Category Archives: Lifestyle

Exploring Caves and Castles in Ljubljana, Slovenia

The seventh stop on our nine week summer vacation across Europe brought us to Ljubljana, Slovenia.  If you’ve never heard of Ljubljana or Slovenia, then you are missing out on a hidden gem of Europe.  We randomly stumbled on this country while looking at pictures of Europe and decided it was a must-see destination. It did not disappoint.

While in Ljubljana, we explored the city for several days and visited the castle atop the central hill in town.  We took a few day trips to two caves and a castle.  In addition to the sightseeing, this was our first opportunity to take it easy since we had a full week in Ljubljana (after six previous stops on our trip with only two to five days stay in each city).  We embraced the slow travel lifestyle and spent a couple of days “doing nothing” and relaxing.

Ljubljana is a mouthful. It’s pronounced LOOB-LEE-ANNA and rhymes with the performer Rihanna. Now you can tell all your friends about LOOB-LEE-ANNA!

Fun facts: Slovenia used to be a part of Yugoslavia. It was a communist country for several decades.  Slovenia tops the ranks of the Gini index, a measure of income equality.  It only has two million people, about the same population as the state of New Mexico.  It’s tiny. If it were a US State, it would be the fourth smallest in size, falling between New Jersey and Connecticut. Our First Lady Melania Trump is from Slovenia (though her name at birth was Melanija – the “j” sounds like a “y” in Slovenian).

We didn’t see Melania or visit her home village, but we did see a bunch of friendly, laid back people in Ljubljana and the rest of Slovenia!

Here’s a recap of our trip in Europe so far.  We started our journey in Lisbon, Portugal, then flew to Malaga in southern Spain before taking a bus to Granada, Spain.  After Granada we visited Seville, Spain.  From Seville, we flew to Milan on a super cheap two hour Ryanair flight. After a two hour train ride from Milan, we arrived in Venice.  Then we took a four hour bus ride to Ljubljana where our story picks up today.

 

This river runs through the middle of the old historic center of town. You can take the riverside walk into town.

 

Or head into town along the cobblestone streets between these centuries old buildings.

 

Getting Around Town

After a 4.5 hour bus ride from Venice, we arrived at the main bus station which is adjacent to the main train station. Most of the local buses traversing Ljubljana connect at the main bus/train station, so it was easy to hop on the right bus to take us the 1.5 miles to our Airbnb.  Bus fares are collected electronically so a €2 Urbana transit card is required (for sale at kiosks around town and at the main bus station).  Rides are €1.20 each and five year olds ride free.  As it turns out, a taxi probably would have cost about the same as the bus fare times four plus the €2 Urbana card purchase.

We didn’t take the bus any more after that first bus trip because we booked a rental car for the remaining 10 days of our stay in Slovenia (4 days of which we stayed in the village of Podkoren in the northern part of Slovenia – more on that in the next article!).

A rental car isn’t a requirement to see all of Slovenia, but it’s a huge convenience. Otherwise we would have to rely on guided tours or somewhat infrequent intercity buses to the more far-flung destinations we visited.

If we only visited Ljubljana itself, a rental car wouldn’t be necessary at all as the buses are comprehensive and the taxis cheap.  Slovenia didn’t have Uber when we visited but they did have some kind of taxi app that I didn’t try.  The central tourist section of town is easily walkable if you’re staying in the center.  We stayed on the edge of downtown and could walk to everything within 5-20 minutes.  Some streets are pedestrian only, so we left the car in the driveway when venturing down the cobblestone streets of downtown Ljubljana.  There was a small grocery store and a playground two blocks from our Airbnb house.

 

This bridge over the Ljubljanica River was only a few minutes walking distance from our airbnb rental.

On the morning of our first full day in Ljubljana, Sixt dropped off the rental at our Airbnb at the scheduled time of 10:00 am without much delay.  We declined the extra car rental insurance because our credit card provided full coverage. Sixt required us to put a $4,000 hold on our credit card to cover any damage or losses to the car.  The rental car attendant told me it was 15% of the car value, which would make it a $26,000 car.  It was a brand new Audi compact car, so the small price tag surprised me.  The total rental price for 10 days was €151 or about USD$170.  We could have saved quite a bit by booking a manual transmission car, however I’m no good at the stick shift so I went the easy route of automatic transmission and paid a premium.

This was our first rental car in Europe and it turned out to be an okay experience but there were some bumps in the road (more on that in the next article on northern Slovenia).  It wasn’t a matter of extra unexpected charges or problems with the car, but rather miscommunications with Sixt staff.

This little Audi sipped the diesel very carefully even up and down winding mountain roads. It only cost about $20 to fill up the tank which we did a couple times while in Slovenia.

The stereotype of tiny compact cars in Europe was confirmed with our little Audi. It was a tight squeeze to fit our five bookbags (all we traveled with for nine weeks) in the hatchback trunk area, and adding a few bags of groceries on top really stretched the cargo limits to the max.  The kids complained of being “literally crushed to DEATH” in the back seat though none of our children were injured or died on this particular sojourn in Slovenia, whines and complaints notwithstanding.

Driving was easy once I figured out the European road signs. Everyone drives on the right hand side of the road (as all continental European countries do). The one weird difference I noticed was country-wide prohibition of “right turn on red” at traffic signals. I violated this particular law without thinking, then luckily bumped into a fellow American at the grocery store who informed me of this nuance of Slovenian road rules.

Navigating the countryside was simple with offline Google Maps and GPS on my phone.  We didn’t get lost on small backcountry roads nor on the winding narrow alleyways in ancient villages.  Though there were a few times when we questioned whether we were driving on a footpath or a real road. I think we messed up just once or twice.

The national language is Slovenian but almost everyone speaks English to some degree. The one notable exception was the cashiers at the grocery stores. Many were older ladies that graduated high school before the fall of the Iron Curtain, and as a result were less likely to learn English in school.  So if you ever need to find a proficient English speaker in Slovenia, just look for someone under 40.

Car free streets in downtown Ljubljana. Leave the car at home and take a stroll through the city.

 

Lodging for a week with Airbnb

We stayed in a centrally located house on the edge of the historic downtown area of Ljubljana for USD$86 per night.  There were cheaper Airbnb’s available, but we decided to live it up a bit in a three bedroom apartment that occupied the entire second floor of a large house. The house had two other apartments – one above and one below us. The owner lived in the first floor apartment and was always available if we had any questions or issues.  Since we had a car, the fenced in parking area was convenient though it was an extremely tight squeeze.

Large dining table for 6 and a big living room. Home away from home!

 

The bathroom with bathtub/shower, bidet, and washing machine.

 

The Airbnb offered plenty of space to relax in the large living room and dining room. The kitchen was larger than ours at home in Raleigh, and almost as well furnished.  The bathroom situation was a bit weird as it was advertised as two bathrooms though it was more like two half baths. The main bathroom was huge and came with a large bathtub/shower, bidet, vanity area and laundry area but no toilet. The second bathroom was possibly a former coat closet refurbished by squeezing in a toilet and small sink.  The apartment was perfect for our one week stay.

If you want to give Airbnb a shot, click here to take $40 off your stay.

 

Food in Ljubljana

We cooked several meals in Ljubljana and packed sandwiches and snacks for picnics around the countryside.  A Mercator grocery store two blocks from our apartment provided all the staples at very reasonable prices.  Once we got our rental car on day two, we made a big grocery run to the Hofer grocery store a mile away. Hofer is the trade name used in Austria and Slovenia by Aldi grocery stores.  Store layout and product offerings were surprisingly similar to the products on shelves in the US version of Aldi.  Prices and quality were great, too.

Restaurants and bars were incredibly cheap in Slovenia. Like Mexico cheap.  We found one of the nicer restaurants in town and stopped in for lunch. Druga Violina, or Second Violin, offers a rotating menu of two or three course meals for €4.50-5.00 (USD$5.00-5.60 at the time) that includes a salad, a main course, and sometimes a dessert.  We tried a couple of those meals. We also got several stews and desserts to try plus some fries for the kids (so they won’t “literally starve to death”).  The bill came to USD$29 and none of us left hungry.  The restaurant also does a good deed by hiring special needs young adults to bus tables and serve food. The special needs staff struggled with the details a little when bringing out our order, but you have to applaud a restaurant that makes a difference AND serves a good meal in a nice atmosphere for less than the cost of a fast food combo back in the US.

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

 

Mrs. Root of Good’s penne pasta, part of the €5 fixed price 3 course meal menu. Yeah it’s Italian food but that IS Slovenian food too since the Italian border was under an hour from Ljubljana.

 

In the center of downtown Ljubljana there’s an open air market with a couple dozen food vendors. Perfect for a family with varying tastes (including kids who count french fries among their favorite foods). Mrs. Root of Good indulged her desire for seafood with fried squid ($8). I ordered “one of everything” at a different food truck and ended up with cevapcicis with ajvar sauce, fried cheese, french fries, and stuffed Slovenian pizza.

The Slovenian pizza has a fairly normal yeasty doughy thick crust filled with cheese, meat, and sauce.  Cevapcicis are little beef sticks served on big, crusty on the outside, soft on the inside rolls (like huge English muffins but way better).  Ajvar (remember the j sounds like a y) is mashed up roasted peppers (and it’s also delicious!).

Fun story on grocery shopping while abroad.  We accidentally bought ajvar at the grocery store thinking it was Slovenian for “pasta sauce”.  Nope. But it does taste delicious on pasta when mixed with tomato sauce or “real” pasta sauce.  I also found that you can buy frozen cevapcici meat sticks at the grocery store and they are delicious. I guess it’s the US equivalent of frozen meatballs or hamburger patties.

Slovenian street food lunch for USD$20!

 

Downtown Ljubljana is a fun place to visit, and we did so on several days. There’s always a strange mix of public performances going on. Live bands giving impromptu concerts. Mimes or actors in costumes looking for tips.  Gymnasts and jugglers showing off their extraordinary coordination. One guy used the expanse of a large open square around a fountain to practice his bullwhip cracking skills.  And in a rare deviation from the typical European experience, the downtown area felt like it was designed to encourage visitors to linger with free drinking water fountains and free public restrooms (most places in Europe charged $0.50 to $1.50 to answer the call of nature).

On the stroll back to our Airbnb after an afternoon of exploring downtown, we stopped by the Cat Caffe Ljubljana to watch the cats inside.  Cats and coffee! How can you not love that combo?  I didn’t risk going in with the kids since one of the girls has a bad cat allergy.

 

Ljubljana Castle

We visited a castle in almost every city we visited in Europe. Ljubljana was no different.  The Ljubljana Castle is perched atop a hill that forms the western border for the downtown historic district. Given the high vantage point, I can clearly see why the original castle builders decided to put a defensive fortress up there 1,000 years ago (and why new rulers continually upgraded the castle throughout the centuries).  You can see half way across the country in every direction.  Invaders would have had a terrible uphill climb to get to the outer walls.  Fortunately we had a rental car to take us up the hill to the castle entrance.  Another alternative is the funicular that runs from the from downtown center up the hillside to the castle.

There is a small admission fee to see all the parts of the interior of the castle including a museum. We didn’t pay anything and managed to see the most interesting parts of the castle for free.  I’m not sure if we broke the rules by walking in for free but there was no one taking tickets at the main gate, and individual areas specifically asked for certain tickets available for purchase (which we didn’t buy).

The castle was very interesting and certainly worth a visit if you’re in Ljubljana, if for nothing more than the view of the surrounding country. I think we were starting to suffer from castle fatigue at this point in the trip since we had seen at least a half dozen impressive castles leading up to this one.

View of the castle from the main town plaza

 

Interior castle courtyard with special event setup

 

We crashed some kind of party and somehow managed to evade security. A screaming five year old running down the red carpet didn’t raise any alarms.

 

We told our five year old that they lock unruly children in this dungeon. Hyperactivity was NOT deterred.

This castle held prisoners of war during World War I, including US POW’s.  At the time, much of today’s Slovenia was controlled by the Austro-Hungarian Empire, an enemy of the US and Allied powers during WWI.  I’m kind of a history nerd, and WWI/II are of particular interest so this was way cool to see. Scattered elsewhere throughout Slovenia we saw plenty of places of significance during WWI including battle sites, memorials, and graveyards.

 

Castle aglow with the orange of sunset

 

Family time enjoying the sunset over Ljubljana.

 

View from the hill of Ljubljana Castle. We will visit the Julian Alps (those mountains in the far distance) in the next travel article installment.

 

Caves of Slovenia

Slovenia is a small country which makes it perfect for day trips out of the centrally located capital of Ljubljana.  We took day trips on two occasions to see the huge caves near Ljubljana. The Skocjan Cave is more rustic and raw and feels like you’re exploring it yourself instead of being led on a guided tour.  The Postojna Cave feels a little Disney-fied with the train that leads you into the most impressive part of the cave.  Our Airbnb host tried to deter us from even visiting the latter cave, however we ignored that advice and are very glad we toured both caves.

The two caves offered very different scenic opportunities. The Skocjan cave was massively impressive in size and scale.  Like incomprehensively massive – my brain couldn’t really process how big it was or the fact that a 50 story skyscraper could fit within some of the underground chambers.  And an underground river runs through the bottom of these massive chambers.  I’ve never seen anything else like this in the world.  The Postojna cave (the Disney-fied one) was impressive not due to its size, but because of the stalactite and stalagmite formations and mineral pools packed into the dozens of cave chambers we passed through.

Each cave tour cost just under USD$100 for family admission which is quite a steep price given how cheap everything else was in Slovenia. It’s well worth the cost of admission.  These two caves were probably the most impressive sights in the entirety of our Europe trip.  A must see if you’re in this part of Europe.  The Postojna cave was rather crowded, however the Skocjan cave wasn’t that packed with tourists in spite of us being there in July in the middle of peak tourist season.

The caves were both a short 30 to 45 minute drive and not too far off the main freeway connecting Ljubljana with Trieste, Italy.  Both caves are in the same general direction, so it’s certainly possible to see both cave complexes in one day. However I’d allow at least four hours, possibly six, to explore all of the accessible areas of the Skocjan cave which would have you rushing to see the Postojna cave. To see both main parts of the Skocjan cave, expect to walk or hike for 3-4 miles, some of which will be on uneven steps and steep, rough terrain. It’s not rock climbing but it’s a lot harder than a leisurely stroll.

If you’re not in top physical shape or traveling with children, definitely plan on doing one cave per day. Postojna Cave is much less physically demanding as you ride a train into and out of the cave, and are only walking on foot for about 40 minutes to one hour.

Near the Postojna Cave is the Predjama Castle. It’s neat to see a castle built into a cliffside but not worth a separate day trip if you aren’t planning on visiting the Postojna Cave at the same time.

Skocjan Cave

Skocjan Cave and its underground river

 

Near the entrance to the self-guided part of the cave tour.

 

One of the gravity-defying bridges traversing the chasms on the Skocjan cave walk.

Postojna Cave

We rode the train a couple of miles inside the earth to tour the Postojna cave.

 

Video from our train ride into the Postojna Cave

 

Layered stalagmites in the Postojna Cave.

 

Impressive columns and stalagmites in the Postojna Cave.

 

I wasn’t sure whether to include this pic under the “Castles” or the “Caves” heading. Predjama Castle built into a cave in the side of the hill (just a few minutes past Postojna Cave).

 

Thoughts on Ljubljana and Slovenia

We all loved Slovenia in case you can’t tell already. It’s a beautiful country in a beautiful part of the world.  Full of mountains, lakes, rivers, waterfalls, caves, castles, and history but without a big price tag usually attached to these luxuries.  In other words, it’s a perfect destination for this frugal travel blogger/early retiree.

Unlike many other tourist destinations in Europe, Slovenia isn’t swamped with tourists. Even in the capital city Ljubljana it seemed to be a largely local crowd with some tourists from nearby Italy and Austria (which are both within an hour’s drive from Ljubljana).  Slovenia is relatively undiscovered today however I’m afraid articles like the one you’re currently reading will bring waves of tourists that will jam pack the streets and take up all the seating at the quaint sidewalk cafes.  I’m conflicted as I want to jealously guard this secret gem from everyone and keep it for myself.  However, I feel compelled to share it’s beauty with all of you so that you can enjoy it before future crowds wreck its splendor.

Who needs Venice when you have Ljubljana’s canal-like river running through town?

Of all the fourteen cities and eight countries we visited in Europe last summer, Slovenia stands out as a favorite for the whole family. It has a slower pace of life that we could embrace.  Everything works. It’s clean and convenient. The people are friendly.  It’s a bit like many other cities and countries we visited in Europe except without the crowds, commercialism, and higher prices usually associated with tourist destinations.

We have Ljubljana and Slovenia on our list to re-visit for a longer period of time whenever we make it back to Europe.  I wouldn’t mind spending a whole summer there in fact.

 

 

Admit it, this is the first time you’ve ever heard of Slovenia and Ljubljana, right? 🙂 What do you think? Should the Slovene Tourist Bureau hire me?  

 

 

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

 

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January 2018 Financial Update

Wow, January flew by! I can’t believe it’s already February.  Here in North Carolina it was a rather frigid January.  We experienced not one, but TWO (!!) snowstorms during the month which is a rare occurrence.  If you’ve never experienced snow in the South, it’s a treat. Everything shuts down and the kids get a few days off school.  We busted out the sleds, bundled up, and made the most of it.  Ironically we ended up at our neighborhood elementary school where we hit the slopes hard.

January was a fun month for our finances, too.  The market continued its upward trajectory throughout the month and left us much wealthier.  Our net worth climbed $77,000 to $2,114,000.  Income remained strong at $4,055 which more than covered our spending of $1,281 for the month.

Income

Investment income totaled $345 for the month of January which came from our money market account, CDs, and bond funds.  Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December which leaves us with much lower investment income in the other months.

Blog income, shown as “other income” in the chart, remained roughly the same as last month, at $2,377 for the month of January.

My early retirement lifestyle consulting income (“consulting”) dipped slightly to $728 in January compared to $843 in December.  That works out to almost two hours of consulting per week which is what I’m targeting.

 

Don’t want to “work” too much or I can’t do this kind of thing when the opportunity presents itself.

Deposit income of $604 was mostly cash back from a credit card sign up bonus from the Capital One Spark Business card.  I completed the bonus offer in November and the cash back check finally showed up in January.  If you aren’t already enjoying the free money and free travel from credit card bonuses, click here to check out the latest bonus offers.

Another small portion of the deposit income 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.  We scored a decent amount of cash back while shopping online over Black Friday and leading up to Christmas and that cash back is getting paid out right now.

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 January expenses:

Our spending totaled $1,281 during January which is a little less than half our budget of $3,333 per month (or $40,000 per year).

 

Groceries – $563:

A fairly ordinary month of grocery spending right at our long term monthly grocery average.  Lately we have shopped at the new Lidl grocery store that opened up in Raleigh in November. Their regular prices are about the same as Aldi, and they offer weekly sales on their already competitively priced products.  We still visit Aldi but find ourselves spending less there for some reason.

 

Yeah we eat rice and beans. With a side of Tikka Masala and Butter Chicken Curry. Try this curry paste if you want to make delicious homemade butter chicken curry too.

 

And thai coconut shrimp curry.

 

I usually buy jars of Maesri pad thai sauce. This time I made the sauce from scratch using tamarind concentrate. Tastes amazing and costs less (about $3.50 for a 16 ounce jar at our local Asian grocery).

 

Steak fajita time!

 

Healthcare/Dental – $364:

We spent $364 for our monthly health insurance premium.  That’s the premium after we get a $700 per month ACA premium subsidy based on our income.

 

We spent two days this winter cleaning up the bank along the lake. Technically we’re trespassing on city property but they’ve pretty much abandoned it so we clear cut the trees and weeds each winter to maintain our lake view.  In the process, we get tons of free firewood.

 

Taxes – $300:

State of North Carolina estimated quarterly taxes for Q4 2017.  We paid for the federal quarterly estimated taxes using Visa gift cards purchased (at a discount) in December so that expense doesn’t show up in this January financial report.

The state taxes came with a 2% fee (totaling $6) that I’m allocating to the “Travel” category of spending.  We pay the extra fee to generate spending on credit cards so we can qualify for more sign up bonuses each year.  That’s how we get $5,000 to $10,000 in (mostly) free travel or cash back each year.

 

Restaurants – $32:

$32 for Chinese takeout for our family and my parents.

Sushi takeout from the Chinese restaurant. Good stuff!

 

Cable/Satellite – $14:

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

 

Travel – $6:

$6 fee for paying State taxes with a credit card.  Credit card bonus here we come!  Travel plans for 2018 include a month in an oceanfront condo in The Bahamas this summer and a week long cruise in the Caribbean on the brand new MSC Seaside over the Christmas holidays.  The Bahamas trip is all booked and paid for other than a rental car, whereas I still owe about $1,000 on the cruise (due by October).

 

We “traveled” a few miles up a greenway trail to stumble on this beauty. Lassiter Mill dam in Raleigh.

 

Gas – $0:

We didn’t buy any gas in January. The last time we refueled the van was December 10.  It’s looking like we’ll make it almost two months between fill ups!  The snowy conditions in January certainly helped conserve gas since it’s no fun to drive around on slippery roads and many places close for inclement weather anyway.  And who has time to go driving around when you can walk to some fun sledding places for free?!

 

Weeeee! Getting mad slope time at the elementary school.

 

I like snow in North Carolina. It’s beautiful for a couple of days then it all melts and goes away and it’s 70 degrees within a few days.

 

But before it warmed up, it was REALLY cold. Like below freezing cold. For more than a week straight, which was a new record in Raleigh. I’ve never seen our lake freeze this solid.

 

Summary of annual spending from all years of early retirement:

 

Net Worth: $2,114,000 (+$77,000)

Another crazy month in the stock market. It seems like the market only goes up. Until it doesn’t (like last Friday’s 2%+ drop).

During 2017 we moved to a slightly more conservative asset allocation that now includes about $125,000 of bonds and $50,000 of money market and CDs.  The remaining 90% of our assets are fully invested in the stock market which means we do really well when when the market goes up but we suffer quite a beating when the market drops.

This aggressive asset allocation was responsible for a half million dollars worth of investment returns since October 2016. I’ll take it. I might also give it back in the next stock market correction.

View from our bedroom window. Guess how glad I am that I don’t have to get up and go to work in this mess?

Financial goals in 2018 are to have fun, spend on what we want, and enjoy our wealth.  I might sell another chunk of equities if the market continues it’s upward trajectory.  If I sell more equities, it’ll be a speculative play (instead of a defensive play like my sales in 2017) where I’m building up a source of “dry powder” to deploy in the event of a steep market correction.  We’re sitting on around five years of living expenses in cash/bonds/CDs right now and that should cover us through any kind of recession smaller than the Great Depression.

And that’s how our January went! I’m glad that February is here since that means nicer spring weather isn’t far off. In other news, Mrs. Root of Good celebrates two years of early retirement today!  It’s hard to believe we have both been doing this whole not working thing for so long.

 

 

Are you making progress on your 2018 goals?  Still striving to make good on your 2018 New Year’s Resolutions?  

 

 

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Is Hygge, or “Social Coziness”, Denmark’s Best Export?

Visiting us this week is Bob Lai, the blogger behind Canadian Financial Independence and Early Retirement blog “Tawcan” with an important message on living the good life with a Danish influence.

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Unless you have been living under a rock the last few years, you probably have come across the word “hygge.” Hygge is a concept that comes from Denmark. Directly translated, it means cozy. For some reason, hygge has been the hottest craze lately. Everywhere you look you can find hygge related items, being it a flood of books, countless top 10 lists or how-to website articles, department store displays, and even Japanese bakeries.

What exactly is hygge? Does it simply mean cozy? Or purchases of things to create a cozy environment?

I will explain to you what hygge is to me and my family.

Before I get into what hygge truly means, you are probably wondering, how would a Taiwanese Canadian know anything about a Danish concept? What qualifies me to write about hygge?

Well, I met a Danish girl back in 2009 and fell deeply in love with her. One of the first things that she taught me was hygge and what it means to have a “hyggelig” time. I asked her to marry me, at her 30th birthday party, in front of our close friends. Nobody had any idea that I was going to propose to her. Fortunately, she said yes. After we got married, she told me that one of the key reasons for her saying yes was because of my excellent hygge skills.

 

How do you pronounce hygge?

Before getting into what hygge is exactly, let’s go over the pronunciation because almost every non-Danish person I know is messing up the pronunciation.

One thing I have learned as a non-Danish person trying to pronounce the word hygge is that it is a hard word to pronounce. For example, my wife (I’ll refer to her as Mrs. T from now on) has taught my parents numerous times how to pronounce the word, but they still butcher the word by pronouncing it like “hoog.” I think my pronunciation is quite decent but probably still not quite like a true Dane yet.

Contrary to belief, hygge is not pronounced like hoog, hoo-ah, hoo-gah, or hig. Unfortunately, it is nearly impossible to write it out phonetically in English because there are no characters to reflect the actual “hy” sound. The closest phonetic pronunciation is probably a mix between “hue-gah” and “huh-gah.” Since it is so hard explained in words, it is best to listen to the audio pronunciation here.

 

What is hygge?

Hygge to Danes means a lot more than just cozy or coziness. It is about quality time, whether alone or with friends, at home or out. It usually involves some sort of food, candles, some sort of activities like playing games, doing creative stuff, or working on a project together. Hygge can also be as simple as wrapping yourself in a big warm fuzzy blanket, having a cup of hot chocolate, while sitting in front of the fireplace, and enjoying the moment.

 

 

As an honorary Dane, hygge to me is about slowing down and spending quality time with the important people in my life. It is about having good food and having a good time; it is about having a deep conversation with someone while enjoying a nice cup of tea/coffee, it is about taking time to enjoy the simple pleasures in life. To qualify something as “hyggligt,” it requires slowing down, being completely present in the moment, and enjoying it fully.

Therefore, hygge is not about buying cashmere blankets, candles, wine, furniture, pastries, yoga pants, or other material things.

Hygge cannot be purchased.  It has a much deeper meaning, a higher purpose.

 

Danish hygge life vs. North American life

Having lived with a Dane for the past 7 years and stayed in Denmark multiple times over a month each time, I have noticed some major differences between how Danes incorporate hygge into their daily lives and the drastic contrast with how we North Americans operate our daily lives.

For example, Danes can sit for hours over a meal. Whenever we celebrate Christmas with Mrs. T’s family, Christmas meal typically starts around 5 or 6 PM and we usually won’t finish the meal until 10 PM. It does not mean we eat food nonstop for 4 or 5 hours. It has more to do with having different food items slowly and having different conversations along the way.

Mrs. T’s family has a tradition of inviting relatives over for Christmas lunch on the 26th of December (Danes celebrate Christmas on the evening of Dec. 24th). The Christmas lunches I have attended, we would start around noon, often going past 7 or 8 PM. Essentially lunch and dinner would merge into one giant meal. To my wife’s family, these long meals are hyggelige. We sit down together, talk, eat some seafood dishes, talk some more, eat hot dishes, talk some more, eat cheese platters and fruit salad, get up for a walk around the neighbourhood, come back to the living room to have some coffee, more talks, have some desserts, more talks, have some more coffee, etc… well you get the drift.

 

 

And it is not just special holiday meals that the Danes would sit down for, for hours. Everyday meals are much slower and last longer compared to what I have been used to here in North America. The Danes aren’t in a hurry to finish up their meals so they can move on to the next task. They consciously slow down to enjoy the moment and each other’s company.

This concept of slowing down to enjoy the moment is still a learning-progress for me. When we eat meals at home, I would often try to finish my food quickly and start cleaning, so we can move to the next activity or task on hand. When my phone rings or beeps, I would have the strong urge to step away from the table and check my phone. “Sit down and wait till everyone’s finished! We are having hygge!” Mrs. T would often remind me. I am better now today, but I am still learning. 😊

Thanks to Mrs. T, I have been learning how to incorporate hygge as part of my everyday life and to spend quality time. I have learned to take the time to consciously slow down so I can enjoy things that I truly enjoy. This can be playing a video game, watching a hilarious movie, taking the time to meditate, reading a book, playing silly games with my kids, or laughing hysterically over something completely silly and stupid.

 

Why is hygge so popular nowadays?

The popularity of hygge probably has something to do with us living in a fast-pace-technology-driven-everyone-is-always-busy world. Everywhere we look, people are stressed about their jobs, stressed about their lives, stressed about money, stressed about putting a roof over their head, stressed about having the latest and greatest gadget, stressed about keeping up with the Joneses, stressed about saving up for retirement, etc. Somehow, we are looking for a way to detach ourselves from the daily grind and do something special for ourselves.

However, it is not just hygge that we need to incorporate into our daily lives. As someone who is involved with the Financial Independence Retire Early (FIRE) movement, I believe we need to incorporate hygge into our FIRE plans.

Why?

Because I believe incorporating hygge in our FIRE plans will make our lives more fulfilling.

The FIRE community has a tendency to focus on the FIRE date and the FIRE number. We are in a rush to get to FIRE so we can finally enjoy our lives. Some people in the FIRE community aren’t happy with their jobs, their fitness level, or their lives, and they believe that reaching FIRE will make them finally be happy. In addition, the term “FU Money” also has a bad vibe and can rub people the wrong way.

Rather than looking at FIRE as the end goal and having such a strong desire to not ever have to work ever again, let’s focus on what makes us happy and content right now. Enjoy the journey by having hygge along the way.

 

Incorporating hygge into our FIRE plan

You may wonder, how do I consciously incorporate hygge into our FIRE plan and everyday life?

 

  1. Turn off wifi and data on my cell phone

Mrs. T has been telling me that I check my phone way too much. Lately, I have become conscious how often I do that when I am at home. As part of my hygge practice, I started turning wifi and data off on my cell phone back in December when I am at home. This has allowed me to be more present with the kids and Mrs. T.

 

  1. Spending special time with my kids

Every day, I spend a minimum of two times 10 minutes each of special time with each kid. Each kid would decide what he or she would like to do with the 10 minutes. During the 10 minutes, I am completely present and play along. Some special time activities include playing Lego, playing Duplo, drawing pictures, reading books, pretending to be a horse while having the kid riding on my back, and building a mattress fort.

 

We build toilet paper forts here at Root of Good.

 

  1. Sitting down with Mrs. T every night to have hygge

Every night after the kids are in bed, Mrs. T and I would find time to have hygge. It can be sitting down and talking about our day or our future, having a nice cup of chai latte, hot chocolate or tea, watching a movie, or reading books. Having hygge with Mrs. T without the kids has helped us improve our relationship.

 

  1. Making meals or baking treats together

We aim to get everyone involved as much as possible when we make a meal or bake treats. Our kids are 4 and 1.5 and they have been helping with making cookie dough, cake mixes, and putting toppings on pizzas.

 

  1. Not having a fixed FIRE date

Unlike some FIRE bloggers, we don’t have a fixed FIRE date. Instead, we practice being financially independent, despite not FIRE yet. We don’t have a specific FIRE date because we understand things will change. We have two young kids and we also plan to live abroad in the future. We know we will reach FIRE eventually. Not having a fixed FIRE date has allowed us to be flexible with our FIRE plan while focusing on enjoying the special day-to-day moments.

 

  1. Say yes to pleasurable expenses

Being a saver at heart, it has taken me a very long time to learn that it is OK to have pleasurable expenses like having a nice cup of coffee while sharing delicious hand-crafted chocolates with Mrs. T. or going to a nice restaurant and ordering whatever I want without looking at the price. It is about slowing down and enjoying the moment with the special people in my life. FIRE often has a bad vibe because many people focus on extreme frugality and reaching FIRE as quickly as possible. FIRE is not a sprint, it is a marathon. It is totally OK to spend money occasionally.

These are just a small number of things that we have been doing. I believe they have allowed me to focus on the present moment, instead of rushing to the FIRE finish line for the sake of being FIRE’d.

 

 

Gotta go…gotta have hygge!

Incorporating hygge into my daily life and our FIRE plan has allowed me to find my personal balance between spending for today and saving for the future. What is the right balance for me, however, may not be the right balance for you. It is up to each of us to determine our own personal balance between spending and saving.

We all need to realize that we are extremely fortunate contemplating about FIRE, as there are many less fortunate people in this world that do not have a roof over their head and cannot even have a proper meal to satisfy their hunger.

Treat FIRE as part of life, slow down, have more hygge, and enjoy the present moment.

 

About the author

Bob Lai from Vancouver, Canada blogs at Tawcan.com. A millennial, frugalist, investor, photographer, author, and outdoor enthusiast, Bob started his financial independence journey in 2011 after a financial epiphany. Since then he has amassed a dividend portfolio paying over $1,100 per month and is practicing being financially independent every weekend.

Tawcan the blog was created to chronicle his quest for joyful life and financial independence from a Canadian perspective. Self-taught about personal finance and DIY investing without any formal training, his focuses include stock investing, passive income, millennial money, frugal living, self-improvements, and life philosophy.

 

Root of Good’s thoughts:

Love the message, Bob.  I’ve been enjoying hygge all along without knowing what it was called!

Family time at Thanksgiving. Many hours of eating, chatting, and relaxing with family.

Campfires must be hyggelig too, right?

 

 

Could you get into the concept of hygge in your own life? Are you already embracing hygge without knowing it?

 

 

The Meandering Canals and Bridges of Venice, Italy

Stop number six on our nine week summer vacation across Europe brings us to Venice, Italy!  After a two hour train ride from Milan, we arrived in Venice’s main train station around noon.  Quick trip recap leading up to Venice: we flew to Milan from Seville, Spain on a super cheap two hour Ryanair flight.  Earlier in our trip, we visited Lisbon, Portugal, then flew to Malaga in southern Spain before taking a bus to Granada, Spain.

Venice is one of those cities that everyone has heard about. Mostly good stuff. Some not so great stuff. It routinely appears in articles like “Top 5 European Destinations Everyone Must Visit”, so it’s a must see if you find yourself in Europe with time to spare, right? I’ve also seen Venice on several “Most Overrated Destinations in the World” lists.  How does one reconcile these two starkly contrasting ideas? Could Venice appropriately fit on both kinds of lists? I wanted to judge for myself so I made sure to book a couple nights in Venice so I could experience all the good and the bad that this canal-filled enclave has to offer.

Two nights seemed like a good bet.  I figured if I love Venice, I can always visit for a longer period on subsequent trips to Europe. If I hate it, I’ll be moving on to the next city in under 48 hours so the downside is limited.

You’ll have to read on to get a full report of my feelings on the city, but in summary I have concluded Venice fits best on the “must see” list due to the unique presence of canals and architecture that we didn’t see elsewhere in Europe.

 

The Grand Canal runs right down the middle of Venice.  It’s like a road paved with water.

 

Lots of canals, lots of bridges

 

Getting Around Town

Venice has to be one of the most pedestrian friendly cities in the world. There are no cars in the city because there are no roads! While there are tons of canals, the boat traffic on the water is physically separated from the pedestrian thoroughfares.

As a result, getting around town is a simple affair if you have two feet and the ability to walk a mile or two at a time.  From the train station, the Piazza San Marco and surrounding tourist attractions are only about a 30 minute walk (that will take you an hour or two because of all the cool buildings and canals you’ll have to admire along the way!).  Another 30 minutes and you’ll be at the far opposite side of Venice.

One of the many canals only accessible by boat.

Given the winding ways of the sometimes-dead end streets and the narrowness of some alleyways, you’ll get lost along the way. Which is half the fun of exploring Venice.  And you’ll undoubtedly struggle to find a way to cross the canals that frequently appear in your path.  Google Maps Walk Mode with GPS enabled is your friend in Venice.  And gelato. If you get tired, stop for some gelato and life gets better.

We chose to walk everywhere since we had a decently located Airbnb not too far from the main attractions of the Grand Canal, Rialto Bridge, and Piazza San Marco.  Dining was a breeze since there was a good takeout pizza place exactly 34 seconds walking distance from our Airbnb (I decided to time the walk after making several trips to this particular restaurant and thinking how short it was).  Kids love pizza; dad is therefore awesome.

Piazza San Marco. The largest open space in all of Venice.

 

The Rialto Bridge connecting the two main islands of Venice.

 

For those not up for walking, there are a few other ways to get around.  The water taxis will take you wherever you want to go but they are super expensive compared to land based taxis.  For a short trip you’ll pay USD$30-40 and there are upcharges for extra passengers, luggage, and waiting.  Slightly cheaper than water taxis but still expensive are the vaporettos, or water buses.  A single fare is USD$9 while a day pass with unlimited rides is slightly more affordable at USD$24.  If you’re staying for extended periods, multi-day passes work out to be almost reasonably priced on a per day or per trip basis.

Gondolas are another option to tour around the city but aren’t explicitly designed to transport you from point A to point B.  Fares vary but expect to pay USD$80-100+ for your group for 30-45 minutes.  This was a tempting use of $100 until Mrs. Root of Good reminded me about her and the kids’ severe motion sickness.  Boats and calm stomachs do not play well together in our family (and motion sickness meds lead to drowsiness).

Gondolas waiting to give you a tour on the Grand Canal.

 

The Bridge of Sighs. A popular spot for gondola-based sightseeing

 

Lodging for two nights with Airbnb

Lodging in Venice isn’t cheap.  Hotels for two or three people were $125-200+ per night and we would need two rooms for the five of us.  And those aren’t the really nice hotels nor are they conveniently located.

We managed to find a small one bedroom apartment with good reviews for USD$166 per night through Airbnb.  The living room came with a sleeper sofa (where we slept) while the bedroom offered a large king size bed for the kids. The bathroom was nice and spacious.  I don’t know if it was the fault of the owners, but we noticed a lingering sewage smell during our time in the apartment. It could be the city’s public works or it could be the apartment’s plumbing issues.

Bridge across the canal right next to our apartment.

Although the apartment came with a full kitchen, we didn’t cook while there. Instead, we relied on easy to prepare foods from the nearby grocery store (yogurt, fruit, pastries, cheeses, meats, and bread) plus ample takeout from the nearby restaurants.

Overall the apartment was a decent place to stay for a couple of nights, and proved to be a good value versus hotels (but very expensive when measured against the other places we rented in Europe).  If you want to give Airbnb a shot, click here to take $40 off your stay through this link.

Just another alleyway on the short path from the train station to our Airbnb. With my bookbag on, I had a hard time turning around in this passageway.

For budget travelers, one alternative to staying on the island of Venice itself is staying on the mainland. Hotels and restaurants are much cheaper just across the bay on the mainland’s “Mestre” district.  Trains run every few minutes from the mainland Venice Mestre train station to the Santa Lucia train station on the island and it’s only a 10 minute ride that costs less than USD$2.  You can wake up in a nice modern (inexpensive) hotel on the mainland, eat breakfast at a reasonably priced restaurant, then hop on a train to the island for a day of sightseeing.  Walk everywhere (or catch a water bus), see everything, relax, eat some gelato, and take the train back in the evening for a relaxing (and cheap) meal on the mainland away from crowds of tourists.  Rinse and repeat if you want multiple days touring the canals of Venice.  We opted to stay on the island itself for the experience, and I’m glad we did. But if you have a limited budget for a few nights in Venice you can really stretch your dollars by staying just across the bay on the mainland (where everything is half price).

It would be easy enough to stay on the mainland and come down to the waterfront in Venice on a day trip.

 

Grand Canal

Food in Venice

Though we stayed about 10 minutes away from the touristy parts of Venice, we were still within a few minutes of dozens of restaurants, bakeries and a small grocery store.  What can I say? It’s a small island so everything is necessarily nearby.

The neighborhood Co-op grocery store was our go-to place for fresh fruits and yogurts for breakfast and a container of gelato for dessert back at the apartment.  Prices were noticeably higher than everywhere else we visited in Europe but not out of line with the higher end grocery stores in the US.

The pizza place around the corner from our apartment was so inexpensive, convenient, and tasty that it quickly became our staple meal. I wouldn’t encourage eating pizza for most meals in general, but if you’re only in Venice for two nights and you love pizza, it’s a treat.  Just pretend you’re back in college.

Pizza from the corner pizzeria near our Airbnb. USD$12 for a mega-sized 18″ one topping pizza made from scratch (a few bucks less for the cheese-only version). More than enough cheese, pepperoni, and crust to stuff the five of us for under $25.

 

Mrs. Root of Good noted that we were near the water and therefore the seafood might be better than average in Venice.  She was busy resting her feet (we walked everywhere, remember?). Out I went in search of a restaurant that would sell me a few take out trays of some marine-based life form fried, sauteed, and/or steamed to perfection. This is harder than it sounds as apparently “take out meals” aren’t a thing at the fancy little cafes and restaurants lining Venice’s canals.  They have culinary standards and it would be insulting to stick their art-like dishes in a cardboard tray, or something.  To further complicate matters, it was only 5 pm and many restaurants close during the slow stretch between lunch and dinner with dinner starting at 6 pm or later.  Eventually I found a place that would stoop to my low cultural standards and slide their finest crustaceans into a to go tray in exchange for a few medium-sized euro notes (or a nice shiny credit card that offers reward points, in my case).

At USD$25 for the two plates, I think it’s still cost-competitive with US pricing for seafood and pasta though the portions were small by US standards. It was good but the pizza was better!

 

Gelato!! A trip to Venice wouldn’t be complete without a stop at a gelateria. We tried a half dozen flavors and thought some of them were outstanding. A large 3-4 scoop cone or cup was USD$3-4.

 

Nice quiet afternoon stroll along the Grand Canal.

Thoughts on Venice

First off, the negatives. Venice suffers from its own success.  It’s beautiful and everyone wants to visit which means you get to enjoy the company of tens of thousands of people, many of whom are just visiting for the day from one of the mega-sized cruise ships docked in the busy port.  The impact of the crowds is highly variable. On our first evening in Venice the crowds weren’t bad at all because everyone leaves in the evenings. It was almost quiet in places.  Even in the middle of the day, it was relatively quiet near our Airbnb since we weren’t in the middle of the main touristic areas and several minutes away from the Grand Canal that transects Venice.  But the most often visited sections of Venice were swamped with hordes of humanity walking penguin-style in the narrow canyons between the elegantly decaying buildings.

The Rialto Bridge area and the Piazza San Marco were the most cramped areas during the middle of the day.  We visited those places then moved on to quieter spots.  Some visitors chose to dine right next to the Rialto Bridge at one of the many sidewalk cafes. I don’t know how they enjoyed their meal given the urgency of thousands of people pushing their way along the sidewalk right next to them while the mild sewage stink of the canal danced a duet with the lingering clouds of cigarette smoke from the crowds passing nearby.

Looking down from the top of the Rialto Bridge. Both sides of the bridge are lined with shops.

The city is also slowly sinking into the bay (or is the sea level rising??) which makes the decay more evident. The ground level in many buildings is no longer habitable by humans (only by the canal water).  We didn’t notice any flooding when we visited but I understand it’s a big problem when high tide coincides with other environmental conditions.

What I’m saying is that I found the architecture and canals of Venice worthy of visiting in spite of the crowds of my fellow tourists making the experience less enjoyable for us all.  There’s nowhere else quite like Venice in all of Europe. Even the canals of Amsterdam (where we also visited) don’t compare to the sight of the tight-packed houses and shops lining the canals in Venice.

I’m 100% glad that we decided to spend a couple of days in Venice. It was one of those cities we considered cutting from our 14 city tour across Europe since it often made the “overrated tourist trap” lists.  I still think it’s a tourist trap in a way, but with merit. It’s amazing. Around every mundane corner is a picturesque winding alleyway with a narrow bridge crossing a murky canal. It’s definitely worth a 2-3 day visit if you find yourself in this part of the world.

Will I be going back some day? Yes. Hopefully in the off season when it’s less crowded.

How can you not love this place?

 

 

What is your preconception of Venice? If you visited, how did you like it? 

 

 

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

 

December 2017 Financial Update

Happy New Year!  Another great year in the books for us.  Our youngest started kindergarten. We took an amazing nine week trip to Europe.  And with all the kids in school we were finally able to take advantage of a nice last minute travel deal when Mrs. Root of Good and I jumped on a cruise to the Caribbean for a week.  Our early retirement lifestyle is going well.

Here’s how our finances finished 2017.  Year end dividends rolled into the investment accounts in December pushing our total income to just over $14,000. Our spending was rather high at almost $8,000 (which needs some explaining). Another freakishly good month in the stock market pushed our net worth up another $26,000 to leave us with $2,037,000 at year end. Needless to say, our 2017 went remarkably well from a financial perspective.

 

Income

Investment income totaled $10,843 for the month of December plus a bit more from a 401k that didn’t show up in Personal Capital.  Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  Some funds only pay once per year in December which explains why the December investment income is much higher than other months of the year. Mrs. Root of Good’s 401k doesn’t report the dividend income as dividends in Personal Capital. Including those unreported dividends plus all other investment income reported in Personal Capital, we earned a total of $36,234 in investment income during 2017.  That’s a little higher than 2016 dividend income.

Blog income, shown as “other income” in the chart, remained roughly the same as last month, at $2,294 for December.

My early retirement lifestyle consulting income (“consulting”) increased to $843 in December.  That works out to almost two hours of consulting per week which is the upper limit of what I’d like to do.  We’ll see how January goes before I finalize rate increases for 2018.

Deposit income of $51 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.  We scored a decent amount of cash back while shopping online over Black Friday and leading up to Christmas.

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 December expenses:

December was a high expense month for us. Two main factors added up to much higher than usual spending. I paid the annual property tax bill of roughly $1,500. I also bought around $3,700 in gift cards that I’ll be using throughout 2018 for everyday spending.

The December total spending of $7,953 is about two and a half times our budget of $3,333 per month (or $40,000 per year).  Subtracting out the $3,700 in unused gift cards brings our effective spending to “only” $900 over budget.

 

Groceries – $2,643:

This shockingly high grocery spending is easily explained. We bought $1,000 worth of Visa Gift Cards and $700 worth of Walmart Gift Cards to take advantage of some significant cash back opportunities and to meet minimum spending requirements on a credit card (to qualify for a sweet $1,000 cash back bonus!). We’ll spend these gift cards on things like groceries, household goods, and general merchandise over the next several months. I bought another $2,000 worth of Visa Gift Cards (that cost $1,963 out of pocket) and included those in the “General Merchandise” expense category.

Tracking spending with Personal Capital is easy since the data feeds in automatically from credit cards, checking accounts, and investment accounts.  With simplicity comes limitations. I don’t think there’s a way to add in expenditures manually after the fact as it’s basically a cash basis accounting system.  As a result I have to guesstimate where I’ll end up spending these thousands of dollars of gift cards in the future. Which is okay since I’m more concerned about tracking the total amount we spend instead of getting it allocated exactly between specific categories (= keep it simple).

Other grocery spending included a total of $363 added to our three kids’ school lunch accounts.

The actual grocery store grocery purchases for December totaled only $574 which is roughly what we spend on average in most months. More on how we shop for groceries without using coupons.  And why we never shop at Costco.

Rice and beans. And ribs. Hard to make fun of our frugal ways when there are tender juicy ribs next to the (imported from Thailand) rice and (freshly sauteed) beans.

 

Cooking runs in the family. We hosted potluck Christmas for almost 30 people in our family. We made lasagna and thai noodle cucumber salad, while guests brought egg rolls, spring rolls, salad, shrimp cocktails, broccoli casserole, and other delicious treats.

 

The monthly obligatory pho-to. This time at Mrs. Root of Good’s family’s house celebrating New Year’s Eve.  You can tell this is Mrs. Root of Good’s bowl because of the tripe on the left hand side (something noticeably absent from my own pho bowl 🙂 ).

 

General Merchandise – $1,963:

The $1,963 in this category represents the purchase of $2,000 Visa Gift Cards bought at a slight discount. I purchased these and other gift cards through the Ebates Cash Back portal and I hope to get $45 in cash back or possibly more depending on how they are categorized by the merchant.

 

Home Maintenance – $1,536:

Our annual property tax bill.  Even though our house is worth $200,000 or more, we are paying tax as if our house is worth $147,000.  They only reassess property values every eight years here, and the last re-evaluation came just before our neighborhood property values started skyrocketing as the wave of gentrification pushed east from the “nice” part of town.

 

Travel – $828:

It’s official.  Our 2018 summer vacation is booked!  We’re spending a month in an oceanfront condo in Freeport, Bahamas.  We’re staying in a ground floor unit of a 20 unit condo building that sits on a half mile stretch of undeveloped beach. Lots of bleached white sand, crystal clear water, and not much else.  If you don’t hear from us very much over the summer, just know that we’re relaxing working hard next to the pool or on the deserted beach.

We paid about $2,300 for the one month airbnb rental which includes a 50% “long term” discount.  It’s a 2 bedroom, 2 bath unit with a decent living room and dining room, washer, dryer, A/C, internet, full well equipped kitchen, and pool.  The cost breaks down to $828 out of pocket for Airbnb plus a big chunk of gift cards that I bought in 2016 (at a discount, of course) but didn’t use for our Summer 2017 trip to Europe.  If you want to take $40 off your first Airbnb stay, check it out!

The flights are booked except one flight for me on one leg because I’m being cheap and hoping it drops slightly in price.  I used a combo of Southwest frequent flyer points to for round trip tickets from Raleigh-Durham to Ft. Lauderdale then I used Chase Ultimate Rewards points (from last year’s Chase Sapphire Reserve signup) to get round trip Ft. Lauderdale to Freeport, Bahamas tickets.  Total cost out of pocket would have been around $500 per ticket but we managed to use points or other travel hacking to cover all costs in full (including the $56 tax at Southwest which the $300 Sapphire Reserve annual travel reimbursement covered).

I also used up $544 of remaining Sapphire Reserve travel credit to add to the deposit on our winter 2018 Christmas cruise on the brand new MSC Seaside cruise ship sailing out of Miami. Which means we’ll probably visit the Bahamas a second time in 2018.

Gotta love getting many thousands of dollars in free travel from credit card bonuses!  If you want to peruse the available credit card bonuses, check out my credit cards page.

 

Gifts – $357:

Most of this expense is cash gifts to our kids for Christmas. It’s one of their main sources of spending money throughout the year and preempts all those nagging “can I get this?” questions. It’s their money, they can do what they want (as long as it’s not dangerous or likely to lead to big problems).

We also bought the five year old a new bike for Christmas ($53). And phone cases for our daughters’ new phones ($3).

 

Christmas morning!

 

Little Dude’s sweet new 18″ bike from “Santa” (who doesn’t exist according to Little Dude). No training wheels on here!

 

Getting the hang of it.

 

Healthcare/Dental – $348:

Our 2018 ACA plan is about $60 per month more expensive than our $16 per month plan from 2017.  It offers nearly identical coverage as in 2017 except the deductible increased from $100 to $125 and the specialist office visits are slightly more expensive.  I decided to take less than the full ACA premium subsidy that we qualify for so that I can pay extra each month.

I figured out that I can in essence pay an extra $300 each month for my health insurance and that replaces the need to pay quarterly estimated taxes. In this case the health insurance company eats the credit card processing fees for the $300 per month instead of me paying the 1.87% fee. It’ll only save me $60 each year but it also eliminates the administrative overhead of making four estimated tax payments.  I feel kind of like a genius (a very stable genius).  In future months we’ll owe $364 per month for health insurance premiums ($64 for the actual policy plus $300 per month extra that will count as taxes paid once we get back a large ACA Premium Tax Credit at tax time).

 

Getting our tennis on during an unseasonably warm December afternoon.

 

Entertainment – $71:

Due to a quirky decision I made 8 years ago when I first started keeping detailed spending records, I include hard liquor purchases made at our state run liquor stores (the misleadingly named ABC Stores) in the “Entertainment” line item.  Good for entertaining and making a strong beverage at home for personal consumption I suppose.

 

Bought in November: a few bucks worth of craft supplies from Dollar Tree to make these adorable candy cane reindeer for all of our son’s kindergarten classmates.

 

We volunteered on the last day of school before winter break. The kindergartners needed some help from a retired engineer to ensure proper structural integrity in their gingerbread houses. The world has never seen such strength built from graham crackers, cake frosting, and gum drops.

 

In “real” entertainment spending, we went to The Nutcracker presented by the Carolina Ballet. These $500 worth of tickets were free. Fun story – we gave away an old 32″ CRT TV on facebook and the recipient chatted us up and ended up comping us some super expensive tickets to the ballet since she worked for them. It was pretty fun but wasn’t as exciting as the live performances we are used to on cruise ships.

 

Clothing/Shoes – $52:

A few random winter clothing items and a pair of shoes for Mrs. Root of Good.

 

Cold winter sky

 

 

 

Gas – $51:

Slightly more than one tank of gas. We drove to the North Carolina foothills to visit my grandmother and celebrate her 90th birthday!

 

My uncle’s little country retreat in the NC foothills. My first time driving a long distance in sort-of snowy weather!

 

Where do 90 year olds really really want to go for their big milestone birthday? The “fish camp” of course! Mmmmm piles of fried seafood.

 

Automotive – $44:

I paid $39 for an oil change at the dealership. This is the first time I’ve paid for maintenance on the minivan that we bought in 2016.  While there, we also let the dealer perform a few non-critical recall fixes.  They found a few things that needed attention on the van but otherwise gave it a clean bill of health.

One of those items needing attention was a burned out tail light. Instead of paying the dealer $20 to replace a single bulb, I bought a new set of tail light bulbs and a new set of license tag light bulbs (required equipment in North Carolina, and something that failed me on the annual safety inspection in the past).  Total cost: $4 shipped from Rock Auto online (or about $11-12 at the auto parts store).  In the minivan, it’s a pain to get to the rear light bulbs because the interior panels must be removed. As a result I wanted to replace all the bulbs in there at one time so that they will hopefully last the life of the van (and I paid a few pennies extra to get the “long life” light bulbs).

 

Restaurants – $37:

We’re stuck in our boring ways. Just one family visit to our regular haunt – the neighborhood Chinese restaurant.

 

Cable/Satellite – $14:

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

 

I’m passing my love of Starcraft 2 to my son. Guess what we did during the entire winter vacation from school? Hint: there might have been more than a few Zerg, Protoss, and Terrans harmed in the process.

 

Telephone – $4:

I’ve been using Google Voice hooked up through an Obihai Telephone Adapter to get free VOIP home phone service for several years.  Something technological happened such that the older Obi100 adapter stopped receiving firmware updates. Google updated their Google Voice security interface and boom – my old Obi100 no longer played nicely with Google Voice. I found a $4 workaround through some telephony forums and paid that small fee to keep things running for free (at least on a recurring basis) in the home phone department.  I briefly considered tossing out the home phone completely but it is handy to have the whole house set up with phone service without relying on our cells.  And the price is right.

 

Total Spending in 2017

All told, we spent only $31,708 in 2017. That’s about 80% of our annual $40,000 early retirement budget.  We had a great time in 2017 and didn’t lack for anything.  We enjoyed nine weeks traveling across Europe and a week cruising the Caribbean.  We had a new roof put on the house.  Lots of fun was had by all!

I don’t see any huge expenses coming up on the horizon in the short term.  Our big 2018 summer vacation is mostly paid for.  The annual property tax bill is paid.  I don’t foresee any big housing expenses in 2018 although our water heater and furnace are both getting older and there’s a small chance that we would have to spend a lot on repair or replacement of either one of those systems during 2018.  Don’t worry; it’s in the budget along with other capital expenditures for all major systems in our house.

Life is good.  I’ve expressed this opinion before, but I really feel like we’re living a $100,000 lifestyle on $40,000 per year or less.  After four years of early retirement, our spending has averaged $32,000 per year (see summary below).

 

Monthly Expense Summary for 2017:

 

Summary of annual spending from all years of early retirement:

 

Net Worth: $2,037,000 (+$26,000)

Another month is over. Another YEAR is over! Our net worth increased yet again in December, making 2017 a year with 12 out of 12 months with positive net worth gains.  I’ll be surprised if we ever experience another year with such smoothly positive net worth growth.

In December, our stash of investments grew by $26,000 to bring our total net worth to $2,037,000.  Year over year, we’re $357,000 richer than we were at the end of 2016.  That astronomical amount of growth is more than five times what I earned on a yearly basis while working full time as a transportation engineer.

Here’s my market forecast for 2018: The market will go up, and the market will go down. I have zero clue where we will end up on December 31, 2018.  However I expect that on December 31, 2038 we will look back longingly at how cheap stocks were way back in 2018.

As far as investments, my biggest change in 2017 was switching to a slightly more conservative asset allocation.  I sold stock mutual funds and ETFs throughout 2017 and bought VBTLX, the Vanguard Total Bond Market Index Fund, with the proceeds.  I’m now the proud owner of $127,000 worth of bond funds.  In addition to the bonds, I hold $15,000 in 2% CDs at my local credit union and another $35,000 in money market accounts yielding 1%.

In total, I’m holding just over $175,000 in fixed income investments (including cash) which represents just under 10% of my total portfolio. The other 90% remains invested in a broad asset allocation covering the entire globe.  At an average annual spending level of $35,000 per year, the fixed income allocation will cover five full years of living expenses. Add to that five years of $8,000 per year in dividends from the taxable brokerage account and that would result in another year of living expenses.  If we enter a multi year bear market we’ll have plenty of cash and bonds on hand to get us through the tough spots without selling our equities for quite a while.  This worst case back of the envelope contingency planning excludes any blog or consulting income (which covers our monthly spending in most months).

I wanted to close this blog post with a hearty “Thank You!” to all the Root of Good readers and I’d like to extend best wishes for a prosperous 2018 from my family to you and yours!

 

 

How much progress did you make toward your early retirement goals in 2017? Any big New Year’s Resolutions for 2018? 

 

 

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Castles, Skyscrapers, and Prosciutto in Milan, Italy

Welcome to stop number five on our nine week trip across Europe! This post covers the four days we spent in Milan, Italy at the end of June. We flew to Milan from Seville, Spain on a super cheap two hour Ryanair flight.  Earlier in our trip, we visited Lisbon, Portugal, then flew to Malaga in southern Spain before taking a bus to Granada.

This was our first time in Italy and I didn’t have a clue where to visit. I considered Rome but I figured it would be too ambitious to tackle in just four days so we decided to save Rome for later.  Milan, though still a sizable city, proved a good choice to fit in a four day slot in our schedule before we headed onward to Venice.

Milan offers a great mix of the new and the historic.  In a single day of sightseeing, one can take a hundred year old trolley line to go from centuries old castles and cathedrals to cutting edge ultramodern skyscrapers.  Both the old and new proved interesting to me!

The Old – Milan Duomo

The new – Unicredit Tower

 

Sforzesco Castle and Sempione Park

The main highlight of our trip was the Sforzesco Castle and the Sempione Park. These two attractions sit side by side in the central core of downtown Milan and are easily accessed by a subway, bus, and trolley.

In the castle courtyard

 

The castle itself offers free admission all the time. If you want to enter any of the several museums on site, there is a small admission fee.  We skipped the museums and explored the castle grounds extensively instead.

Inside the lower levels of the castle.

 

Walking out of the castle’s northwest entrance brought us to Sempione Park. It’s a big tree-filled leafy green nature preserve right in the middle of downtown Milan. Kind of like New York City’s Central Park on a smaller scale.

Green fields, trees, and a monument in the distance.

 

Walk all the way across the park and you arrive at the Arco della Pace.

 

Galleria Vittorio Emanuele II and the Milan Duomo

The Duomo (or “Cathedral”) marks the Catholic Church’s historically monolithic presence in Milan given it’s prime placement in the very center of the city.  Though started in the 14th century, the final touches on the cathedral weren’t finished until the last half of the 20th century.  This was one of the more impressive churches we visited in Europe.

The Duomo provided a stunning backdrop for some amazingly talented street musicians. They were rocking out Michael Jackson and Pachelbel’s Canon on their violins!

Right next to the Duomo is another mainstay of Milan tourist stops. The Galleria Vittorio Emanuele II is a high end shopping mall built in the late 19th century.  It’s the perfect place to pick up all your must-haves from Versace, Louis Vuitton, Prada, and Swarovski.  If you need to use the restroom, there’s a free one in the McDonald’s next door to the Galleria (and you can make a pit stop at the Ferrari dealer on the way to McD’s).

 

 

 

Getting Around Town

To get from the airport to the Centrale train station near our apartment, we reserved bus tickets for the five of us for €28 total (about USD$31). It was roughly a 50 minute ride from the airport to the train station. Once at the train station we tried (but failed) to catch a city bus to our Airbnb.  After waiting for more than 30 minutes we gave up and decided to walk the mile to our apartment.  We travel light (nothing but bookbags) so the walk wasn’t bad and the weather was surprisingly nice.  We also got an in-depth preview of our neighborhood.

Subsequent attempts to use local transit were much more successful (with one caveat – read on).  Transit tickets were surprisingly cheap considering Milan’s reputation as a high priced city.  The €1.50 (USD$1.70) single transit ticket is good for 90 minutes with free transfers between tram/trolley, bus, and subway. Kids 10 and under rode free, so we only had to use three tickets at a time.  One time on the way home from downtown we used the flexibility of the 90 minute ticket to make a quick stopover to revisit a cool plaza we were impressed with earlier during our stay.

The kids LOVED playing in the fountains at Plaza Gae Aulenti near the Unicredit Tower. I don’t know if this is the kind of public fountain you’re allowed to play in, but we assumed it was.

 

It was so nice we had to revisit on a second day.

 

I got trapped inside the subway once when my transit ticket wouldn’t scan properly. Their subway operates on the scan-in, scan-out method such that you can’t leave the underground without swiping your ticket a second time upon exiting.  I tried to explain in horribly broken Italian to the transit police that I really did pay for the fare and I’d really really like to be reunited with my wife and three children on the other side of the turnstile. With a smile and a wave, this nice officer let me through without further investigation or interrogation.

 

One of the wood-paneled historic streetcars. For €1.50 you can hop on one of these beauties for a tour around the historic center of Milan.

 

Lodging for four nights with Airbnb

We reserved a two bedroom apartment near the Milan Centrale train station.  The historic core of the city was roughly 2.5 miles from our apartment.  At $86 per night, this place was a steal!  We were on the fourth floor of a seven story residential apartment building and it even came with a rickety old elevator that must have been from the Mussolini era.

Full kitchen in our sweet Milan Airbnb apartment. Perfect for making some coffee for breakfast and ravioli for dinner!

Overall the apartment was great. Easy to hop on a bus to downtown. Two minutes from a discount grocery store. Comfy beds. Comfy couch. Nice but small balcony. However this was the one place we stayed out of fourteen apartment rentals across Europe where I took a star off during the review process.

Why did the apartment lose a star? The shower curtain was covered in pink mold (though the bathtub was super clean). And the internet stopped working for a couple days before returning to normal on the last day of our stay.  My theory is that we exceeded the usage limit for the month – though we didn’t know there was a usage limit.  On July 1st the internet miraculously began working once again.  Minor quibbles for an otherwise great apartment.  Let’s just say it was 1,000 times nicer than our Airbnb from Hell in Quebec City, Canada several years ago.

I’m still a huge fan of Airbnb due to the value proposition and comfort. USD$86 per night in Milan wouldn’t even get me a crappy hotel for five people, and this apartment came with a living room, dining room, and full kitchen plus nice tasteful decor throughout.  If you want to try Airbnb for your next vacation, make sure to take $40 off your stay through this link.

 

Food in Milan

On our first full day in Milan we set out in search of a local pizzeria. We found one within a five minute walk from our apartment.  It was right next to a Domino’s Pizza, the ubiquitous US-based pizza chain (that has really improved their pizza game in the past several years).  This was my first chance to muddle through ordering food in Italian (it’s kinda like Spanish, right??).  Pointing and nodding my head seemed to work since they had all the pizzas on display behind the counter.  We didn’t go hungry in spite of my lack of Italian language skills.

Our slightly racist Airbnb host (maybe he was simply honest?) told us all about the tiers of pizza parlors in Milan.  Don’t eat pizza at the pizzerias run by the Chinese – it’s not fit to eat. The Egyptians can make acceptable pizza – that’s where we ended up finding some good slices.  But if you can find one – and mind you they are rare – eat at a pizzeria run by real Italians.

USD$12 for all of this from a local pizzeria!

 

While in Milan, we mostly cooked at home.  There was a very convenient and inexpensive grocery store close to our apartment where I picked up the staples like milk, cereal, yogurt, fruits, fresh ravioli, meatballs, and gelato.  They had raw horse meat carpaccio on the shelf but I decided not to try the horse meat this time around (it looked old and withered – not that I object to eating horse meat in general).

We hit pay dirt with several local treats like prosciutto, smoked salmon, spicy salami, dried dates, local cheeses, and olives.  These items were 50-75% less than the prices we usually pay at home.

Wonderful grocery options = good eats at “home” in our apartment!

 

While at the Milan Malpensa airport, we were treated to fine wines and spirits and plenty of food at the VIP Lounge.  For free!  During our time in Europe, we definitely put to work our Priority Pass Select benefits from our Chase Sapphire Reserve card (check out that card and more in the credit card offers).

Top shelf liquor on the top shelf at the VIP Lounge at Milan Airport. Sandwiches on the bottom shelf became dinner.  Courtesy of the Priority Pass Select!

 

Thoughts on Milan

Milan is a big, wonderful, modern city in Italy. I thought it was a great introduction to Italy since it is more manageable than a larger city like Rome, especially if you only have a few days.  Transit is easy. The city is compact.  Prices weren’t bad at all.  People were nice.  There are plenty of old buildings mixed in with newer architectural marvels.

The crowds weren’t too bad in general, though the heart of the historic center was pretty packed.  We had a good time and managed to see tons of cool stuff during our brief stay in Milan.

Next stop: Venice!

 

 

Have you visited other big cities in Italy? How do they compare to Milan?

 

 

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

 

Cracking $2 Million: November 2017 Financial Update

Where did the year go? As I write this we are less than four weeks from 2018! Time flies when you are having fun.  As usual, November weather has been beautiful here in North Carolina and we have enjoyed many nice days outside.  Now that December is here, it’s starting to feel more like winter with the short days and frost on the ground for a brief time span some mornings.

Big news on the financial front.  In November, our net worth smashed through the big $2 million dollar mark!  Our net worth climbed $33,000 to close the month at $2,011,000.  Income remained strong at $3,228 while expenses increased to $2,857 (still within budget though).  To summarize: we are doing okay financially.

 

Income

Investment income totaled $271 for the month of November.  This is mostly the interest on the bond position I’ve been building during 2017.  Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  During other months (like November) 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 roughly the same as last month, at $2,349 for November.  No complains here as that sometimes covers our monthly spending (and I get to hang out with you guys 🙂 ).

My early retirement lifestyle consulting income (“consulting”) dropped to $465 in November.  This is an ideal pace with about one hour of consulting per week.  These sessions provide a nice bit of intellectual rigor for me while also helping others fine tune their early retirement goals.

Deposit income of $117 was cash back from the Ebates.com and Mrrebates.com online shopping portals.  If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  When shopping online, I always check to see if I can score some extra cash back by using one of those online shopping portals (and it usually pays off!).  I paid for a cruise in October which will lead to $40 cash back later this month.

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 November expenses:

After four months of spending less than $2,000 per month, November saw our spending rise to $2,857.  That’s just a few hundred less than our budgeted spending of $3,333 per month (or $40,000 per year).  November’s spending was bigger than other months because I bought several gift cards and paid extra on our utilities in order to get bonus points from credit card sign up offers.  The gift cards and utility balances will be used over the next several months (so I’ll be spending less during those months).

 

Groceries – $1,068:

We usually spend closer to $500-600 per month on groceries. In November, I spent an extra $325 on Walmart gift cards to snag an extra 10% cash back on those purchases. I checked Personal Capital and we spend about $1,000 each year at Walmart so it shouldn’t take long to burn up these gift cards and make an extra $32 in the process.

After accounting for the gift card purchases, we spent closer to $700 on groceries in November. My best guess at what caused the extra spending was stocking the pantry and wine cabinet.  There might be some Christmas gifts mixed in with the grocery spending since we find many gifts at Aldi, Lidl, and Walmart and don’t do the best job splitting out those expenses in these monthly financial updates.

For those that missed my last article comparing Costco versus several other competitors, it is worth checking out since some people found it rather controversial with more than 200 comments so far.  I knew Costco would be a little more expensive than some other stores but I was really shocked to see it was 40% more expensive than Walmart for a basket of staples!

Gratuitous food pics from November:

Somen noodles and thin sliced steak with green papaya salad. About $2 worth of food. This plate is $30 at the wildly popular local Laotian restaurant and it’s not as good as this simple home cookin’ 🙂

 

Obligatory monthly pho-to (<– see what I did there).  This time it’s pork and turkey pho broth with shrimp and turkey organ meat. I personally omitted the innards from my bowl 🙂

 

Eastern NC Barbeque

 

Thanksgiving at the in-laws. We brought a roasted turkey, pumpkin rolls, cookies, and macaroni and cheese. No one went home hungry.

 

Healthy stuff that was on sale this month (our fruit bowl runneth over).
Pomegranates, avocados, kiwis, tomatoes, and mangoes. The persimmons are from Mrs. Root of Good’s family friends.

 

Utilities – $520:

I added $270 on the water bill account and $250 on the natural gas account even though I still had a small credit balance on both. We usually spend about $250/month total between water, gas, and electric so this month was about double due to prepayment.  Gotta earn those credit card sign up bonuses by shifting spending forward sometimes.

 

Travel – $289:

No cruises this month (like last month).  The travel spending came from three annual fees on three new credit cards that were $95 or $99 each.  I signed up for two Barclay American Airlines Aviator cards that will yield 60,000 AA points each, plus a Barclay Jetblue Card that will reward us with 60,000 Jetblue points after I meet the $1,000 spending requirement.  These points are worth roughly $2,500 to $3,000 at a cost of just under $300 in annual fees.  I’ll most likely cancel these cards before next year when the annual fee comes due again.

If you want to peruse the credit card bonuses on offer, check out my credit cards page.

 

Hiking around the lake at our favorite local nature preserve. Can you tell it’s fall?

 

We didn’t do any traveling in November but we did visit the (free) Science Museum in downtown Raleigh. This is a simulated 3D environment where you can make it rain on mountains you create! Installed by a neighbor up the street from us that sometimes reads this blog (hi if you’re seeing this!).

 

Insurance – $253:

Six month auto insurance premium for the two of us.  High liability limits but no comprehensive or collision coverage for our used minivan.

 

General Merchandise – $234:

$20 set of Pyrex glassware storage containers for the kitchen.  The Pyrex glassware was my only Black Friday purchase since we already have a house full of stuff and don’t need anything else.

$63 for three sets of bed sheets from Aldi (one of which will probably become a gift).  

The other $150 was a Walmart gift card that earned 10% cash back on my Chase card. I buy a lot of household goods and non-grocery things at Walmart so this gift card certainly won’t go to waste!

 

Clothing – $142:

New winter coats for the kids ($9.99 at Walmart!!), some shoes, leggings and/or jeggings (I don’t really know the difference nor what exactly we bought).

 

Gifts – $102:

“Gifts” is a category that raises a lot of questions this time of year.  I think a lot of the gifts we buy for people slip through the cracks and fall into other categories of spending. It’s easy to pick up a $5-20 item as you buy groceries which magically becomes a “grocery” expense. As a result I figure I under report my gift spending while over reporting my grocery and household goods expenditures. It all works out in the end since I’m most concerned about our bottom line and not the exact category that everything falls into, but it’s worth mentioning in case anyone sees that we only spent $102 on gifts.

$42 of gift spending went to 2018 custom photo calendars for family (and one for us!).  Walmart runs a $10 deal every year and we take advantage of that.

The other $60 was spent on two new Moto E cell phones for our older two kids. One lost her previous phone at school (perhaps it was stolen) and the other kid is a new inductee to phone ownership.  We bought the phones from Freedompop which offers a conveniently priced $0 per month cell phone plan.

I’m treating the phones as a gift expense since we usually reward the kids for good grades each quarter and they did phenomenally well with Q1 grades (all A’s between them except for one B).  This $60 per quarter incentive should save me a lot of money on college costs one day.  Usually we hand them cash: $5 per A, $2.50 per B, nothing for a C and a stern “strategy session” talking-to for anything lower.

I’ve read that paying kids to earn good grades makes kids think grades are instrumentally valuable and not intrinsically valuable.  I view it in a different way.  It’s no different than earning a merit based scholarship in college or performing well at a job and getting a raise and a bonus. Effort is instrumentally valuable in receiving those good things. Knowledge is intrinsically valuable in itself, and I hope they learn that lesson by example at home regardless of whether we routinely compensate them for good grades.

Keeping them flush with cash also puts spending decisions in their hands instead of mine since my stock response to “can I get this?” is “sure, you can buy anything you want with your own money!”.  Because Money is the Root of Good.

 

Downtown Raleigh colors in fall.

 

Home Maintenance – $74:

$45 went to the teenager we hired this summer to mow our grass while we were in Europe on vacation for 9 weeks.  I gave him a $25 end of summer bonus plus his usual $20 for mowing the yard.  They just now got around to cashing the check (so I made an extra $0.03 from float since August).

I spent $19 on a new range hood from Amazon. I’m sad to report that the fan in our old range hood died after 45 years of devoted service.  I went for an open box item from Amazon Warehouse deals and had to send the first one back due to some defects whereas the replacement is nearly perfect. The range hood would have been $69 full price.

The remaining $10 of home maintenance spending went toward our neighborhood’s annual Luminaria light display on Christmas Eve.

 

Restaurants – $58:

We don’t spend much on dining out and November was no different. We went out to the amazing neighborhood Chinese restaurant as a family to celebrate good grades ($36).  I went out to lunch with an old law school friend and spent another $9 (and finally tried the local Korean fried chicken place that everyone’s been talking about; I was unimpressed).  I also used up a $10 Groupon credit plus $3 out of pocket to buy a $20 Groupon for a local Mexican restaurant.

Sushi from the $7.99 Chinese buffet.

Rounding out the restaurant spending was $9 for two visits to a local bakery for their amazing apple fritters and donuts (Baker’s Dozen Donuts if you’re local to Cary/Raleigh).  I’m glad for health reasons that their nearest location isn’t too close to our house…

 

Healthcare/Dental – $56:

$32 of healthcare spending was two months of monthly premiums for our health insurance plan that’s mostly paid for with ACA premium subsidies.

FYI, open enrollment for the ACA plans is still available through December 15 so head over to Healthcare.gov if you need to sign up for 2018.  I already signed up for almost the exact policy we have in 2017.  The premium went up slightly due to some quirks in how the ACA premium tax credit is calculated.

I spent $10 on replacement toothbrush heads for my Sonicare.  That’s several times more expensive than a regular toothbrush but if it prevents just one cavity every decade it pays for itself.  And my teeth are shinier and mostly hole-free.

The remaining $14 was a miscellany of labwork, a $5 copay at the doctor and a $2 prescription.  “Obamacare” insurance isn’t a derogatory term in my experience as it’s working pretty well.

 

Gas – $41:

Our monthly visit to the gas station.

 

Cable/Satellite – $14:

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

 

Entertainment – $0:

I’m not sure why this showed up on the Personal Capital expense report.  I must have spent a penny or a dollar on a Humble Bundle package of computer games.  I also picked up a completely free game through Humble Bundle called “Rebuild 3”.  That kept me busy for a couple of weeks. It’s like SimCity or Civilization, except you’re killing zombies while rebuilding a decimated city.  In other words, it’s awesome.

Another $0 entertainment experience. These sunsets over our backyard and lake.  The kind of sunset that makes you drop whatever you’re doing and hurry outside to stare at the heavens on fire.  #nofilter

 

Year to Date Living Expenses for 2017

With only one month remaining in 2017, we have spent $23,754 year to date.  That’s roughly $13,000 below the $36,667 budgeted for the first eleven months of the year.  Needless to say we are well on track to come in WAAAAY under budget for 2017.

Big ticket items remaining in 2017 (or very early 2018) are our $1,500 annual property tax bill and a $600 spark plug job for the van.  Who knew spark plug replacement on a minivan costs more than a timing belt change on a Honda Civic??  The shop said they charge four hours of shop time for the repair because half the engine must come out to get to the rear three plugs. Four hours of pro mechanic time translates to 8-12 of my hours so I’m going to outsource this task and be lazy.

Our vacation planning for summer of 2018 is still underway.  After a mostly fruitless attempt at finding the perfect beachfront rental in the Cancun area, we have moved on to searching the Bahamas.  I think we have found the perfect place and might end up with a $6,000-$7,000 vacation that consists of a month of lounging on a mile of mostly deserted pristine white sand beach with crystal clear water.  And the rental has high speed internet and air conditioning.  After travel hacking it might only cost $2,000-3,000 out of pocket including groceries and car rental.

 

Monthly Expense Summary for 2017:

 

We went hiking at this county park that offers the best long-distance views of the Raleigh area. The park trail is built atop an old landfill.

 

Net Worth: $2,011,000 (+$33,000)

Woohoo!!  Two Million Dollars!  It’s a big milestone but doesn’t really buy us anything that we don’t already have.  It is a nice feeling to quit your full time office jobs, do a little fun creative stuff on the side and mostly sit back and watch your net worth grow by many hundreds of thousands of dollars over the course of a few years.

This might sound strange, but I didn’t do anything to celebrate other than Twitter bragging to Carl (aka Mr. 1500 Days) that I beat him to the $2 million mark.  He’s only $10,000 or so behind me so I expect he’s close to cresting this particular hill too.

We are now up roughly $400,000 since October 2016.  That’s enough to fund 10-15 years of early retired living expenses if we spend $25-40,000 per year like we have been doing these past several years.  It’s crazy to think about it in that way, but that’s the only way I can put these large numbers in perspective.

As I mentioned in last month’s financial update, I’m planning several things for year end 2017:

  • harvest capital gains – about $4,000 gains from selling a $14,000 mutual fund position (DONE; $3,994 long term capital gains, $115 short term capital gains (oops))
  • continue my Roth IRA Conversion Ladder – planning to convert ~$5,000 (to be done by December 31, 2017) (WORK IN PROGRESS)
  • fund my solo 401k to create a tax shelter for income from Root of Good – $18,000 into Roth solo 401k; $6,000 into traditional solo 401k (for the RoG employer portion). (PARTIALLY DONE – took the $14,000 from sale of mutual fund and stuck it in the Roth solo 401k).
  • fund a his and hers Roth IRA – $5,500 x2 = $11,000 (to be done by April 15, 2018) (WORK IN PROGRESS)

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

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

As part of the $14,000 mutual fund sale, I ended up swapping around some other investments to add a total of $14,000 more the the Vanguard Total Bond Market index fund (VBTLX), held within a traditional IRA.  That puts my bond position at roughly $127,000 and all of that was acquired this year.

I also moved $15,000 cash from a money market earning 1% to a five year CD earning 2% (with a 90 day interest penalty for early termination).  If rates remain constant that move will earn an extra $150 per year in interest.

 

Christmas is almost here! Celebrating with our new $10 white Christmas tree!

 

I don’t have many comments on the big tax bill passed by the US House and Senate. There are some significant differences between the two bills so it’s pure speculation as to what we might end up with after reconciliation happens and the final sausage is made.  Looking at the prediction markets, there’s still a 10% chance this tax bill thingy won’t pass in the next four months.  I think my taxes will stay the same based on preliminary back of envelope calculations.  Wealthy people seem to do pretty well with the new bill whereas there will be a lot of subgroups that won’t do very well.

 

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

 

 

How about our financially bountiful 2017 so far?  What would you do to celebrate cracking the $2 million milestone?

Getting excited for wintertime and the upcoming holidays?  

 

 

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

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

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

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

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

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

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

Results

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

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

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

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

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

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

 

A few notes on methodology

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

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

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

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

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

 

Grocery Shopping Strategy

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

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

Here are the main takeaways from that article:

 

Do:

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

 

Don’t:

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

 

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

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

 

Costco Isn’t All Bad, Right?

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

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

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

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

 

Conclusion

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

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

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

 

 

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

 

 

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

Cruising through Fall – October 2017 Financial Update

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

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

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

Income

Investment income totaled $1,096 for the month of October.  This is the last dribble of quarterly dividends from funds that pay at the end of the third quarter.  Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  During other months investment income tends to be much smaller.  We are well on our way to earning roughly $30,000 in dividends for 2017, as we have in the past.

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

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

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

Nephew’s birthday party at the city park

 

Deposit income of $62 was cash back from the Ebates.com and Mrrebates.com online shopping portals.  If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  When shopping online, I always check to see if I can score some extra cash back by using one of those online shopping portals (and it usually pays off!).  I paid for a cruise in October (more details later in this article) which will lead to $40 cash back in the next month or two.

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

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

Beautiful lakeside hiking this fall!

 

More stunning hike views

Expenses

Now let’s take a look at October expenses:


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

 

Travel – $928:

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

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

 

Sailing away from Miami!

 

Beautiful Bahamas

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

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

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

In selecting expensive flights, we thought to ourselves:

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

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

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

 

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

 

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

Going on a Cruise Part 1: Overview

Going on a Cruise Part 2: Getting the Best Deal

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

Going on a Cruise Part 4: The Food!

Cruising the Caribbean Aboard the MSC Divina

 

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

 

Good times were had by all.

 

Groceries – $609:

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

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

 

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

 

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

 

Charitable Giving – $50:

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

Lazy day in the back yard with friends.

 

Education – $48:

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

 

Healthcare/Dental – $39:

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

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

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

 

Gas – $36:

Our monthly visit to the gas station.

 

Restaurants – $15:

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

 

Cable/Satellite – $14:

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

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

 

Automotive – $6:

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

Halloween scare house with our little pirate.

 

Year to Date Living Expenses for 2017

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

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

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

 

Monthly Expense Summary for 2017:

 

The North Carolina State Fair comes to Raleigh every year.

 

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

 

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

 

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

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

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

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

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

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

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

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

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

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

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

 

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

 

 

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

 

 

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Enjoying The Alcazar and Jamon Iberico in Seville, Spain

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

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

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

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

 

More than an Eyeful!

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

 

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

 

And grand courtyards

 

And patios

 

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

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

 

Plaza de España / Parque Maria Luisa

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

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

Plaza de España with fountain and horse drawn carriages

 

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

 

La familia!

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

Lake and waterfowl in Parque Maria Luisa.

 

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

 

Exploring the streets of Seville

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

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

 

Great views of the Seville Cathedral from the Torre del Oro

 

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

 

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

 

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

 

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

 

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

 

 

Lodging for four nights with Airbnb

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

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

 

Basic but impeccably clean kitchen with eat-in table

 

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

 

Food in Seville

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

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

 

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

 

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

 

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

 

Thoughts on Seville

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

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

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

 

 

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

 

 

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

 

 

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

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