miles or hotel points, or cut ourselves a check for $3,600 cash.  Not a bad haul for a few credit cards.

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.

Problems with mice or snakes? Not with this hungry red shouldered hawk hanging out on our fence.

Problems with mice or snakes? Not with this hungry red shouldered hawk hanging out on our fence (in the rain).

 

Year to Date Living Expenses for 2017

may-2017-expenses-ytd

Through the end of May we’ve only spent $11,687.  That’s $5,000 below our annual spending target of $16,667 budgeted for the first five months of the year.  So far so good!

The two remaining big cost items for 2017 are the roof replacement and our trip to Europe.  Our new roof is installed!  I still have a few punch list items (which are minimal) and haven’t paid for the roof yet, but it looks like we’ll end up paying $950 out of pocket after factoring in what the insurance paid us for replacement of the roof.  That’s a lot better than the $4,000 to $8,000 I was anticipating before I found out our roof was a total loss due to wind and hail damage.  And in the process of installing the new roof, we added ridge vents and upgraded the gutters.

We’ve already booked and paid for roughly $6,000 out of our $10,000 total budget for our nine week Europe trip this summer.  The remaining $4,000 of vacation spending will be concentrated in June through August while we are overseas.  The good news is we won’t be spending much to maintain our home or car here in Raleigh while we’re traveling, so our monthly expenses probably won’t exceed $2,000 to $3,000.

In other words, we should still be under budget by around $4,000 to $5,000 by the end of summer unless something unexpected (and expensive) pops up during the summer.

Work in progress

Work in progress

Final product. Minus the 2nd story gutters that were installed in June.

Final product. Minus the 2nd story gutters that were installed in June.

 

Monthly Expense Summary for 2017:

 

Net Worth: $1,828,000 (+$23,000)

Wow, another huge gain in net worth.  That makes five out of five months in 2017 with strong net worth increases.  Year to date we’re up $148,000 (which is enough to buy a modest house around here).

At some point we’ll hit a soft spot in the economy and the back to back to back net worth gains will invert themselves into losses.  Maybe this month, maybe next month, maybe next year, or maybe even further out.  I’m pretty horrible at timing the market so I won’t guess when this current bull market will turn the other way.
may-2017-net-worth

As I mentioned last month, I was considering moving another $25,000 from equities to bonds.  I carried through on that plan in mid-May, thereby bringing our cash and bond total to $125,000.  This is enough to cover three to four years of living expenses when you add in the taxable dividends we’ll receive over that time period.  The average recession lasts a year or two, so that should be plenty of stable, liquid assets to support us during the next downtown in the markets.  I might move another $25,000 to bonds if the market keeps on going up.

Last month I shared how our early retirement finances turned out way better than we expected – like a half million dollars better!  We haven’t made any huge changes to our lifestyle as the net worth figure crept up.  It’s mostly small changes in spending.  I could have saved some money on the roof if I did a few of the simple parts myself.  But why bother since we can afford to outsource it?  We saw a friend in need and made a small charitable contribution to help out.  On our Europe trip, we’ll be spending more freely than we have on past trips.

These are all relatively modest spending increases, and are purely discretionary.  Should we find ourselves suddenly $500,000 to $750,000 poorer (not impossible with a 90%+ stock asset allocation), we could minimize these type of expenses to stretch our cash stockpile as long as possible.  However, if we continue growing wealthier long term (which is the more likely outcome), then we’ll continue to look for small opportunities to increase our spending where it brings value, comfort, and convenience.

Our youngest graduated preschool!

Our youngest graduated preschool!

That’s it for this month’s installment of “what we made / what we spent”.  We’ll be off to Europe in less than a week and hopefully sharing some pictures throughout our summer trip.  Once we return in mid-August, it’ll be a whirlwind of reconnecting with family and friends, hosting a birthday party/sleepover for our daughter, and attending back to school orientations.  During September, our daily lifestyle will morph quite a bit since our youngest child is entering kindergarten.  It’ll be interesting to see how our interests and activities change once we have seven hours of kid-free time five days per week!

 

 

Summer is almost here!  Any fun plans?  Any big money plans now that your investments have most likely grown a lot?  

 

 

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Our Early Retirement Didn’t Go As Planned… Our Net Worth Went UP Half a Million Dollars!

In contrast to early retirement modeling that looks for all the worst cases and failure modes, our actual life the past almost four years illustrates that good things can offset the bad events in life.

Financial planning for early retirement is pretty straightforward.  Figure out how much you plan on spending in early retirement then save up till you have between 25 and 33 times your annual expenses in your investment portfolio.  We initially planned on spending $32,000 per year plus a large lump sum for the three kids’ college tuition.  Using the 33x multiplier (which represents a 3% withdrawal rate), that means we needed $1,056,000 plus another $100,000 to cover tuition, or roughly $1,150,000 in total investments.  That’s about what we started with four years ago but now we have a lot more.

 

The Good:

We plan for the worst and hope for the best.  Fortunately, the past four year have been very positive.  Maybe we used our luck making machine.  Or maybe we aren’t as lucky as we think.  We’re earning more than we thought and spending about what we expected, and future expenses don’t look too bad.

More Work, More Money

When I quit working in 2013, we expected Mrs. Root of Good to join me in early retirement within six months.  Then her employer decided to be really really nice to her so she kept working longer than expected.  Her employer met her requests to take a paid five week summer sabbatical in 2014, and again agreed to a paid sabbatical of twelve weeks in 2015.  The sabbaticals were on top of a 40 hour work week with negligible overtime, four weeks paid vacation, two weeks of holidays, and unlimited sick leave.  After returning from the second sabbatical in 2015, Mrs. Root of Good submitted her resignation and tried to retire.

Unsuccessfully as it turned out.  Her employer offered a flexible work from home arrangement where she officially works from home for four 10 hour days per week.  The boss gave her a **wink wink, nod nod** and said she just needed to work enough each week to make sure nothing fell through the cracks as they worked toward replacing her.  She generally worked Monday-Wednesday for six to eight hours per day and some Thursdays, probably averaging 30 hours per week.  While still collecting full time pay!  This part-time-for-full-time lasted about six months before Mrs. Root of Good finally called it quits and promoted herself from part time work to full time retirement.

Mrs. Root of Good’s extra two years of work netted us around $120,000 after taxes and work-related costs in my estimate (she was earning $70,000 gross per year and we paid nearly zero federal income tax but we stilled owed payroll tax plus state income tax).  Toss that $120,000 on the pile and watch it grow!

Mrs. RoG enjoying her first day of sabbatical.

Mrs. RoG enjoying her first day of the flexible work from home arrangement that doesn’t include working on Fridays.

 

Who knew you could make money blogging?

I always wanted to do something “internet-y” and finance related while working but never found myself in a professional role that fit that desire.  About two weeks after retiring, I started looking into this whole blogging thing.  Mr. Money Mustache had a pretty sweet site so I figured maybe it would be fun to do something similar.  I spent the weekend reading and googling and youtubing all about how to start a blog.  How great is it to be able to jump into a new exciting project head first when you don’t have to deal with work all day?!

Two days after I started the intense blog research I figured out enough to register the Rootofgood.com domain name, set up my hosting service, and then I sat staring at that blinking cursor waiting for me to start typing.  The first couple of words I typed were “HELLO WORLD” (of course).  My little homage to all things programming/internet-y. Then I deleted it and got down to business (first ever real blog post and ALL THE BLOG POSTS EVER).

Almost four years and three million pageviews later, this blog is a little dynamo.  Root of Good currently receives an average of 50,000 to 60,000 visits per month.  In late 2015 I started offering Early Retirement Lifestyle Consulting.  Since conception, the net profit from the blog and related activities was:

  • 2013 – near zero
  • 2014 – $12,000
  • 2015 – $29,000
  • 2016 – $31,000
  • 2017 – roughly the same as 2016

Toss another $72,000 on the pile plus whatever we earn this year.

Though not all early retirees start a blog, many early retirees have a side hustle.  Some early retirees turn a hobby into something profitable.  Others retire from full time work while keeping the door open to very part time, flexible work arrangements by only accepting those projects or clients that fit into their early retired lifestyles.  I did both when I started a blog for fun that turned profitable within the first year and I started consulting an hour or two per week (less when the weather is nice outside).

When planning for early retirement many years ago, I occasionally used a “part time income in retirement” line item for forecasting purposes.  At the time I used a tiny annual income for this part time work.  In one model, I assumed I might earn $6,000 per year doing something one day per week for $15 per hour.  This was based on a little side hustle related to engineering data collection that I had some success with during college.  But more generally, $15 per hour represents a pretty broad swath of potential jobs and hustles, and eight hours per week isn’t a huge impediment to otherwise enjoying one’s leisure time throughout the week.  I could mow lawns, start a handyman business, repair appliances, run errands for the elderly and disabled, or drive for Uber (which wasn’t a thing when I was completing my early retirement models and forecasts).

The very part time work for $15/hr was more of a Plan B “what if” scenario.  Adding $6,000 income per year to supplement withdrawals from an investment portfolio means you can get by on a smaller portfolio using the four percent rule.

As fate would have it, I’m blowing that $15/hr threshold out of the water (ER Lifestyle Consulting rates are currently $125/hr and I’m considering raising those given the demand).  Total earnings from my side hustles are running in the $30,000 per year range right now.  And I don’t think I’m putting in eight hours of effort per week.  Life is good as is the financial solvency of my early retirement plans.

 

Spending is in line with budgeted amounts

We started out budgeting $32,000 per year for 2014 and increased it to $32,400 in 2015 to account for inflation.  In 2016 we bumped the budget to $40,000 in light of all the extra side hustle income and better than expected investment results.

Actual spending since 2014 remained pretty close to our annual budget:

We were over budget in 2014 by a few thousand dollars but under budget all other years so far.  That underspending comes in the face of an almost $9,000 major renovation in 2014, an $8,000 minivan purchase in 2016, and paying for the bulk of a $10,000 nine week trip to Europe in 2016 and 2017 (along with several other multi-week or multi-month trips in previous years).  In other words, we have a rather robust spending plan to fund a whole lotta living and the budget seems to be working out perfectly fine.

Four months of spending at just under $10,000 (Personal Capital screenshot).

Four months of spending in 2017 at just under $10,000 (Personal Capital screenshot).

And this is with three kids!  They are now age 5, 10, and 12 years old.  I’ll admit that we’re still a year away from the oldest starting the typically more spendy teen years, but so far we haven’t noticed a significant spike in spending as the kids get older.

Since we’ve already replaced the exterior siding and the windows, and we’re in the middle of replacing the roof right now, we don’t have a lot of major home improvement projects planned for the near future, so spending on the home should remain modest.  We just replaced the car last year, so that should last us quite a while too.  Those big house-related capital replacement costs are amortized and included in our annual budget.

Another area that can bust a budget is healthcare and dental expenses.  We’ve been fortunate to spend very little in this category other than a few doctor’s visits and routine dental checkups (plus a few minor procedures at the doc and dentist).  We haven’t used up our whole healthcare/dental budget in any year of retirement.

We track all our monthly spending in Personal Capital.  It’s a free, easy to use, and automatically pulls transaction data from credit cards and bank accounts so you don’t have to spend any time inputting transactions manually (or maintain another spreadsheet!).  Review of Personal Capital.  It’s also a great tool to consolidate and track your brokerage accounts, IRA’s, and 401k’s so you can track your asset allocation and keep an eye on mutual fund expenses automatically.  Tracking spending is in my opinion the best way to stay cognizant of where your hard earned money goes and what expense categories are dominating your budget.

 

College won’t cost as much as we initially budgeted

By most objective metrics, we are wealthy.  I assumed we wouldn’t qualify for any need-based financial aid for the kids’ college.  I was wrong.  I found out the FAFSA financial aid form doesn’t include the home value nor does it include retirement account values in determining financial aid.  As a result we look relatively poor on paper due to having over 75% of our financial assets in retirement accounts and a modest adjusted gross income around $40,000 per year.

Upon entering early retirement in 2013, I expected to pay around $100,000 in total just for tuition for 3 kids and almost triple that amount if we cover room and board, books, transportation, and other living expenses.

After crunching some numbers on college costs using a few different assumptions, it looks like the worst case scenario will have us paying around $162,000 total while the best case scenario (which isn’t that far-fetched) has us paying just $31,500.  Those are totals for all three kids.  The updated forecasts come from better assumptions about scholarships and grants our children might qualify for given their academic achievements to date, along with a better understanding of how financial aid formulas work.  When I first retired, our oldest two kids were in second and third grade, and we really didn’t know how well they would do in school once the academics grew more challenging.  Several years later and they are doing great!

yale-university-doorway

 

Great stock market returns

Since I retired early, the stock market has been on fire!  As measured by the Vanguard Total Stock Market Index Fund (VTSMX), returns including reinvestment of dividends are:

  • 2013 – 33.4%
  • 2014 – 12.4%
  • 2015 – 0.3%
  • 2016 – 12.5%
  • 2017 (year to date through May 12) – 7.0%

International investments haven’t performed quite as well over the same period.  Our portfolio still managed to swell from around $1.1 million right after I retired up to $1.65 million today.  That’s a $550,000 increase in value.  About $100,000 of that increase can be attributed to Mrs. Root of Good’s extra two years of paychecks and my blog earnings (after subtracting the roughly $100,000 spent on living expenses during early retirement).  That still leaves us with roughly $450,000 of investment gains in the past four years.  Thanks Mr. Stock Market!

The returns have been so great that since the start of 2017 I have moved $90,000 from equities into the Vanguard Total Bond Market Index Fund (VBTLX).  Those bonds plus the $30,000 we have sitting in money market accounts will provide a multi-year safety blanket should the market decide that the party is over.  A six figure low-risk fixed income portfolio will help me sleep at night regardless of market volatility.

 

Successful travel hacking continues

I’ve been scoring huge credit card sign up bonuses and collecting points and miles from credit cards for over a decade.  Upon entering retirement in 2013, I fretted over the eventual end of all these easy bonuses that translate to free trips all over the world, even for our family of five.

It turns out I had nothing to worry about after earning 1,265,000 points and miles from sign up bonus offers in the almost four years of early retirement.  This gravy train keeps rolling down the tracks and shows no signs of stopping!  Some of the rules of the game have changed (Chase’s 5/24 rule is a key example) but there are still plenty of fish in the sea. So cast your net wide and don’t let all these delicious morsels slip past you.  Our credit scores remain a killer 800-something (out of 850 points) and card issuers generally don’t bat an eye at extending us even more credit.

All these free points and miles explain how we’re able to travel the world for weeks or months each year on a modest $5,000 to $10,000 annual budget.  Without free points and miles we would be incurring an extra $5,000-$10,000 expense per trip based on the past few trips.

two-years-early-retirement-mexico

 

No more work = no more work related costs

I’m sure we save a small amount on lunches out and simpler wardrobes (shorts and polos just don’t cost that much, guys).  But the biggest work-related cost that disappeared was our second car.  We questioned whether we could cut back to one car and it turns out it’s not a problem at all with our current lifestyle.  It’s been almost a year since we dropped to one car and there have been just a few times where it would have been nice to have a second car.  But we made it work with just one car.

This one car does it all for us.

This one car does it all for us.

We walk, we can take transit, Uber is always a few clicks away (though we’ve never used it so far).  Postponing or combining trips and smartly scheduling appointments help.  We also enjoy spending time at home or within walking distance in the neighborhood, so there are multi-day stretches were our car doesn’t leave the driveway (but our feet still do!).

The money savings are unquestionable – maintaining one car costs half of what it does to maintain two cars. One set of tires, one set of oil changes, one set of routine maintenance, one set of inspections, registration/licensing, insurance, and taxes.  The time savings are even more important – fewer trips to the auto shop for repairs and maintenance.  It takes less time to check the tire pressure and fluid levels in one car versus two cars.

For us, simplifying saves time and money without being a detriment to our lifestyle.  Of course others’ experiences might differ.  We only drive about 300 miles per month (unless we’re on the road completing a multi-thousand mile road trip).  Many destinations are walking distance in the neighborhood. Our kids aren’t overloaded with after school and weekend activities (though we stay busy!).

 

The Bad:

I feel like we need a counterpoint to “The Good” so I’m sticking “The Bad” in here.

 

Health Insurance in a Post-ACA World

The future of health insurance is our biggest unknown going forward.  There’s a new sheriff in town and he’s adamant that the Affordable Care Act is horrible and must be repealed and replaced.  The replacement bill, the AHCA, recently passed the House and now sits with the Senate for further sausage-making.  What will we end up with?  Your guess is as good as mine.  The following is an excerpt from my April 2017 Financial Update article where I opine about the current health insurance situation in the US:

“Let’s look at the details of the AHCA as passed by the House.  Here’s the best summary I’ve seen of the current version of the AHCA compared to the ACA (courtesy of the non-partisan Kaiser Family Foundation).

Main takeaways:

  • ACA premium subsidies continue through 2017, 2018, and 2019 (so it’s not an immediate “repeal”). Your subsidy declines as your income increases up to 400% of the federal poverty level.
  • Starting in 2020 those buying individual coverage get a $2,000 to $4,000 tax credit per person for qualifying insurance (and policies don’t have to be purchased through the official Healthcare.gov Marketplace to qualify for the tax credit). Tax credits vary with age (older = larger credit) but not with income, however there are income limits where the tax credit phases out
  • Cost sharing reduction subsidies disappear in 2020 (currently available to those earning under 250% of the federal poverty level – it’s what makes my deductible $100, max out of pocket $1,200, and my copays $5-20)
  • In 2018, HSA contribution limits double to $13,100 for family coverage.
  • If a state chooses to allow it, insurers can charge more for pre-existing conditions for those that have a lapse in coverage. Possibly much, much more. Maintaining continuous coverage seems to be the way to go to avoid paying a lot more for pre-existing conditions.
  • Increase the age banding of premiums so that the premiums paid by older people aren’t capped at three times the premiums charged to the youngest people (under AHCA older people will pay five times what younger people pay – while only getting an extra $2,000 in tax credits)
  • No more individual mandate to have health insurance retroactive to 2016

Those are the basics but trust me, I’m leaving a lot out.  Medicaid and Medicare are tinkered with too.

The Senate will most likely make significant modifications to the AHCA, so it’s pure speculation as to what we’ll actually end up with once all the sausage is made.

My main takeaway as a 30-something early retiree that will be 40 by the time the ACA premium subsidies go away in 2020 is that I’ll be paying more for health insurance that will come with higher deductibles and copays.  Mrs. Root of Good and I will each get a $3,000 tax credit to use toward insurance that will probably cost $4,000-$5,000 per year per person for a basic plan, and possibly much more if healthy people choose to go uninsured (since the individual mandate will be gone and many people will pay more for health insurance, making it less affordable).  I don’t know what the kids’ policy pricing will look like or if they’ll end up on Medicaid (if that’s still an option given the possibility of AHCA-related changes to Medicaid), but I understand they’ll be eligible for $2,000 tax credits too (based on their age) if we purchase individual policies for them.

In conclusion, I’m mentally penciling in an extra $4,000 or so for health insurance and healthcare costs starting in 2020, but also accepting that a lot can change with the AHCA before passage (or it might fail altogether).  There might be a subsequent health care bill passed later on in 2018 or 2020 as the political winds change that could put our costs back in line with where they are currently under the ACA.” (end excerpt)

If this bill passes then the near-term damage of this law won’t be horrible.  But it’s still a lot of uncertainty in our early retirement financial plan.

A silver lining of the Republican controlled White House and both houses of Congress: tax cuts.  I’ve heard mutterings about higher child tax credits and larger standard deductions, which could save us some money on taxes to partially offset higher health insurance costs (or, rather, lower health insurance tax credits versus what we get under the Affordable Care Act).  Tax cuts can potentially benefit the economy depending on how they are structured, so it’s possible we’ll see investment gains too.

Stop and smell the roses

Stop and smell the roses

 

Have we reached the top in the stock market?

I’ll be the first to admit I have no clue but I know it’s been on a winning streak the past four years.  That’s not to say it can’t keep going up for several more years.  However, there’s a lower chance of strong continued gains year after year simply because there’s less room to grow when the market is already at high valuations compared to long term historical averages.  It’s the exact reason you would have expected big stock market gains in the long term back about 2009 when the market was valued at a third of what it is today.  From deep valleys rise tall mountains.

Our portfolio might experience several years of sideways movement or suffer a double digit percentage decline.  Either of those scenarios are fairly common in the recent history of investing and it’s most certainly not different this time around.  That’s not pessimism speaking but rather realism.  It won’t mean the end of everyone’s early retirements but it will certainly mean we will keep a closer eye on expenses and income.  However our $120,000 of bond funds plus money market funds will provide a lot of stability for several years in the event of a market downturn.

 

Spending more on travel

I roughly doubled our travel budget from $5,400 when I first retired to $10,000 today.  We didn’t really know how much we would travel since our working lives were filled with work work work and just a few weeks of vacation time each year.  Travel is our safety relief valve – when our portfolio fills up to the top, this is where we let out the monetary steam.  We spend more on travel.  If we have to tighten our belts we can cut back in this area.

We’re also taking advantage of geographic arbitrage by traveling to places where the foreign exchange rate makes everything cheaper.  In 2015 that was Mexico (though we would have saved even more by waiting till 2017!).  In 2016 that was Canada.  2017 is a perfect time to visit Europe with the euro trading at the cheapest levels of the past decade.  If foreign currencies grow significantly stronger (= overseas travel becomes more expensive) then we might knock a few US destinations off our bucket list.

And if our portfolio drops by a half million dollars, we can cut out a huge chunk of spending simply by traveling less or choosing less expensive destinations.  I’m sort of looking forward to spending a lazy summer at home at some point in the near future, and a financial reason to skip a summer filled with travel wouldn’t be entirely unwelcome.

Spending more on travel is a good thing because it’s so easy to trim this spending versus other areas of the budget that are more rigid like housing costs or transportation costs.

Wouldn't mind a summer hanging around our house at all. :)

Wouldn’t mind a summer hanging around our house at all. 🙂

 

Almost four years into retirement, where are we now?

In a few months I’ll celebrate four years of early retirement.  From a financial perspective we are doing great.  We earned close to $200,000 extra that wasn’t anticipated due to starting this blog and Mrs. Root of Good working a couple years longer than expected.  Our investments have grown by an even larger sum.  And we’re keeping our spending generally at or below budget.

Our living expenses in retirement are funded from roughly $10,000 dividends and interest per year plus $30,000 income from Root of Good.  That means we don’t really have to sell any investments on a routine basis for living expenses.  Nor do we have to worry about withdrawing investments from IRA’s, 401k’s or my 457 account.

It also means the Roth IRA Conversion Ladder I planned to set up is partially on hold for now.  I still managed to convert around $4,000 from traditional to Roth IRA in 2016, whereas my Roth IRA Conversion Ladder plan called for conversions of $24,000 per year.  However, I was able to contribute $18,000 to my solo Roth 401k and $11,000 to his and hers Roth IRAs during 2016.  Yes, I have a Root of Good 401k plan and I play a shell game by living off the income from Root of Good while shuttling taxable funds into the Roth accounts.  You could say I’m “living off my portfolio like a real early retiree” and saving the $30,000 Root of Good income, which is also a legitimate way of describing my early retirement finances if one wanted to downplay the significance of the side hustle income (I don’t).  It’s a game of semantics.

The net result is $33,000 of additional Roth assets from conversions and contributions during 2016.  In other words, I didn’t follow my original plan but I accomplished a similar goal – increase the amount of funds in the Roth space so I can withdraw the contributions/conversions penalty free and tax free well before age 59.5 should that be necessary.

The unexpected income from Root of Good also means my decision to choose the Roth IRA Conversion Ladder over the competing 72(t) Substantially Equal Periodic Payments method of withdrawal was a sound one.  The 72(t) method is extremely rigid in the amounts you must withdraw each year once you start your initial withdrawals.  However, I knew going into early retirement that my income needs would vary year to year and there was always the chance I would have earned income (or get bored and go back to some form of work).  As a result, I rejected the 72(t) withdrawal method mainly because of the lack of flexibility in withdrawals.  I would really hate to be taking $30,000 of 72(t) taxable IRA withdrawals while earning another $40,000 between this blog and dividends and interest.

 

Now where are we headed?

Things look pretty rosy.  I took my financials and dumped them into the wonderful early retirement calculator at cFIREsim.com and determined that we could spend somewhere around $65,000 per year with almost zero chance of running out of money before age 90 even when we make conservative assumptions about income from the blog and other side hustle income.  Helping shore up the forecast is roughly $25,000 of expected Social Security income that we’ll start drawing in a little less than 30 years.

I don’t know that we’ll spend $65,000 per year but it’s reassuring to know that money isn’t a real constraint to our lifestyle.  We could increase our budget by 50% to cover a lot of unknowns such as higher health care/insurance costs and higher kid-related costs during the teen years.

Four years into retirement and our potential standard of living is approximately double what it was when I quit working.  It’s not entirely surprising given the conservatism of the worst case analysis performed under the “four percent rule”.  Most of the scenarios modeled in the four percent rule (which is closer to a three percent rule for very early retirees) leave the retiree with several times their initial portfolio value.  End result: a growing net worth in real terms for most very early retirees.

However I keep in mind that we might be at the top of a stock market bubble that’s about to burst and that we might see hundreds of thousands of dollars of our net worth disappear in a short period of time.  In that case, I’ll have to revisit what we are able to spend.  Until then, I’m not gonna worry about money and I’ll keep an optimistic but flexible attitude toward the future.

 

 

Any early retirees in the audience that ended up with substantially more than they started with?  Or did early retirement lead to new ventures or interests that turned profitable?  For those planning on retiring soon, do you have any plans to hustle on the side?  Let me know!

 

 

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