Category Archives: Lifestyle

October 2016 Financial Update

Now that the trick or treating is over and October is gone, I’m ready to share the good and bad financial data from last month.  Our income, mostly derived from this blog, remained very strong at $8,365 while our expenses ended the month at $1,460 which left us with a large cash surplus.  If I make much more money, I’m afraid I might be “unretired”!

I can’t say I paid any attention to the stock market in October but apparently it declined.  In spite of income exceeding expenses by about $7,000, our net worth still dropped by $29,000 to $1,618,000.  Since this is significantly more money than we had a year or two ago, I continue to feel safe and secure at our current net worth levels.

Here’s the straight dope on our October financials:



October investment income dropped to $31 after a much stouter September with $4,160.  That’s the nature of the beast since most of our funds pay at the end of each quarter which means March, June, September, and December always bring us high investment income while the other months are near zero.  We are still on pace for matching or exceeding the total of $28,527 in dividend income received in 2015.  Although I’m no dividend-focused investor, dividends still figure significantly into our annual cash flow by helping provide the funds we need for living expenses.

No October post would be valid without the obligatory pumpkin pic. Neighborhood event in the park.

No October post would be valid without the obligatory pumpkin pic. Neighborhood event in the park.

Blog income, shown as “other income” in the chart, ballooned to $7,253 while my early retirement lifestyle consulting also increased healthily to $1,076.  Blog income was higher than normal because I received both September and October payments from one advertiser during the month of October.  The consulting income remained very strong even though I raised rates last month.  As one client mentioned, it’s hard to find good, competent professionals that understand taxes and investments with a focus on very early retirement at any price point, and particularly at the relative pittance I’m charging (though I don’t claim to be a professional or anything more than “a guy that writes stuff on the internet and retired at 33”).

The $4 in Deposits includes the cash back rebates from the and online shopping portals. If you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  I try to do all of my online shopping through one of these portals and the cash back adds up fast. I recently booked an $857 cruise for next month through Expedia by clicking through Ebates to get to Expedia.  I’ll be getting $85.70 in cash back once we return home from the cruise in December.  Ebates is a nice way to get a 10% discount on every cruise from a booking site we already use.  I’ll also be using one of those shopping portals later in the month if I see any good deals on Black Friday / Cyber Monday.

On a slightly different note, our ten year old just landed her first job!  Someone asked us if one of our kids would be interested in making some cash as a tutor for their kid.  Now our little gal makes $10 per hour as a tutor.  She will be working one hour after school Monday through Thursday.  If this gig continues, she might make enough to fund a Roth IRA like Go Curry Cracker’s kid!  This also supports my notion that mom and dad won’t be on the hook for very much during the kids’ college years.


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).



Now let’s look at October expenses:


While some consider $1,460 to be a mind blowing monthly expense total for a family of five, I consider it just another routine month where we didn’t have any huge lumpy annual expenses (like property taxes or insurance).  We spent almost $2,000 less than our budget of $3,333 per month (or $40,000 per year).  For the second month in a row, travel spending topped the expense report (and I like it that way!).

Travel – $579:  In September it was cruises. In October it was plane tickets for the five of us to, from, and around Europe.  We booked tickets from Raleigh to Lisbon, Portugal for June, 2017 with the return from Amsterdam to Raleigh in August, 2017.  Even though we used United Airline miles to score “free” tickets, we still had to pay tax on the tickets which was almost $400 for the five of us.

For those in the points/miles game, we spent 60,000 miles per ticket, or 300,000 total to fly economy between Raleigh and Europe.  By booking so far ahead of time we scored some great flights that are only 10 hours to Europe and 13 hours back home including connection times.

With United’s new redemption rules, you get a free one way flight anywhere within the region you’re flying to (in this case, Europe).  We used the free flight for a short hop from Lisbon to Malaga, Spain.  We could have flown all the way across Europe to some distant corner (Estonia?) but instead chose to take a relatively short flight to coastal Spain since we wanted to visit that area and it’s cooler in June than it is later in the summer.  We’re slowly making our way north across the continent as the temperature rises throughout the summer.

All of those 300,000 United miles came from sign up bonuses for credit cards, so if you’re interested in free flights to Europe don’t forget to check out my credit card page.

We also jumped on a luke warm Ryanair deal from Seville, Spain to Milan, Italy for $194 total for the five of us.  There might be some extra checked bag fees later on if we can’t pack extremely light like we did for our 7 weeks in Mexico last summer.

All of our gear for seven weeks in Mexico.

All of our gear for seven weeks in Mexico.

So far, we spent $579 for our 9 week trip to Europe and managed to buy all the flights for our trip (20 one way tickets in all).  Hopefully this is prelude to a nice low cost, high value summer in Europe!

After visiting Portugal, Spain, and Italy, we will continue through Slovenia, Austria, Hungary, Czech Republic, and Germany before flying back home from Amsterdam.  It won’t be cheap even with my travel hacking skillz.  I’ll feel really proud if we can pull it off for less than $10,000, and content with a total under $15,000.  In rough terms, we’ll probably spend around $6,000-7,000 on lodging ($100/day), $3,500 ($50/day) on food, $2,000 ($30/day) on ground transportation between and within cities, and $1,000 on various admission fees, attractions, and entertainment.

Sound off in the comments if I’m being completely ridiculous about prices but keep in mind we have hotel points for free nights and will rely heavily on airbnb (click for $35 off your first rental), and will probably dine out once per day and buy groceries for the other meals.  Trains and buses are stupid cheap in most places ( is amazing for cost comparisons) and often come with kids ride cheap or free promotions.

I’ll probably ramp up the hotel/airbnb reservations in the early spring and book those advance purchase train tickets that come with discounts for booking early as the reservation windows open up.  Anyone have experience booking airbnb apartments six or eight months before their stay?

I’ll publish a more in depth article on the trip at some point.

Groceries – $366: Another modest month buying groceries.  Some of the savings came from “shopping in our freezer and pantry” instead of buying stuff at the store.  Here’s a typical month of groceries for us.

We enjoy good food cooked from scratch.  Somehow we find these incredible deals on groceries including some high end, “fancy” ingredients.  At Kroger, we scored about $80 worth of imported Italian goodies like cheeses, pasta sauce, prosciutto, and olives at 75-95% off retail prices.

We also shop at the ethnic grocery stores in our neighborhood.  After walking to the kid’s school for morning drop off, we continued walking to the neighborhood Latino supermarket and picked up three pounds of poblano peppers (on clearance but still perfectly good), a bunch of cilantro, two and a half pounds of fresh tortillas, and two bottles of imported Guatemalan hot sauce for $6.  These goodies combined with some large hunks of meat led to incredible fajitas for under $1 per meal.  “Reminds me of those street tacos in Mexico” one of our kids remarked.  ¡Que rico!

Some of that prosciutto and mascarpone gracing the tops of some day old ciabatta bread. Mmm... discount good eats.

Some of that prosciutto and mascarpone gracing the tops of some day old ciabatta bread. Mmm… discount good eats.

Clothing – $134: Fall and winter clothes for the kids.  One pair of shoes.  A combo of Walmart and the thrift store.  The thrift store offered all girls/women’s apparel at 40% off.  How incredible is that?  A steep discount on top of already low prices.  As usual, the thrift store haul included some articles of clothing with price tags still attached.

Healthcare/Medical – $129: Health insurance premiums of $125 for our very impressive gold plated silver plan obtained through with some very sizable ACA subsidies. $4 for some random lab tests at the doctor.

For those looking for insurance in early retirement, on November 1st the marketplace started open enrollment for 2017.  You can price out plans based on your income and household size.  Even though North Carolina was one of those states that lost a few insurers, we picked up one new insurer (Cigna) bringing the total number of companies offering insurance in Raleigh to two, with Blue Cross Blue Shield being the other one.

The two cheapest silver plans look like reasonably good options for our family.  I’m debating between the $50 per month plan with $200 deductible, no kid dental coverage and limited network and the $125 per month plan with $800 deductible, kid dental, and nationwide network plus out of network coverage.  Those costs are after the very generous premium tax credit/subsidy and include large cost sharing subsidies since our MAGI is less than 150% of the federal poverty level.

Utilities – $103: Water, sewer, trash.  In a previous month I prepaid the electric bill by applying an extra $250 toward my account balance – more credit card travel hacking.

October is a cheap time of year for utilities since we don’t need to use the heat or the air conditioning.  Winter is coming (like the Game of Thrones reference?).  A few minutes before pressing “publish”, I had to turn on the heat.  It was 62 inside the house and the forecast for the week calls for brisk mornings in the 40’s and cool afternoons topping out in the upper 60’s.  I appreciate thriftiness, but don’t mind dropping a few bucks to keep it 68 degrees during the day and 63 at night.

Hurricane Matthew blew through in October. Culvert underneath our property almost topped out. That plus 4-5 more feet of water equals a flooded crawlspace.

Hurricane Matthew blew through in October. Culvert underneath our property almost topped out. That plus 4-5 more feet of water equals a flooded crawlspace.

On the bright side, the kids got to play in a hurricane!

On the bright side, the kids got to play in a hurricane!

Education – $66: Field trips for the year for the elementary school kid.

Free education: troubleshooting a freebie TV given to us by some family. Looks like a $4 fuse will fix it.

Free education: troubleshooting a freebie TV given to us by some family. Looks like a $4 fuse will fix it.

Restaurants – $38: Dinner at a pizza place for the whole family and a clandestine lunch at the Chinese restaurant for Mrs. Root of Good and I (we brought home some fortune cookies and mints for the kids).

Internet (“Cable”) – $34: 50/5 mbit service.

Entertainment – $4: One hour boat rental on the city lake.  Small price to pay for a beautiful morning paddling on the water.  My first bald eagle sighting was included at no additional charge.

Most of our entertainment is free.  Tennis or other sports/recreation at neighborhood parks.  Walking/hiking on the trails.  Hanging out with friends at the park or at our house.  Campfires in the back yard.  A seemingly endless string of birthday parties.  Visits to the art museum, science museum, and children’s museum.  After all that, it’s time to kick back and relax with some video games, Netflix (which actually costs us a tiny bit), and library books (like European travel guides).

Free visit to the children's museum. I'm strapped in with the little dude at the flight stick. HELP!!

Free visit to the children’s museum. I’m strapped in with the little dude at the flight stick. HELP!!

Special huge inflatable bunny week at the Art Museum. Free, of course.

Special huge inflatable bunny week at the Art Museum. Free, of course.

Boat rental - not free but worth every penny of the $4. Also cheaper and more fun than a gym membership. And bald eagles.

Boat rental – not free but worth every penny of the $4. Also cheaper and more fun than a gym membership. And bald eagles. And look at that grin.

Home Maintenance – $2: A gallon of gas for the lawn mower. Colder weather = no more mowing (soon).

Gas – $0: Nope, not for the car. But I did get a full tank in early November which you can read all about next month.


Year to Date Living Expenses


That should read “through 10/31/2016”

At $30,780 year to date spending, we remain below our annual spending target of $33,333 budgeted for the first ten months of the year by a few thousand dollars.

Other than paying for gas, parking, and tips on our two cruises in December, we won’t have a lot of expenses out of the ordinary.  I’m planning on replacing the roof sometime in the next year but I don’t think I have time to get bids, research those bids, schedule an installation time, and deal with any unexpected delays before we leave for our first cruise in less than three weeks.  And there’s a huge Thanksgiving feast we’ll be throwing somewhere in that schedule.  Otherwise, I would go ahead and tackle this project in November.

The budget for the roof replacement is somewhere around $4,000 to $8,000.  I could probably fit it in the $40,000 annual budget this year, or underspend 2016’s budget by a bit, then go over slightly in 2017 if we do the roof replacement in the spring.


Monthly Expense Summary:


Net Worth: $1,618,000 (-$29,000)

After several good months we experienced a slight reversal of fortune in October as $29,000 disappeared from our net worth statement.  It’s to be expected.  The market goes up, it goes down.  October happened to be a down month.  So far November is following in October’s footsteps.


From last month’s financial update:

We’re still sitting on over $50,000 in cash in our credit union money market account right now.  I’ll be moving some of that cash around for year end tax planning, like a large solo 401k contribution, but I will also hang on to part of that cash in order to provide a buffer against severe market downturns.

My procrastination paid off since we’re sitting on even more cash right now and I still haven’t pulled the trigger on the IRA or solo 401k contributions and the market is lower now than it was a month ago.  I’m either the wisest or laziest investor ever.

This pretty much sums it up right here. Didn't cost a penny but worth a million bucks.

This pretty much sums it up right here. Didn’t cost a penny but worth a million bucks.


Looking for year end tips to get your finances in order? Check out these 11 tips to finish the year strong.



How was your October?  Any big year end financial moves?  Ready to end the year on a high note?



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My first person view of gentrification

Earlier this week I walked out the kitchen door and down the sidewalk destined for the neighborhood Food Lion grocery store.  It’s a quick five minute walk to the shopping center and proves uneventful on most trips.

This day was a little different for a number of reasons.  Half a block away from home, I bumped into a new neighbor.  We started chatting about the neighborhood, the fancy downtown magnet school both of our children attend, and his most recent acquisition: oboe reeds.  This guy had a different vibe than many other neighbors that moved here over the past several years.  He’s completely white and fluent in English for starters.  Solidly middle class.  After doing some cybersleuthing later in the day, I realized he paid about 50% more for his house than what his neighbors did a few years earlier.

We shake hands and part ways after exchanging contact info to stay in touch (we’re neighborly like that down here in the South). I proceed to the grocery store in no particular rush (I’m retired after all).  I enter the shopping center through the short cut by the dumpsters.  And lo and behold there’s a homeless looking gentleman laid out on the sidewalk in the sun chugging a half gallon jug of whole milk.  Not my first choice of mid-day beverage, but it was warm that day so I guess 64 fluid ounces of ice cold milk hit the spot, right?

Upon entering the store, the weird continued.  The first customer I encountered was a lady cruising around in the store’s mobility-aid cart.  She was yelling to her friend about WIC cheese.  If you know who Fat Albert is, then read the following in that voice.  Otherwise, read it in a very deep, throaty voice.

“Where da WIC cheese at? Hey, where da WIC cheese at?  Ain’t nobody got no WIC cheese up in here.  Where it at?”

“It ova heah” her friend suggests.

BEEP – BEEP – BEEP – BEEP – BEEP, she backs up the motorized cart.

“Where it at? Oh dat ain’t what I want.  What else dey got? Where da WIC cheese at?”

A few more moments perusing the shelves.

“Dey ain’t got no WIC chedduh?”

At that point, I had to leave or else I might have lost it.  Laughter, tears, anger; I wasn’t sure what emotion would come next.  Look, I just wanted some string cheese for my kids (and I’m not gonna lie, for me too, because that stuff is deceptively good).  It was on sale for a buck fifty for a 12 ounce package which is darn cheap for mozzarella, let alone mozzarella shaped and individually wrapped in portable one ounce snack sticks.  But I couldn’t get to it because of the circus going on in the dairy aisle.

Lest I appear overly classist here, I genuinely feel for people that have to jump through those hoops to get a free block of cheese, and I have to assume there’s a better way to administer a governmental program to get nutrition (“nutrition”??) to people that need it.  Our household has the option to apply for WIC, even though we clearly don’t need it.  But there is no way I’d waste time on that given the hassles involved (at least in our state).

I don’t know if the lady in the go-cart got her WIC qualified cheddar cheese, but I did see her later.  She was holding up the extremely long check out aisle, presumably with WIC related issues.  I smartly chose to head to a different check out aisle, since I knew it would take quite a while to unravel her shopping basket mysteries at the cash register.  Disaster averted.

In the meantime, I had the fortune to stand behind someone who appeared to be suffering from heroin or meth withdrawal.  Either that or she was a really bad erratic dancer, twitching and swaying about to some unmusic heard only in her own head.  At least it didn’t take long to ring up her hot dogs ($0.99), bologna ($0.99), white loaf bread ($0.78), Ho Ho’s ($0.89), bar-be-que sauce ($1.29), and sliced American cheese food product ($1.68).  I’ve never had BBQ sauce on bologna or hot dogs, but it does sound like an interesting combo.

Fun times in the grocery store.

You’d think it was time to move given how sketchy the neighborhood grocery store is.  But you would be wrong.  It’s time for the “good” people to move near me.  It’s time for GENTRIFICATION!

What's that? Oh, just a couple of Celtic fiddlers at our community Halloween festival that don't fit the typical mold.  Stereotypes are pretty worthless so many times.  This is what I like about our neighborhood.

What’s that? Oh, just a couple of Celtic fiddlers at our community Halloween festival that don’t fit the typical mold. Stereotypes are pretty worthless so many times. This is what I like about our neighborhood.


Very Humble Beginnings

Gentrification is already well underway in my neighborhood today.  But that’s a recent development from the past couple of years.

We moved in 13 years ago when things didn’t look so rosy.  It wasn’t the worst area of Raleigh by any stretch.  But it wasn’t the best either.  And there are plenty of sketchy communities scattered outside the perimeter of the neighborhood which don’t help our zip code’s demographics at all.

The neighborhood elementary school was in steady decline year after year, at one point becoming the worst school in the district based on poverty level of students at the school and test scores.  We sent our kids there anyway.  We took a gamble and it paid off (or perhaps our active involvement and promotion helped the school turn around?).  The county school system decided to reboot the school, fire 80% of the faculty and staff, and start from scratch while dumping tons of financial resources into the school.  Mission accomplished – there’s a waitlist now and plenty of applicants get turned away.

We encounter one of the enigmas of gentrification here.  One of chicken and egg proportions.  Did the vast improvement of the school (in spite of difficult socioeconomics still present today) fuel the gentrification, or at least remove one impediment to solid young middle class households relocating here?  Or did the improving socioeconomics of households moving to our neighborhood lead to a higher quality of student at the elementary school?

After moving into our house, we realized one neighbor was going to be a problem.  Three loud, angry pit bulls roamed his yard and stalked our fence line whenever we were in the backyard.  The owners rarely paid them any attention, so their only option was to bark.  And bark.  And bark.  Day and night.  Incessantly.

That was a relatively peaceful time before the drive by shooting.  To make a long story short, a 14 year old shot a 17 year old after their respective gangs were beefing at school.  One of the gangs just so happened to attend a birthday party thrown by the family next door.  The other gang decided it was time to retaliate.  We got to see people running and jumping through our yard as the bullets flew and a huge puddle of blood in the street once the ambulance hauled the injured boy away.

Fortunately things have a way of working themselves out.  The lady of the house apparently left.  The man of the house remained, but appeared not to be working much (and I don’t think he was early retired, if you know what I’m saying).  Not long after the shooting, the Rent-A-Center trucks showed up to repossess all their weekly rental items (TVs, stereos, computers, who knows?).  Then the mortgage company foreclosed on the property and these bad neighbors became someone else’s bad neighbors.  The guy that bought the house (and repaired all the damage and neglect) still lives next door and has two very quiet tiny indoor dogs.  All quiet on the eastern front.

edit: I wanted to point out that 4,697 of the roughly 4,700 days that we have lived in this neighborhood have been rather boring and uneventful from a crime standpoint.  And we have never been the victims of any kind of crime while we’ve lived here.  We live on a lake, there’s tons of wildlife, and we frequently walk to the park, school, and library and don’t worry about crime given its inherently random nature.  Life has treated us pretty well here, but there have been a couple of bumpy moments.  


The wealthy are coming! The wealthy are coming!

The latest crop of new residents in our neighborhood all seem to be youngish, hip looking folks holding down solid middle or upper middle class jobs.  That’s who used to live here a couple of decades ago.  Former owners of my house include a local politician/lawyer/lobbyist and a successful small business owner.

However, over the last couple of decades the property prices lagged and this opened the doors to the great unwashed masses who couldn’t afford the pricier new homes going up elsewhere in town (or didn’t want to add an extra 20-30 minutes to their commute!).

Good or bad, I don’t know.  It brought a lot of diversity to the neighborhood and most of the residents are totally awesome.  But it also let in people like my former next door neighbor, Mr. Drive By Gang Shooting.  Those kind of people seem to take care of themselves, and now there’s a whole new crop of buyers looking to escape the ridiculously priced, sometimes crappy accommodations in the really exclusive part of town and move a couple miles north or east to scoop up large yards, old trees and extra square footage at a fraction of the price.

Thanks to their money, our neighborhood real estate market is on fire.  It’s common to see sales at asking price within a day of listing assuming the price isn’t crazy.

From Zillow:


Jan 2015 Oct 2016 % Change
Root of Good House $163,000 $185,000 13.5%
Northeast Raleigh $149,000 $166,000 11.4%
Raleigh $190,000 $210,000 10.5%

In numerical terms, our house, and our neighborhood overall has slightly outperformed the rest of the zip code and Raleigh as a whole by a few percent.  I don’t think this fully reflects the limited supply and speed of sales in our neighborhood, but maybe it’s a larger phenomenon than I think.

A few years ago there were plenty of fixer uppers in the $100,000 price range with renovated houses selling for $150,000.  In what seems like an overnight shift, it’s hard to find any houses asking less than $150,000 while most houses are asking in the $180,000 to $220,000 range (and selling at those levels quickly).

Anyone want to drop $220,000 on my buddy's 2,400 square foot 5 bedroom, 2.5 bath with two car detached garage?

Anyone want to drop $220,000 on my buddy’s 2,400 square foot 5 bedroom, 2.5 bath with two car detached garage?

These kind of upward price movements probably don’t seem like a big deal to folks in high priced and fast appreciating cities like New York or San Francisco/Silicon Valley.  But for a place like Raleigh where house prices barely kept up with inflation for the past decade or two, this is a big deal.

I’m obviously the worst real estate investor ever for not buying up all the $100,000-120,000 houses I could get my hands on, renting them for several years at a nicely positive cash flow, then flipping them for $200,000 a few years later.  Maybe next real estate cycle I’ll have more time on my hands and a clearer crystal ball.

What I don’t know is how long this trend will continue.  I’m still carrying my house at a value of $140,000 in Personal Capital because I’m not sure it’s actually worth the $185,000 projected by Zillow  – they don’t know we have a partially “vintage” 1972 kitchen – and I would only get around 94% of the sales price if I sold through a realtor.  Eventually I’ll bump up the carrying value if these higher prices stick around.  I have no plans to sell even if the value went up another $50,000, so for now it’s just a somewhat arbitrary number on a screen.  And in terms of our $1.6 million-ish net worth, what’s an extra $50,000 in an illiquid asset that I can’t live in if I sell it?  Though at some point we would be foolish not to evaluate a scenario where we sell our house and move somewhere less expensive in this city or elsewhere in the nation or world.  Since we aren’t hurting for money, the payoff would have to be rather great to make it a worthwhile move (<– see what I did there?).

Thanks to this gentrification, I’ve grown a little wealthier (even if I haven’t fully recognized it on my balance sheet).  Our streets might get a little safer.  And our neighborhood will have just a bit more clout in City Council when it comes to doling out government funny money for pet projects (like that multimillion dollar park upgrade coming our way).

Some complain about higher property taxes after their area undergoes gentrification, but that won’t be an issue for us for at least seven more years since the county reassesses all home values every eight years and 2016 was the most recent reassessment (our home value inexplicably went down by seven thousand dollars).  Since our property taxes are already low at $1,500 per year for a fairly average house in the neighborhood, a doubling of property taxes wouldn’t be a huge hardship for most.

As the gentrification proceeds, I expect it will be a virtuous feedback loop of increasing values making home renovations and improvements more sensible investments, which makes the neighborhood look nicer, leading to more price appreciation.

If things keep improving, eventually we’ll have the tear down phenomenon seen elsewhere in Raleigh.  Someone might purchase my house for $200,000 or $250,000 with the intent to bulldoze the house and building a McMansion from the ground up.  In essence, they are paying a large sum of money for the land underneath my house.  Some folks REALLY hate this phenomenon because “it destroys the aesthetic quality of the neighborhood”.  In our case, it’s predominantly 1960’s and 1970’s split levels and ranches, so I’ll be interested to hear the objections I am sure many neighbors will lodge against tear downs with rebuilds.

In the meantime, the new folks moving in are classing up the block with their chicken coops.  Why go to Whole Foods for your free range eggs when you can raise them yourself in your backyard?  I’ve already spotted several Subarus sprouting up in driveways.  Next I expect they will request bike lanes painted on our neighborhood streets.

A little charcuterie setting so we'll fit in. Don't worry, all the Spanish chorizo, pine nut hummus, ciabatta bread, marinated artichokes, olives, and imported piave cheese were purchased from the clearance section. The olive oil sadly was not.

A little charcuterie setting so we’ll fit in. Don’t worry, the Spanish chorizo, pine nut hummus, ciabatta bread, marinated artichokes, olives, and imported piave cheese were purchased from the clearance section. The olive oil sadly was not.  Just need a snotty microbrew to complete the experience.


The downside of gentrification

All this new money flowing into the neighborhood isn’t all positive.  Over time, lower income residents will move on to other neighborhoods and be replaced by more homogeneous middle and upper middle income residents.  No longer will the smell of the tamales and garlic rich dishes wafting out of the open kitchen windows tickle my nose as I stroll down the block.  Kale smoothies don’t really have much of an odor.  Hearing only one language at the neighborhood park will leave me wondering “where did all my former neighbors go?”.

I used to recommend my neighborhood to everyone that would listen.  Cheap, large houses on large lots just a few miles from the city center in an up and coming neighborhood.  As the prices keep rising, I’m afraid I can’t make such a strong recommendation any longer.  If this trend continues, it will be hard for friends relocating to this city to move to my neighborhood.  In another ten or fifteen years when my kids are in the market for their first house, they might have to look elsewhere instead of buying in this area like we did for our first permanent house.

This past weekend we met up with some friends at the neighborhood park to play some tennis (a notably middle class or wealthy sport).  We are usually the only ones using the two courts.  Very rarely will another party use the second court.  This time, we had to squeeze our whole party onto one court to make room for another pair.  Then another family approached to play.  And another.  Gentrification means crowded tennis courts for us.  Now I know how the folks competing for the basketball courts and the fútbol fields feel since that’s what is usually jam packed on nights and weekends.

We are contributing to the tennis court overcrowding problem.

We are contributing to the tennis court overcrowding problem.

Perhaps the worst part of gentrification, should it continue, will be the loss of all the ethnic grocery stores and restaurants.  What will life be like without the panaderías, tortillerías, Latino, Asian and African groceries, and restaurants from all over the world?  Who would want to give all that up for organic coffee bars, hot yoga studios, a skinny jeans shop, a cronut shop, and a boutique oil dispensary?  Maybe some of those ethnic places will survive the cultural shift and stick around.  I wouldn’t mind most of the tattoo parlors, hair salons, nail salons, and pawn shops disappearing though.  And please don’t convert my Walmart to a Target.

Or maybe this whole home price increase is a flash in the pan and gentrification won’t actually stick to my neighborhood.


Lessons Learned

Gentrification can take a looooong time.  Get ready to be patient and make sure you can live in a less than perfect setting long term.

Embrace the good and the bad of your situation and make the most of it because it might be a while before it changes.  Enjoy the cultural differences to the extent possible.  People that are different from you rarely bite, and those that do often get the boot as Mr. Drive By Gang Shooting did.  Instead of flying half way around the world to experience a different culture, you might encounter it next door instead.  From that point of view, moving into an “up and coming” neighborhood can be a great experience if you’re open to it.

Don’t count on gentrification to make you rich.  The timing of gentrification is uncertain, and it may not happen at all.  Investments in your property might not pay off if gentrification never comes to pass.

Overall, I have mixed feelings about gentrification.  I don’t mind sharing my neighborhood with the poor (even the homeless), minorities, those of a lower social class, recent immigrants that might not speak English (yet), those of low educational attainment, or other societal outcasts that didn’t quite make it all the way out to the suburbs.  Mrs. Root of Good and I both have some of those groupings in our recent family history.  Those people are probably more fun than a lot of upper middle class people anyway.  We count many of them as friends.  Many times these people value education, wealth, success, and achievement as much as the upper classes, but come from disadvantaged backgrounds and never had the resources or motivation to climb the socioeconomic ladder.

On the other hand, with gentrification comes changing social expectations and peer groups.  I think we fit in better with the low to moderate income households in terms of visible spending, and feel more peer pressure to keep up with the Joneses when mingling with the comfortably middle class or upper class like those that seem to be moving in to our neighborhood.  I doubt we’ll actually spend more money as a result, but it’s a tricky spot to be in.  For example, do we prevent our kids from participating in expensive activities that all the other kids are into just because the activity is a horrible value (but one we could easily afford?).  Do we still bring $3-5 bottles of wine to neighborhood parties when everyone else brings $20 bottles?  Will neighbors still attend our house parties if we’re the last house on the block sporting an original 1972 kitchen?  It’s probably much ado about nothing, as most of these newly minted neighbors appear to be of the live and let live variety, but one never knows what it’ll be like in another five or ten years.

We’re very fortunate to have the luxury of wealth such that we don’t really care if our house price drops by $50,000 or goes up by $50,000 because it won’t materially impact our daily lives and spending decisions.  We lose more than that in a day sometimes so it’s no biggie.  Instead, we enjoy living in a convenient location that’s close to things we value like a variety of budget shopping and dining choices, parks, schools, libraries, and entertainment options.  When we bought our house, the low price combined with these other features made it the right choice for us.  We liked the neighborhood well enough, warts and all.  Over time it looks like it’s improving from a price appreciation standpoint, and with that comes a change in demographics and socioeconomics.



Have you ever experienced gentrification first hand?  Are you trying to find the next “up and coming” neighborhood before it gets discovered?  How do you do that?



How to Pay for College while Early Retired

One of the top questions I’m asked when people see “retired at 33 with 3 kids” is “yeah, but what about college?”.  The truth is I never really gave it a lot of thought because the total cost is well into the future (though closing in fast for our oldest kid) and not huge relative to our total net worth.  I had a very vague goal of being able to cover the tuition and fees for four years of in-state tuition for all three kids.

We funneled some cash into 529 accounts when North Carolina offered a tax credit for doing so.  We earned a $350 tax credit for contributing $5,000 per year to the 529.  When that tax credit was eliminated, I stopped contributing to the 529s and stopped thinking about college funding.  Paying tens of thousands of dollars for college is no biggie when you have a million or two, right?

It turns out my lazy attitude toward college funding won’t spell disaster for my children’s higher education future.  Between what we have saved in 529s, our large investment portfolio, and a plethora of other funding sources, the kids will be perfectly fine when the college tuition bills start piling up.  You’ll have to read on to find out why I’m so confident (or is it cocky?).


How much does college really cost?

“It works out to just pennies per inspiring moment” reports the University of North Carolina at Chapel Hill’s Cost of Attendance page.  While technically true (it’s about six cents per minute assuming all the minutes are “inspiring”), a better way to look at the cost is dollars per year.  For the 2016-2017 school year, the cost of attendance at UNC is just under $25,000.

Univ. of NC Tuition & Fees $8,834
Room $6,292
Board $4,926
Books & Supplies $1,442
Travel $810
Health Insurance $1,088
Loan Fees $58
Personal $1,448
Total $24,898

Here in Raleigh at North Carolina State University, the total Cost of Attendance is closer to $23,000.  NCSU doesn’t include health insurance (something we would likely provide at near zero cost after subsidy through the Affordable Care Act) which explains $1,000 of the difference in cost (the other $1,000 being meals; Raleigh is cheaper than Chapel Hill I guess).

UNC Chapel Hill and NC State University are two great local options for school where the sticker price is under $100,000 for four years.  We pay for these institutions through our tax dollars and we’re hoping to get a nice return on our tax dollars when our kids attend one of these two flagship research universities (Mrs. RoG and I are alumni of one or both schools.  Go Heels/Pack!).

Breaking down the approximately $24,000 cost of attendance further, we see the actual academics cost around $10,000 between tuition, fees, and books.  The remaining $14,000 covers personal expenses like rent, food, transportation, and beer.  For those living on campus, that’s probably a good number to use since the dorms and meal plans cost what they cost and that’s the bulk of the living expenses.  Off campus living costs vary greatly based on whether you own a car, whether you split a house or apartment, and whether your college crash pad is luxury, slummy, or somewhere in between.

For those students living at home, the cost of college is the $10,000 cost of tuition, fees, and books plus whatever the parents have been spending for the past 18 years.

I don’t know whether my kids will live at home, attend NC State University and commute the 12-15 minutes to school by car or live on/off campus at whatever state school they attend.  With either choice, the total cost for college will be between $10,000 per year plus whatever we already spend on them as part of our $40,000 early retirement budget and $24,000 per year.  

A quick note on college cost inflation.  Yes, tuition increases at a faster rate than overall CPI inflation.  But tuition is less than half of the total cost of attendance at the two schools I’ve mentioned.  The room and board, while subject to inflation, isn’t increasing at such a rapid rate.  For example, when I started college in 1998, tuition at NCSU was $2,364 while it’s $8,880 in 2016.  That’s an average annual 7.6% increase.  Holy smokes!  All other costs of attendance totaled $6,672 in 1998 while it’s $14,159 today, a more modest 4.3% average annual increase.  The total cost of attendance increased 5.3% overall during the past 18 years.  CPI inflation averaged 2.2% during that period of time.  Tuition outpaced inflation by 5.4% per year whereas room and board outpaced inflation by only 2.1% per year, with the overall cost of attendance outpacing inflation by 3.1% per year.

Keep that in mind when you see the headlines that read “college tuition increases at 8% per year on average for the past X years”.  Room and board aren’t going up at nearly the same rate, and if you live and eat off campus, your room and board will probably track CPI very closely (because you’re paying the same prices baked into the CPI that all of us are paying outside the university).  It’s also worth noting that the quality of room and board has increased greatly in the 18 years since I started full time higher education.  We didn’t have tikka masala or sushi in the dining hall for example, and many of the dorms didn’t even have air conditioning back in 1998!  You pay more, you get more.  Or you can eat 6/$1 ramen noodles off campus like all the broke college students did in 1998 (back when it was 8/$1).

Life often throws curve balls, so it’s quite possible our kids will attend some other in state public university (which all cost less than NCSU and UNC), a private U, or an out of state school.  It really depends on what will work best for the kids, and what kind of financial aid a particular university offers.  We are still seven years out from the oldest kid starting college, so for planning purposes I’m focusing on the costs for the two best in-state universities that routinely rank well for great values in public universities.


Nobody pays sticker price for college

Like the MSRP on a new car, the college sticker price is the starting point for negotiations.  If you’re early retired and don’t have a high Adjusted Gross Income or huge assets in taxable brokerage accounts, you’re in luck.  You’ll probably get a nice financial aid award.

The University of North Carolina offers a Net Price Calculator to estimate what kind of financial aid package you’ll receive.

After roughly estimating our numbers and filling out the calculator, the results say we’ll get $4,250 in grant money when one kid is in college.  One year later when our second kid enters college we’ll get $10,250 PER KID.  That’s almost half of the total cost of attendance right there, before we even start talking about other sources of financial assistance offered such as work study or student loans.

Is this an equitable result?  Probably not.  But that is how the system works.  We look poor on paper because they don’t ask about retirement account values and that is where 75% of our net worth resides.  Therefore we get a lot of free money for college.  And this is with us making zero effort to game our assets and income to maximize free grant money!

If those grants work out, we’ll be paying a maximum of $14,000 per kid half the time and $20,000 per kid the other half of the time.


What do we have saved for college?

We invested in 529 accounts for several years to snag some state income tax credits.  The older two kids have $18,000 each in 529s while the youngest kid has $7,000 in his 529.

The older two kids have UTMA accounts at Vanguard with about $2,500 per account.  This is their money but could be used for college, or something like a new (used) car to commute to college if living at home.

The remainder of college expenses will come from our main investment portfolio.  As of mid-September 2016 we have about $1.45 million in the investment portfolio (including the 529 accounts) and another $50,000 cash in a money market account.  I’ve mentally set aside $200,000 (including the 529 account values) to cover college, car purchases, higher teenage expenses, and some adult gifts like house down payments and weddings.

That will leave about $1,250,000 to fund the remainder of our early retirement expenses (which, if we spend $40,000 per year according to our budget, will equate to a 3.2% withdrawal rate).  If our portfolio does well, we will feel more free to spend the $200,000 and then some.  If things don’t go well, we might not part with all of that $200,000 if we need it to cover core living expenses. In a way we’re taking a wait and see approach to deciding exactly how much we’ll pay for college.

Money is fungible and we can move it around all we want.  We’ll likely spend enough on college expenses to deplete the $43,000 in the 529 accounts, so I’m not concerned about paying a 10% penalty to withdraw any balance remaining after they finish college.  But I don’t want to save a significantly higher sum in the 529s because I expect they will obtain college funding from numerous other sources (to be discussed later in this article).


Will the kids help with college expenses?

Yes. And we have talked with them about this starting around age 9 or 10.  Exactly how much they will have to pay is uncertain, although we plan on paying (at a minimum) the tuition and fees (and maybe a lump sum for books) which will total around $40,000 per kid.  That leaves them responsible for room, board, transportation and miscellaneous personal expenses, though some of that would be covered by us if they drive one of our cars and/or live with us.

There’s a strong incentive to save when it’s your money you’re spending and not someone else’s.  There is plenty of moderately priced off campus college housing around NCSU.  With roommates, monthly rent is $250-400 per month plus a share of utilities ($50-75/month per person).  A private bedroom in a shared apartment (with kitchen) rents for 12 months for around $4,000.  In contrast, shared dorm rooms cost around $6,500 per person for the fall and spring semesters (summer session costs extra).

A full year of off campus housing is much less than the price of a shared dorm room on campus for nine months, and would allow the option of a full semester of summer studies for only $3,500 tuition and fees.  Two or three summers of that would lead to graduating college in three years (or less!).  Paying for three years of college is a lot cheaper than paying for four.

The same logic applies to the food budget.  Pay the rack rates for on campus dining plans and it costs $8.61 per meal IF every single meal in the plan is consumed during the school year.  I’m pretty sure my kids can figure out a way to pay less than $8.61 for some fruit, cereal and milk, oatmeal, and yogurt for breakfast.  Rules vary by university, but it appears that NC State University requires first year students living on campus to purchase an overpriced meal plan (“looking out for their best interests” and all that), but beyond the first year students have the choice to skip the meal plan and pay a la carte (or dine off campus as often as possible like everyone did when I went to NCSU).

Having the kids pay part of their own way through college isn’t just a devious way to remove some of those costs from my cash flow statement and lower the overall costs for all parties involved.  There’s also a real benefit to the kids.  They will learn crucial money management skills in a sort-of real world environment with a parental safety net stretched underneath them in case they take a tumble.  It’s better to fail when the stakes are small (calling mom and dad to make up their share of the month’s rent) instead of when they are enormous (calling to say they are $50,000 underwater on their mortgage and will lose their house without help).


Sources of college funding

But it’s cruel, you say, to make kids pay for any of their college when they should be studying hard.  That would be true if they didn’t have nights, weekends, breaks, and a huge 3+ month summer vacation to figure out a way to make a little money.

15 possible sources of funds for the kids:

  1. loans
  2. grants
  3. scholarships
  4. research assistanceships
  5. teaching assistanceships
  6. work study
  7. formal co-op program
  8. internships
  9. ROTC
  10. resident advisor (free housing + meals + living stipend)
  11. on campus jobs during school year
  12. summer jobs between college semesters
  13. jobs during the school year in high school or during HS summer breaks
  14. entrepreneurship
  15. UTMA investment accounts

Parental source of college funds:

  1. 529s (currently have $43,000 total for all 3 kids)
  2. our main early retirement portfolio
  3. doing something productive that pays money (part time job, freelancing, more blogging or consulting, entrepreneurship)

As you can see, the kids have more options for funding college than us parents do.

I wanted to elaborate on a few great ways to cover half or more of the total cost of attendance:

Resident advisor or RA – I strongly considered becoming a resident advisor but decided to move off campus and split a $700 per month apartment between four people for extremely cheap rent instead.  The Resident Advisor lives in a dorm room for free, gets a university meal plan, and receives a small annual cash stipend (currently $1,735 or more at NCSU).  The room, board, and stipend are worth about $12,400 per year at NC State (more at UNC), which is over half the total cost of attendance.  You aren’t supposed to work other jobs while working as an RA because they claim it’s a 20 hour per week work commitment, though in practice many of those hours have you chilling in your room in the evenings for “office hours” while you do your homework (or whatever kids do in college these days).  At 20 hours of “work” per week for a $12,400 benefit, that equates to somewhere between $17 and $20 per hour, almost all of which would be tax free. Becoming an RA is an option after your first year of living in the dorms.

My freshman year resident advisor, George, was an overseas engineering student from Ghana paying his way through undergrad primarily by being a resident advisor plus getting some small grants and scholarships.  I could totally see my oldest daughter being an RA and loving every minute of it!

ROTC – I didn’t have any personal experience with ROTC but it sounds like an incredible opportunity.  I reached out to Doug “Nords” Nordman, a retired nuclear submarine officer who blogs at The Military Guide and an occasional guest poster here at Root of Good.  Doug’s daughter Carol recently graduated from college after completing the Naval ROTC program.  Here’s what Doug had to say:

Every student who’s the least little bit curious about the military should join a ROTC unit just to try the first year for free. At the very minimum they’ll get priority registration (for ROTC classes), lots of new friends with peer tutors, and a summer tour of their career options. Parents will know that their freshmen are getting a good start with plenty of career options.

NROTC paid over $160K of Carol’s tuition, fees, and textbooks at Rice University. She also earned $2K-$5K/year in stipends and summer training pay.

Carol also landed a well paid position as a commissioned officer in the Navy straight out of school.  Doug reports her net worth is significantly higher than her peers even though she’s only a few years out of college.  Sounds like another early retiree in the making!

ROTC provides funding for everything but room and board.  Students can drop out of the program at any time during the first year without penalty and don’t have to repay the ROTC funds (that’s what Doug meant by “free”).  There’s very little risk for joining ROTC for one year.  Starting in the second year of ROTC, the grant recipients are on the hook for repayment of any additional moneys received if they drop out of ROTC.  Alternatively they can enlist in the military later to discharge that debt.


How I funded my college

If you’re a long time reader you won’t be surprised to learn that I managed to finish college on the cheap.  First up was entering the fall semester of my freshman year just a few hours short of being a junior upperclassman.  Through AP credits, taking several courses at the state university during high school, taking several more during the summer after graduating high school, and taking one course through credit by examination, I managed to enter the university as a full time student with 56 credit hours (FYI most bachelor degrees require around 120-132 credit hours to graduate).  With all that credit, I managed to graduate with two bachelors degrees in three years.  And I managed to bum around Mexico for six weeks one summer.

Considering I finished 120th in my high school class, my experience wasn’t atypical for the upper level students at my high school which is the exact same high school that our two daughters will attend in a few more years (one of the reasons I like our public schools here).  So far both kids are academically on track to follow the same general path that I did, therefore entering college as a sophomore with 30+ credit hours is very possible.  If that happens, that’s $48,000 saved (minus costs of AP exams and several thousand dollars for university courses during high school and summer sessions).

Once I was in college, I received some parental help with tuition, books, room and board, and other living expenses the first year (but I couldn’t tell you exactly what my parents paid for the first year).  I also took advantage of the subsidized college loans offered to me.

During my first year of college I landed a position as a DJ at the college radio station.  In addition to being as cool as it sounds, it also paid very well if you took the boring shifts that included running the control board during men’s baseball and women’s basketball games (read: 2-3 hours to do homework punctuated with 2 minutes of work each hour to run station identification reels plus a couple of advertisements).  I didn’t suck at DJ’ing so I got promoted to production manager and became a member of the board of directors where I made $200 per month producing commercials and other on air spots.  Overall, the college radio experience was mostly jamming out to music while doing some homework during my shifts.  And getting paid cash money for the privilege.

By my second year of college I won a number of scholarships that more than paid for all of my expenses (I guess doing all that homework while working at the college radio station helped my grades).  I also started teaching an intro to engineering class for incoming freshmen ($25/hour) and landed an internship in the university’s facilities engineering department ($10/hour).  I quit the facilities department internship when a professor hired me on a research assistanceship ($13/hr) that later morphed into a grant ($3000 for a semester).  These progressively more challenging jobs qualified me for an $18/hr research engineer position during the summer between undergrad and law school.  All these dollar amounts are in the 1998-2001 time frame, so you can inflate them by 40% to arrive at values in 2016 dollars.

During law school I founded my own business that initially didn’t make more than $400-500 for an occasional small job.  Then I made $30,000 profit in five weeks (mostly working 12-16 hours per day).  I wish I had a $99 course explaining the secret to making that much, but it’s really common sense.  I did a great job on the smaller projects which led to my selection for a massive job that included some add on work because my quality was better and my prices were lower than the other team in competition with me.  Skip the $99 course fee, just do good work and profit.  And then there were the summer jobs during law school that paid between $0 and $23/hr.

Overall, I made a ridiculous amount of money by the time I graduated from undergrad and even more by the time I graduated from law school.  For the curious, here’s all 20 jobs I held between being a paper boy at age 12 and retiring as an engineering director at age 33.

In addition to making money and learning how to hustle, all those jobs provided invaluable experience that helped me land a professional job right out of school.

Will my kids find as much employment success as I did during college?  Even if they don’t, they can still make quite a bit of money to help pay for living expenses during college.


Hacking college

A four year degree doesn’t have to take four years, nor does it have to cost $100,000 to $300,000.

For those students that excel academically, they can start college as a sophomore or junior.  Focus on AP classes, credit by examination, summer school before college, and university/community college courses during high school.  If you can’t find resources online, then starting around 8th or 9th grade ask your kid’s guidance counselor what programs are available to earn college credit while still in high school.  I recall getting bored on summer during high school so I grabbed a course catalog from NC State University (pre-internet days, folks), and that’s when I realized they have very specific guidelines on what AP test scores get you, and what basic educational courses I should take to apply toward an engineering degree.

Another classic college hack is to attend community college for two years in a college transfer program.  Then, apply to a four year college and transfer in those two years of community college credits.  This way you only pay for two years of the more expensive university tuition.

I’m a little skeptical of this one after running the numbers.  In our situation, tuition runs $2,768 per year for full time at Wake Technical Community College, a $6,112 cost savings versus NC State University’s $8,880 per year for tuition and fees.  Not too bad but it might be a money losing proposition for students that miss out on financial aid and merit based scholarships (the engineering college at NCSU was awash with scholarship money and often had a hard time finding applicants for all that free money in my experience).  Community college is probably a better bet for students in an academic field with little prospect for discipline specific scholarships or for “average” students that graduate high school without credit for many of the freshman level college courses.

I also worry about how well those two years of community college credit would transfer into some four year degree programs that require very specific coursework (NC State University College of Engineering, I’m looking at you).

Ed Mills of The Millionaire Educator fame has figured out a way to hack a college degree in 12 months from a real, accredited four year institution for just $7,500 in tuition and fees.  It’s a little circuitous and requires discipline to study on your own then pass third party exams to demonstrate competency.  But well worth the effort for someone that needs a bachelor’s degree and doesn’t have a lot of money nor four years to waste.  Mr. Mills hones in on a few universities in the US that allow the bulk of the required credit hours to be taken through various credit by exam options.  You might want to add a second year to your course of study to allow time to actually learn the material that will be on your exams (or what the heck, take the exam and maybe you’ll pass it without studying!).


Other thoughts on college

I still wonder whether college will be relevant in another 10 years.  And at what cost will it remain relevant?  Is it worth a quarter of a million dollars?  Half a million dollars?  If college costs continue their meteoric rise to the moon, at some point we can jump off that vertically asymptotic crazy train by simply skipping the whole college charade and handing our kids a huge portfolio full of investments and let them join us in FIRE at age 18.  Then they can read Chaucer and learn Laplace transformations at a more leisurely pace.

To put the absurdities of growing costs in more stark contrast, there are so many free or extremely cheap educational options available today that continue to grow in quantity and quality.  Harvard, Yale, MIT, and Stanford (among other top tier schools) offer tons of free undergraduate and graduate level courses in every academic field imaginable.  Education is mostly free already, it’s just that diploma – that piece of paper that says you’re educated – that you need to get a job.

There also educational consolidators like Coursera, Udacity, Codecademy, and Khan Academy offering courses from a variety of instructors.  If you have $300 for a laptop and access to an internet connection, it’s hard to stay ignorant if you’re motivated to learn.

Will all this easily accessible free education ever supplant the need for a traditional four year degree?  That’s the $64,000 (or $99,592 at University of North Carolina) question that remains to be answered.  It’ll take a paradigm shift in hiring practices and corporate mindsets away from a strict requirement for a four year degree toward a more fluid skills-based or portfolio based assessment of job applicants.  Or a willingness to accept credentials from a different kind of educational institution.

Perhaps one day smart kids will brag about a set of certificates from Coursera instead of a diploma from Harvard.  That day isn’t today and I don’t know if we’ll see it before oldest two kids graduate college in 10-12 years.  But it’s a valid question to ask as you’re planning on college costs for a newborn today.  18 years might be enough time for an educational revolution.

Jeremy at Go Curry Cracker put a lot of thought into college funding for his newborn.  The most interesting take away from his article was the fact that investing college savings into a stock index fund like the S&P 500 is a smart way to combat escalating college tuition if you start early.  He looked at a 34 year period from 1979 to 2013 and found that

[f]rom 1979, consumer prices increased 3.4x.  Tuition increased 10x.  The S&P500 increased 18x.  And with dividends reinvested, the S&P500 increased 45X!

The stock investment grew 4.5 times as much as the cost of tuition.  Even with a much more mediocre stock market, it’s still a good bet that stock returns will at least keep up with inflation.  That’s why I’m not too worried about the inflation we’ll see between now and 7-8 years from now when my oldest two kids enter college.  Their 529s are invested in an aggressive mix of equities, though I’ll be slowly dialing back on the risk as the looming tuition payments draw near.

image courtesy of Go Curry Cracker


The bottom line

My kids will be able to attend college and somehow we’ll pay for it.  And we can remain early retired.

I see the best case scenario playing out like this:

$24,000 cost of attendance for 3 years – BEST CASE SCENARIO:

  • $4,000 – cut costs on room and board, misc. expenses (live at home with us?)
  • $6,500 – average need based grant (probably free money but maybe some loans)
  • $4,000 – merit based scholarships and grants
  • $6,000 – various jobs and internships
  • $3,500 – spending from our 529 accounts

If this rosy tinted picture plays out, we’ll have three years of spending at $3,500 per year times three students.  Our total outlay will be $31,500 in today’s dollars, and our kids might leave college with a small dose of those dangerous student loans.  That’s about $10,000 less than we have in 529 accounts today, so we are well prepared if this scenario occurs.

But what if my kids end up being “average” and deviating from the path their old man followed?  And what if they can’t or won’t economize on housing and food?

$24,000 cost of attendance for 4 years – WORST CASE SCENARIO:

  • $6,500 – average need based grant (probably free money but maybe some loans)
  • $4,000 – various jobs and internships (they’re average; the earnings are lower than the optimistic scenario)
  • $13,500 – spending from our 529 accounts and investment portfolio

In this scenario, where our kids are very average, can’t economize on costs, get no merit based grants or scholarships and deliver pizzas or bus tables instead of engaging in paid activities related to their field of study, we are left with a $13,500 bill every year.  That means we’ll be paying a combined $162,000 for three kids for four years of study.  That figure exceeds our existing 529 balances by $119,000, so we’ll be digging deep into our investment portfolio to cover the shortfall.  I’ve mentally set aside $200,000 in my portfolio to cover some variation of this worst case college funding scenario plus other big, lumpy one time kid expenses, so we’ll be okay financially.

I suppose I should mention the beyond superlative worse than worst case scenario (though in purely financial terms, the least costly).  There’s a chance that one or more of our kids won’t attend a four year college at all, which means that $3,500 to $13,500 per year spending figure drops close to zero (spending tons of money on adult children is a topic best left for another article).

Whether our kids excel academically and need very little parental financial assistance, or whether we end up paying for the majority of their college costs, we’ve got it covered in our early retirement financial plan.



What is your plan for kids’ college funding?  How did you fund your own college experience?  Anything you would do differently?



One Thousand Days of Early Retirement

1,000 days ago I retired early without really knowing it.  When I walked in the office on the morning of August 26, 2013, I didn’t know it would be my last day of work forever (probably).  I suspected something might happen to me on that Monday because another coworker was suddenly and unexpectedly terminated the previous business day and housecleaning often happens in clusters.

I spent the first hour of that day catching up on emails from the previous week that I missed while I was on vacation in Chicago.  Then I jumped on a quick 9:00 am conference call to discuss the financial model for a new toll road proposed for the southern part of town. Then BOOM! The boss walked in the door with a fistful of bad tidings.

By 10:00 am I had my walking papers in hand along with a cardboard box containing the detritus collected over the course of a few years of office work.  Down the six flights of stairs I walked, the elevator being condemned at the moment by the Department of Labor for excessive safety violations.  Out the back door and to my car I strolled, wondering “what’s next?”.  I found the corporate Ipad in my trunk that HR forgot to ask for, briefly questioned whether they would ever miss it (probably not), then did the right thing and turned it over to my former employer.

Once out the door I messaged Mrs. Root of Good and broke the bad (at the time) news.  I got fired.  Looking back at that email chain, she didn’t seem particularly concerned. Her responses, in chronological order:

  1. “What? Are you kidding?” (getting fake fired would have been a superb prank!)
  2. “Oh well, guess you won’t be getting that interview after all huh?” (I was one of two short listed by the guy that fired me for an internal promotion)
  3. “Are you picking the kids up from school since you’re free?” (of course I had plenty of free time!)
  4. “Ok.  Well, time to collect unemployment and look for a new job.” (done with respect to unemployment and done but to no avail with respect to a new job)

That’s what the household discussions sound like when you’re FI, live on less than one income, and you get fired unexpectedly.

That afternoon I started checking The Plan – our two page outline of our early retirement financial plan.  After a summary review, I quickly realized we were FI enough that I didn’t have to go back to work (though I did make an effort to find a new job pursuant to our state’s rules on collecting unemployment benefits).

Before the sun set on that fateful Monday in August I decided I was early retired (unless a job offer I couldn’t refuse walked in the door).  Mrs. Root of Good began making plans to leave her job too.  In early September I started Root of Good since I had always wanted to “do something online and computer-y” for many years but never had time between a full time job, kids, computer games, and a hectic TV-watching schedule.

Stop and smell the roses

Stop and smell the roses

In the early days, there was still some nagging uncertainty about the whole early retirement thing.  Would it really work out okay financially?  Can a 33 year old really get by in this world without a job (hint: having a million bucks helps a lot!)?  That doubt and uncertainty is 99.9% gone today (the remaining 0.1% represents my Plan E or F – go back to full time work).

Mrs. Root of Good initially decided to stick around to take a three month paid sabbatical the following summer and pick up a raise and bonus in the meantime.  The three months paid time off didn’t happen in 2014 but she did receive five weeks paid time off and a promise that she could take the whole three month paid sabbatical the following summer in 2015.  And so began the limbo period of Mrs. Root of Good’s pre-retirement career.  Work a little longer, get a raise and bonus.  Work just a bit more than that and get a month or three paid time off.

After completing the three month’s paid time off in 2015, Mrs. Root of Good finally submitted her resignation.  She didn’t escape from limbo though.  Her employer cajoled her into staying by offering a flexible work schedule consisting of what turned out to be mostly 24-30 hours per week working from home for full time pay.  After milking that sweet set up for six months, Mrs. Root of Good finally quit for real (for really real this time!) in February of 2016.  As I celebrate my 1,000th day of early retirement, she celebrates her 107th day.  Yes, I quit working 893 days before her, but I think after all her paid maternity leave, sabbaticals, and flexible working schedule we are roughly even on the “lifetime total days worked” metric.

Mrs. Root of Good's new hobby - photography

Mrs. Root of Good’s new hobby – photography



What Early Retirement means to me

These first 1,000 days have been amazing.  Looking back at some of my old posts outlining what I was up to in the early days of early retirement, it’s clear how much fun I was having from day one.  It’s also been a very busy period of life, and not only because of our three kids.

In The Early Retiree’s Weekly Schedule I outlined what I’m up to in a generic, average week:


One year after publishing that article, I haven’t really deviated from the bones of the schedule other than I seem to be busier volunteering at the kids’ school and spending more time on our now-four year old and his busy schedule and less time blogging (sorry, readers; life happened 🙂 ).

Staying busy volunteering at the kids' school

Staying busy volunteering at the kids’ school

When I do the occasional media interview, I usually get asked “what’s it like to be retired early?”.  I stumble and pause and then start listing off the rather mundane things I have on my weekly schedule.  Then close the answer with something like “basically everything that working folks do on the weekends except my weekend lasts seven days”.  I don’t intend to gloat or brag, but rather to be as descriptive as possible because early retirement on a regular day is very similar to the weekend while working.

Not sure where to categorize this on my schedule. Work/chores? Kid time? Fun?

Not sure where to categorize this on my schedule. Work/chores? Kid time? Fun?

And then there are the multi-week vacations made possible by early retirement.

In 2014 we spent two and a half weeks on a road trip to Canada:

During the summer of 2015 we spent seven weeks in Mexico:



This summer we will pack up our new (to us) minivan and head out on a 3.5 week trip west to Kentucky and Tennessee, then north to Detroit and Toronto before returning home through Niagara Falls and Washington, D.C.

Watching the kids grow up and being at home the whole time is the biggest change since retirement.  When I retired the kids were 1, 7, and 8 years old.  Now they are 4, 9, and 11.  Each one of them has grown and matured significantly in the almost three years since I quit working.  The passing of time is particularly visible with our four year old.  When I quit working he was a baby turning into a toddler.  Now he’s running around, riding a bike, surfing the web to Netflix (he knows how to type “N-E-T-enter” in the browser bar), and being generally autonomous all day.

Oatmeal. Breakfast of champions

Oatmeal. Breakfast of champions

Hiking at the local city park

Hiking at the local city park



When I retired in August of 2013 our net worth was around $1,250,000.  Net worth continued to climb for the next 18 months before plateauing just above $1,500,000 for the past year.  Part of the early rise in NW came from Mrs. RoG’s income and part came from increases in the stock market.  My unexpected income from this blog also contributed a small share to the net worth growth.

We tracked spending very carefully and only spent $34,000 in 2014 and $24,000 in 2015.  Not bad considering we completed a major exterior renovation project in 2014 that included all new vinyl siding, new windows, and a major roof repair.  We also took multiple international vacations each year.

Crafting a spicy chipotle alfredo sauce. Great way to keep food costs low while still enjoying good grub.

Crafting a spicy chipotle alfredo sauce. Great way to keep food costs low while still enjoying good grub.

Since our net worth increased over the past few years, we decided to try to spend more money.  The long term goal is to spend around 4% of our portfolio value each year (the “4% rule”).  After reducing our $1.5 million net worth by our home value ($150,000) and another $200,000 to cover lumpy kid costs (braces, teenager auto insurance and other added car costs, college, miscellaneous kid launching costs) and other lump sums, we have slightly more than a million dollars left in our portfolio.  Four percent of a million dollars equals spending $40,000 per year if we follow the 4% rule.  That’s exactly what we budgeted for 2016.  The biggest budget additions for 2016 are entertainment and travel spending.  However, if the past few years’ expenses are any indication, we’ll probably spend closer to 3% of our portfolio.

Spending $0 while enjoying a campfire by the lake in the backyard

Spending $0 while enjoying a campfire by the lake in the backyard

Part of our low spending strategy (particularly on travel) centers around travel hacking and credit card rewards.  On our 2015 trip to Mexico, for example, we scored free round trip tickets to Mexico for our family of five simply by signing up for two credit cards (the British Airways card and the Southwest Airlines card, both from Chase).  This year we earned a free week of apartment rental in Toronto and half off a week long Caribbean cruise by signing up for his and hers Barclay Arrival Cards.

We recently sorted out our health insurance situation after Mrs. RoG quit her job a few months ago with the final piece of coverage falling into place in the past few weeks.  The Affordable Care Act played a huge role in keeping our monthly premiums extremely low.  $125 per month is low, right?

I’ve written before why I don’t think we’ll ever run out of money in early retirement and I’m more certain of that today than I was two and a half years ago when I first published that article.  Flexibility is a big key to our security since we have to rely on our investment portfolio for the next several decades before Social Security starts.

Since more than half of our financial assets are held in tax deferred savings accounts like 401k’s and traditional IRA’s, the Roth IRA Conversion Ladder is our magical tool to avoid penalties for withdrawals made before age 59.5.



Who has time for that nonsense?

We are having a blast.  Stress is minimal.  I can always go back to work if I want.  We are financially well off and want for nothing.

We are able to travel the world subject to the constraints that come from having two, and soon to be three, children in traditional public schools.

School rocks!

School rocks when you get to play with circuits!

Every day is busy, but not like it was when working.  We choose the activities we participate in and don’t have a problem saying “no thanks” to things we don’t enjoy.

With plenty of autonomy, freedom, and flexibility, what is there to regret?  I can imagine a far-fetched scenario in 20 or 30 years where we realize we don’t have quite enough money and have to go back to work part time or full time.  I doubt that I would regret enjoying the couple of decades between now and then.  It would be like working till a traditional retirement age with a multi-decade sabbatical tossed in the middle of my career.  I’ll take that!

One of the many moments when I don't regret retiring early at all!

One of the many moments when I don’t regret retiring early at all!


Looking forward

A more likely reason I would return to paid employment of some kind is boredom.  I can’t foresee it happening, but the future is hard to predict.  I know I’ll have a lot more free time on my hands in another 15 years once our youngest kid is out of high school.  If travel, TV, games, books, and the outdoors don’t keep us busy, maybe I’ll find something productive that also pays.

A friend and former coworker contacted me recently to offer as much work as I wanted with a flexible schedule and 50% more compensation than I used to earn when working full time.  I gave the opportunity a lot of consideration since it would involve working with someone I enjoyed working with in the past and the work itself was engineering consulting for design and construction of our county’s public schools (sort of like volunteering while getting paid six figures).

My answer was that I was having too much fun and wouldn’t be able to fit in the work, even ten or twenty hours per week.  The weather was too nice in the spring and we’re going on vacation for almost a month this summer.  Maybe in another year when our youngest is in kindergarten?  It’s nice to have options and not need to work.

When hanging out with friends, does anyone say "I wish I was working?"

When hanging out with friends, does anyone say “I wish I was working?”

We have thought of retiring abroad but aren’t committed to the lifestyle enough to live overseas full time.  The biggest impediment is the kids’ education because we have some really great free public schools not far from our house in Raleigh.  Perhaps someday the travel bug will bite us hard enough and the resulting infection will make us crazy enough to sell or rent out everything and hop on the next plane south (or east or west or north).

Once again we find ourselves at a crossroads where all directions lead to happiness.  It’s great to have options.



How close are you to early or traditional retirement (or are you already there)?  How do you see your life changing once you enter retirement?  



April 2016 Financial Update

Now that April is over, we are one third of the way through 2016.  How are we doing?  Where are we going from here?

Financially, April was a great month on all fronts.  Our net worth increased by $23,000 to $1,552,000.  Our income remained strong at $2,471 even though it’s been a few months since we received any pay checks from employers.  Our spending dropped significantly compared to last month to $1,829 (not buying a new minivan certainly helped keep expenses low).

On the personal side, April was an incredibly busy month.  The weather was nice so we spent a lot of time outdoors.  We were busy with kids’ school events and volunteering, hanging out with friends, and enjoying the wonderful life we have built through a decade of financial butt kicking.  We capped off the month with a day trip to the beach for a wedding.

On to the numbers!



After receiving $4,476 in dividend income in March, our investment income dropped to just $130 during April. Since our portfolio is all funds and ETFs that pay dividends quarterly or annually, the months of March, June, September, and December are big for dividends.  As this post goes live, we’re about six weeks from the start of the next dividend season in June.  In 2015 we earned a total of $28,527 in dividend income.

Blog income, shown as “other income” in the chart, was fairly normal at $2,043.  My early retirement lifestyle consulting brought in $180 in April (same as March).  I’m still aiming to live off of four percent of our portfolio, and treating the blog and consulting income as purely discretionary money that we can spend if we want (or save if we want).  The next month or two should be very good months for blog income thanks to a lot of recent attention in the media (part of what kept me busy during April!).

TV talking head - my new career?

TV talking head – my new career?

Deposit income of $117 includes $87 of ebay and craigslist sales plus $30 of cash back rebates from the and online shopping portals. I’m all about sharing the wealth, so if you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  I try to do all of my online shopping through one of these portals and the cash back adds up fast.  I’m not sure when I’ll actually get the cash but my Ebates account was just credited with over $100 in cash back from our January 2016 cruise I booked through Expedia (via Ebates).  Very nice and worth the wait!


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).



Now let’s look at April expenses:


Monthly spending in April totaled much less than our budget of $3,333 per month (or $40,000 per year).  We didn’t buy a minivan and we didn’t have any large annual bills like property tax or insurance, so it was easy to come in well under budget for the month.

Grocery spending dropped back to a more normal $428 during April.  I thought this would be a lot higher given how well we ate and how much we shopped for groceries during the month.  I guess I’ll have to thank Aldi, Trader Joe’s, Kroger, Walmart, Food Lion, the Asian store, and the Mexican grocery store for keeping their prices low.

Spend little on groceries; make awesome food like homemade tamales? Yes, please.

Spend little on groceries; make awesome food like homemade tamales with fresh guacamole tomatillo salsa? Yes, please.

Healthcare spending increased significantly to $270.  Since we no longer have dental insurance, Mrs. Root of Good paid $105 for her routine dental visit (the cash rate for uninsured patients at our dentist).  We finally got to use our new health insurance when Mrs. RoG visited the doc to have a lump on her arm checked out.  It was diagnosed as likely being a lipoma (a lump of fat, and please note, NOT lymphoma or anything like it fortunately!).  The doc scheduled her for minor outpatient surgery the next day.  The biopsy revealed it was, in fact, just a lump of fatty tissue and totally benign.  Our insurance is working out well so far with two $20 copays paid at the time of service plus another $120 bill for the surgery (20% of the $700 price the insurance allowed for the surgery).

Health insurance premiums totaled $125 for our very impressive gold plated silver plan obtained through with some very sizable ACA subsidies.  Quick update on our health insurance situation: four of us obtained insurance through the exchange very quickly.  We had to apply to the state’s medicaid/NC Health Choice program for our three year old (now four year old).  We’re currently on day 87 of waiting for our application to be approved so our four year old has been uninsured since May 1 (during March and April we had the possibility of retroactive COBRA coverage for the little dude but that option expired April 30).  He will have retroactive coverage if his NC Health Choice application is ultimately approved (which it should be).  The wheels of bureaucracy move.  Slowly.  Let’s hope they finish processing the application before he’s five.  And I think the State of North Carolina is distracted with other important issues these days, so I understand the delay.

Good thing we don’t pay state tax to fund the agency processing his paperwork.  Except we do!  Since we don’t have any tax withheld from a paycheck, we now have to make estimated tax payments.  I made the first estimated quarterly tax payment of $225 for state taxes.  We can pay online and we can even pay with a credit card for a 2% fee.  Good to know if I need to meet minimum spending requirements for my credit card travel hacking hustle!

Clothing and shoe purchases totaled $200 for the month.  Everyone but me got new shoes and the ladies got new swimsuits.  We also did a bit of thrift shopping.

Utility spending of $167 includes the water/sewer/trash and the natural gas bill.

Restaurant spending of $103 included some horribly unhealthy but delicious donuts, Chinese take out, and a fun lunch out with an old friend.  However, the bulk of the restaurant spending in April was for a meal at the restaurant where the beach wedding reception was held ($62 for okay but not great food).  We had to pay for our own meal but (1) we can afford it and (2) at least the bride and groom didn’t have to pay tens of thousands of dollars for their wedding.  Nicely done newly married couple!


Delicious. $17 for 13 of the most mouth-watering treats that aren’t Mexican food. Courtesy of Baker’s Dozen Donuts in Cary and now in Raleigh. And a Cambodian-owned business so we’re supporting Mrs. RoG’s people.

The $69 electronics purchase was an ASUS RT-N66W router.  We tried to go cheap on a router last month and it didn’t have the range that we needed to cover the whole house.  Lesson learned and $15 wasted (but we have a backup router just in case).

The uncategorized expense of $67 was mostly the purchase of our new couch at a thrift shop benefiting the homeless.  The curb sleepers of Raleigh get some of our cash to keep them off the street and we got a new couch.  Now to craigslist the old couch for more than we paid for the new(er) couch.  We also found some other ridiculous items like a brand new pair of shorts from Jos A Banks with tag still on for $3.  The only reason this expense was uncategorized is that Personal Capital couldn’t categorize the purchase correctly since it’s the first time we’ve shopped at this particular thrift store.  After I update it, it’ll be in the system correctly for good and subsequent purchases from this retailer will appear correctly too.

The minivan needed a few final touches before getting it road ready for our summer trip.  I spent $16 on some fancy windshield wiper blades at Walmart (they were on clearance) and $42 for tire rebalancing.  The tech said the wheels were way out of balance. The vibrations observed at mid to high speeds disappeared immediately after the rebalancing.  So far so good on the used car purchase.

The entertainment expense of $48 was a brand new camera lens for Mrs. RoG’s photography addiction.  I debated whether to put this in entertainment or electronics because it’s really both.

Not shown in the expense graphic because of their small dollar values were:

  • gifts – $45
  • gasoline – $40 (mostly the trip to the beach at 23 miles per gallon in our minivan with 7 passengers)
  • internet – $31
  • service charges/fees – $26 (Mrs. RoG’s 401k – I’ll have to follow these closely to see how much they total per year)

That’s a lot of consumption but we still spent at a level 30% below the poverty line.  Maybe we’ll throw in some cigarettes, alcohol, bail bonds, flashy rims, and lottery tickets to bootstrap our way up to the lofty heights of poverty level living next month (no offense to my distant kinfolk if you guys are reading this month’s edition of Lifestyles of the Rich and Boring).

Giving the little guy a taste of stardom.

Giving the little guy a taste of stardom.


Year to Date Living Expenses


At $17,065 year to date spending, we have exceeded the $13,333 budgeted for the first four months of the year by a few thousand dollars.  This includes the minivan purchase in March, so if we keep under spending our monthly $3,333 budget (like we do many months) then we’ll be back on track in a few more months.

I just received the annual or semi-annual bills for about $1,000 for home, auto, and umbrella insurance policies.  July and August should be fairly low cost months too since we’ll be traveling for half of each month on a road trip through the US and Canada and have already paid for all of our vacation lodging expenses.

Our goal this year was to spend more than the $24,000 we spent last year, and so far we are on track spend a bit more than that paltry figure.  Regardless of whether we spend the whole $40,000 budgeted for 2016, we are having a good time, enjoying life, and doing the things we want to do in early retirement.  And that’s what matters the most, right?

Monthly Expense Summary:

Living like a pauper is tough but somebody's gotta do it. And do it well.

Living like a pauper is tough but somebody’s gotta do it. And do it well.

Net Worth: $1,552,000 (+$23,000)

Another month of net worth growth!  Yippee!  We are within $40,000 of our all time high net worth reached in 2015.

The net worth is just a number to me.  I don’t really get excited when I see a $23,000 increase in one month because I know the net worth figure will fluctuate by a five figure amount almost every month.  That’s just the nature of the stock market and there’s very little one can do when investing most of one’s portfolio in equities.

If volatility concerned me, I would shift into more stable asset classes like bonds and cash.  But it doesn’t so a high equities allocation is fine with me.


Every month we are growing more and more comfortable with our early retirement finances.  Toward the end of 2015 and beginning of 2016, we watched our investment portfolio drop almost $200,000 over a three month period.  A few months later, we have recovered all those losses and even gained a small amount.

What will the future hold?  If by future you mean the rest of 2016, I have no clue other than it will go up and it will go down.  In 2025 or 2030, I expect markets will be up.  Let’s check back in at that point and compare notes.

In the meantime, I’m ignoring the daily market vacillations.  I’m planning on enjoying a beautiful May in North Carolina (one of our best months weather-wise) and ease our way into summer when we depart for our road trip up north in mid-July.




And you? How was your April?  Enjoying the rising stock market?  Gearing up for summertime fun?  



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Mrs. Root of Good Jumps Into Early Retirement!

I’m looking over her shoulder at 4:30 pm on a Thursday while sitting in our home office.  A quick last check of her emails.  A moment’s hesitation.  Is this really it?  A click on the X in the upper right corner of the screen.  Fade to black.

Ten years of work culminating in that final click on the X in the corner.  One chapter of Mrs. Root of Good’s life is over.  Turning the page to a new chapter, she finds the rest of the script unwritten.  Her biggest worry becomes the emptiness of all that white space spread in front of her.

For over a month, it’s been a done deal but I’ve kept it a secret. Unlike the last time she resigned, no negotiation this time around.  She said in her resignation letter it was time to move on.  She is now officially free from the 9 to 5 work schedule.


It was not easy to call it quits.  Her job provided great pay, flexible work hours, work from home, great benefits for the family, and great retirement benefits.  It would be tough to find a similar position even in the same company.  However, she chose freedom and family over helping other people in the corporate world.

It was tough to overcome the brainwashing of having to be useful to society by continuing to work.  What good are you if you’re not contributing to society especially if you are able bodied?  Her thoughts floated around.  What is the goal in life?  Doesn’t everyone strive to be happy?  We work so we can earn money so that we can be financially stable, live life, and be happy.   We work so we can be useful members of society.

She earned enough money to live the life she wants which makes her happy.  To continue to work would be greedy.  Hey, she’s leaving a great position to allow another person to live their dream.  She contributes to society by spending more time to help raise her kids to be good people.  Our kids are our future.


Lady Liberty sheds a tear

Mrs. RoG is living her dream.  Through luck and her parents’ hard work, she arrived to a land of opportunity.  Hers is a true story of rags to riches.  Just like me, she was not raised in a well to do family but quite the opposite.  Her family lived as war refugees in Thailand for over nine years before coming to America.  Mrs. RoG was almost seven years old when she first arrived to the land of opportunity.  Her family arrived with nothing but the clothes on their backs.  Her mom could not read or write with only a third grade education.  Her dad also had an elementary school education but could at least read and write at a basic level (but not in English).


Refugee camp, jungles of Thailand. Mrs. Root of Good, age 5.

Mrs. RoG entered the US not knowing any English.  Unlike her former jungle home in the refugee camp, school was mandatory and free in the US.  However, school field trips were not free and she forwent some trips as she knew her parents did not have the extra cash.  She didn’t even ask them to pay for the trips.  At an early age, she was self-aware that money doesn’t grow on trees and one must be smart with money.

She worked part time jobs through eleventh and twelfth grade.  To continue into higher education, she borrowed money as her parents did not have the money to pay for her college.  At the time, she didn’t know the true benefits of getting a college education, she just knew she had to go to college and luckily she did.  This college degree would open the door to jobs at PricewaterhouseCoopers and her last job at an investment bank.

Through some luck but mainly hard work, she earned enough money to live off and save for the future.  Her goal was not working 40+ hours a week away from home until she is in her sixties and then only have a few years left to enjoy life.  Her goal was to work hard, save money, have a family and spend quality time with the family.

Well done.

Her story isn’t any more noteworthy than the success stories of millions of other immigrants and refugees that landed on our shores over the past several centuries and discovered a country that offers unbounded opportunity to eager newcomers.  In today’s media morass, the groupthink says the American Dream is dead and there’s no point to take responsibility for one’s own future when so many forces conspire to keep the poor and middle class indebted and enchained in servitude.  Mrs. Root of Good disagrees.


What next?

Mrs. RoG is entering her second week of early retirement and enjoying the experience immensely so far.  She’s focusing on relaxing and decompressing during the first few weeks of early retirement.

So far she sleeps in, enjoys leisurely walks in the afternoons, and reads books.  We went swimming one morning during the work week and found the pool completely deserted.  Right before finishing lap #15, a sudden smile sneaked across my face as I realized this is how our life will be forever.  Swimming in the middle of the day just because we want to.

Benefits of early retirement: private olympic size swimming pool at 10:30 am on a Thursday.

Benefits of early retirement: completely empty private olympic size swimming pool at 10:30 am on a Thursday.

I imagine she will loosely follow my own early retirement weekly schedule with healthy doses of leisure and recreation tempered by small bits of work and chores.  She’s been working so little the past few months that early retirement doesn’t look drastically different than her recent experience working “full” time.

In our 2016 budget, I increased the entertainment/fun budget and the travel budget significantly.  Time will tell whether we actually spend more money traveling and having fun, because so many fun activities are cheap or free.

Last night, we spent about an hour looking over summer travel plans and mapped out a 2,000 mile trip from North Carolina through Tennessee and Kentucky, north through Ohio toward Niagara Falls and Toronto, then returning home through Washington DC.  Depending on how long we stop in each place, the trip might be as short as two weeks, or as long as five weeks (or more!).  We are also contemplating taking a break by staying at home the whole summer (a “vacation from vacationing”).  We are rich with ideas and travel funds but flat broke when it comes to commitment.

I just sold my trusty sixteen year old low mileage Honda Civic to someone I know through the Mr. Money Mustache forums.  That’s the answer to “should our family drop from two cars to one?”  The car ran perfectly fine for a sixteen year old car, but we simply didn’t need two cars.  Getting my above Kelly Blue Book asking price out of the car persuaded me that now is as good a time as any to make the sale and get us to the correct number of vehicles to match our lifestyle right now.

Over the coming months, we hope to purchase a larger car like a minivan so that our road trips will be more luxurious.  A seven or eight seater will also come in handy when hauling around the five of us plus a few friends.  The primary purpose of the new(er) vehicle is recreation, so we aren’t overly concerned about gas mileage since we won’t be putting a lot of miles on it commuting to work every day.

In her first year of early retirement, Mrs. Root of Good looks forward to:

  • reading more books,
  • working on reading, writing, and math/numeracy with our three year old, and
  • learning about photography so she can operate our new Canon t5i DSLR camera


Beyond that, we are both looking forward to a lot of relaxation time with the family in the next few months.



How do you envision your first few months of retirement?



Book Review and Interview – Job Free: Four Ways to Quit the Rat Race

I recently had the opportunity to chat with Jake Desyllas, another very early retiree.  Jake hosts The Voluntary Life, a podcast about entrepreneurship, financial independence, and freedom. In 2000, he founded Intelligent Space, an award-winning consultancy in the UK, that led innovation in the field of pedestrian movement simulation and analysis. In 2007 he sold his business and in 2010 he retired early, at the age of 38. He is the author of Becoming an Entrepreneur and his new book is called Job Free.

Since achieving financial independence, his adventures have included becoming a perpetual traveller, going minimalist, playing in a band, writing books, and creating a podcast. He currently lives in Panama with his wife Hannah.


You just released your new book Job Free: Four Ways to Quit the Rat Race and Achieve Financial Freedom on Your Terms.  What’s it all about?

It’s a book demonstrating that a job-free life is possible and there are multiple ways to achieve it. I’ve interviewed many people who live free of jobs and presented their real-life stories in the book, along with my own journey to financial independence and early retirement. The book provides a framework to help understand the options for living job free.

There are four basic strategies to escape the rat race of jobs. I call these strategies extreme saving, unjobbing, lifestyle businesses, and startups. By reading the book, people can choose which of these strategies (or combination of strategies) is right for them.


Is becoming job free the same thing as reaching financial independence and retiring early (reaching FIRE)?

That’s a great question. They are not quite the same—job freedom is a broader concept than financial independence and retiring early (FIRE). FIRE is a great way to live a job-free life, but it is not the only way. I think it is helpful to consider why you want FIRE. Most people want it because they want more freedom in life. They especially want to be free of the dreary, unfulfilling obligations of their jobs. For example, they don’t like having a boss, having to show up at set times, having to commute, having to wear a suit, having to follow someone else’s vision and not their own, and so on.

One way to free yourself from these dreary obligations is to save for FIRE, and I cover this strategy in a chapter called “extreme saving.” But there are other ways to free yourself of bosses, commuting, and all the other crappy aspects of jobs. For example, you can start a lifestyle business and be your own boss, so you never have to answer to a boss again. Or you can found a startup and build the company of your dreams. You don’t have to spend your working life building someone else’s dream. There are ways to achieve great freedom in life without FIRE. And many job-free lifestyles can lead to FIRE in the end too, as mine did.


What led you to write Job Free?

The idea came from interviewing fascinating people on my podcast about how to get more financial freedom in your life. I’ve interviewed many people (including Mr. Root of Good himself) who achieved FIRE in different ways to me. I’ve also interviewed people who are not fully financially independent, but have achieved job-free lifestyles that give them the freedom that they want. I noticed that although these stories were very diverse, they could all be understood within a framework of four essential strategies.

I wanted to explain these four strategies using the stories of the people that I’ve interviewed, to show that it is possible to live job free and there are options for how to do it. Many books about lifestyle design convey the message, “my life is awesome and you should live like me.”  I’m not advocating for one particular lifestyle; I am explaining the available options and encouraging readers to choose the life that’s right for them.


Who would benefit most from reading Job Free?

The book will be most helpful to those at the beginning of their journey to job freedom, because it provides an overview of the entire journey ahead and all the options available. However, readers who already know a lot about one strategy for quitting the rat race can also gain a lot from understanding the alternative strategies.

I’ve found that there is not much crossover between different communities interested in job freedom. For example, there isn’t much overlap between the extreme saving community and the startup entrepreneurship community. Yet, I think they each have a lot to gain from learning about the other. I hope my book encourages crossover learning between different job-free communities. Although these lifestyles might look different, they share many goals.


When did you first decide that becoming job free was a main goal in your life?

When I was a teenager, I was lucky to meet a mentor who had the explicit plan to start his own business, reach financial independence, and retire early. I learned a huge amount from watching him successfully implement his plan, and from seeing how he changed (I tell his story in Job Free). His example inspired me to create a job-free life for myself. I did a PhD, and as soon as I had finished studying, I started my own business. Eventually I sold it and retired early. I’ve spent very little time as an employee.


What are the biggest hurdles encountered while trying to escape the need for a job?

There are many practical challenges when it comes to replacing the income from a job. However, I have found that the really difficult hurdles are the psychological challenges that face anyone who wants to live job free. For example, job-free lifestyles require you to take a far more active role in creating a community and support network for yourself. Secondly, you have the challenge of creating structure for your life outside the structure of a job. Lastly, the most important psychological challenge is in finding your own clear sense of purpose that can replace the default purpose that you got from a job. Many of the topics that I cover in my podcast are directly related to these psychological challenges, since they are issues that I faced myself.


What are some of the other most important books those seeking a job free life should be reading?

I think Root of Good readers will already be familiar with many of the good books on the extreme saving approach, like Your Money Or Your Life by Joe Dominguez. I recommend exploring some books about other job-free lifestyles. If you want to find out about unjobbing, the best introduction is Michael Fogler’s original book, Un-Jobbing.

If you are interested in lifestyle businesses, I recommend starting with The 4-Hour Workweek by Tim Ferriss, because it is still the most influential book about this approach. You may also enjoy Pat Flynn’s short book, Let Go, for a personal story of his journey into this kind of business.

If you are interested in founding a startup, then my own book, Becoming an Entrepreneur, provides an overview for beginners, and contains many suggestions for further reading on specific topics. Derek Sivers’s book, Anything You Want, is a fascinating personal account of his experience of selling a business.


Root of Good’s thoughts on Job Free

Jake provided me with a free electronic copy of the book for review and I liked it enough to share Job Free with all of my Root of Good readers.  In Job Free, Jake does a superb job of conveying the multiple paths to ditching a traditional job, some of which lead to financial independence and some that are essentially lifestyle design on steroids.  All four paths lead to the same objective – removing the necessity of a regular nine to five job.

The chapter most interesting to me was the chapter on Extreme Savers because it presents the path that I took to reach financial independence.  Get a decent job, save and invest half or more of your income while keeping investment costs and taxes low.  When you have enough to cover your annual expenses with a 3% to 4% annual withdrawal, then you are Job Free.

In the chapter on Extreme Savers Jake shares what he learned from interviewing or researching a number of early retirees that you probably recognize:

In the Extreme Savers chapter, Jake also references Thomas Stanley’s The Millionaire Next Door where Dr. Stanley presents the patterns and commonalities observed after conducting hundreds of interviews of millionaires across the US.  In Job Free, Jake follows a similar methodology as Dr. Stanley by compiling a summary of how numerous Extreme Savers under age 40 managed to save and invest their way to financial independence.

Job Free presents three more in-depth chapters on other ways to escape a regular job through unjobbing, lifestyle businesses, or founding a startup.  Plenty of people balk at the idea of becoming an extreme saver, but might have no problem with one of the other three paths that involve pursuing a fun career at lower pay, developing a business that caters to one’s desired lifestyle, or in the case of founding a startup, growing a company and selling it for a large sum of money.

Jake draws on his practical experience as an entrepreneur and startup guy and on his interviews with dozens of others who have attained freedom from a job in different ways.

So far, I’ve had the opportunity to chat with Jake during two podcast interviews at The Voluntary Life and even though his intent was to glean some wisdom from me for his listeners, I have to admit that there was some information exchange going on in both directions.  Jake is one of those guys that truly gets what it means to design your life so you can live in an intentional manner.  His latest book, Job Free, is a great nugget of his wisdom.



Do you have any questions or comments for Jake?  



The Deception of a Billion Dollar Jackpot

I get it.  It sucks you in.  Dreaming of all the ways you would spend a sudden windfall.  The lottery is this amazing chance to live on easy street for the millions that play it every week.  It’s literally a ticket to a better life.  Where else but the Powerball lottery can you invest $2 and turn it into $1.3 billion dollars overnight?

When you come forward, your name is public in most states.  I hope you enjoy being a very popular third cousin once removed to everyone and their brother.  And hey, if you do win, can I borrow some money because I’ve got a really great business idea and I’m willing to let you in as a partner on the ground floor?  I’ll pay you back, I promise.

Let’s visit Jack Whittaker to see how the $315 million he won in 2002 changed his life.  Spoiler alert: it wasn’t for the better.  After winning an absurd amount of money, poor Jack was robbed a dozen times, got divorced, and, at 68, is currently back at work running two businesses that “aren’t doing very good”.  It might be because he spends $600 per week trying to win the lottery again.  Because it worked out so well the first time!

Poor Jack joins hands with his fellow “winners” like these ten people and these nineteen people who won big then lost it all.

Playing the lottery is dangerous, even deadly.  And not just because you’ll get jumped by a gang of ruffians like Poor Jack.  Your odds of dying while driving to the gas station are higher than winning the lottery.

Let me drop some Math on you.  The odds of winning the Powerball jackpot are 1 in 292 million.  Given the national average fatality rate of 1 death per 100 million miles driven, a four mile round trip to the gas station equates to a 1 in 25 million risk of dying in an auto accident.  For a freaking lottery ticket.  The odds are stacked against you.  You are 12 times more likely to die in a car crash while getting the ticket as you are to pick all six Powerball numbers.

Skip the lottery, save $2, save your life.

Even if we get past all the objections to buying a ticket, I ask “what’s different now?”  Is $1.3 billion materially different from $130 million or $13 billion?  Any of those jackpots would put virtually anyone into an entirely different category of wealth compared to where they are today.  Why do we chase a billion so much harder than a measly hundred million?  You would be fabulously filthy rich either way, so why try so hard for the billion?

Maybe it’s because a mere $100 million isn’t such a great jackpot after all, and it takes a billion dollar jackpot to entice us all off our couches and into our (deadly) cars to buy these $2 luck rockets.  I’m talking about the haircut from taking a lump sum and the huge tax bill.

You’ll lose 38% of the pot by taking a lump sum.  Then lose another 40-50% of what’s left when Uncle Sam realizes he, too, has won the lottery.  You’re going straight to the top of the 39.6% federal tax bracket and depending on your state and local taxes, you could face another 10%+ tax burden.  What you are left with is between 31% and 37% of the “jackpot”.  For the current $1.3 billion jackpot, that’s “only” four or five hundred million dollars.  A $100 million jackpot would only leave you with $31 to $37 million.

$31 million is a lot of money, but it’s not going to get you to Filthy Richville.  You couldn’t afford to buy and maintain a private jet with such a small pittance.  You’ll be stuck in first class sipping expensive champagne with all the other decamillionaires.  On a (non-private) public jet.  With Poor Jack Whittaker giving you the stink eye from his middle seat in coach while he contemptuously sips his room temperature can of ginger ale.

Of course, you might not even get $31 million because of the pari-mutuel nature of the lottery.  In pari-mutuel betting, all jackpot winners share the pot.  If anyone else picks “your” lucky numbers, get ready to split the pot with them.  Is $15.1 or $10.3 million still a “jackpot”?  You might be back in coach sharing that flat ginger ale with Poor Jack.

Between taxes, discounting for taking a lump sum, and the nature of the pari-mutuel bet, the $1.3 billion prize won’t be anywhere near $1.3 billion.

Setting aside the financials for a moment, just consider the sinking feeling you get when you realize you’re a loser.  It can’t be healthy to stare at a fist full of wadded up lottery tickets covered in your tears.  That megayacht with a helipad on top isn’t going to happen.  Go ahead and fire the imaginary butlers you’ll never be able to afford.

Let’s face the facts.  You are going to lose the lottery.  You have a 291,999,999 out of 292,000,000 chance that your $2 ticket isn’t going to win you a billion dollars.  Them are long odds.  And even if you win, you will still lose (need I mention the parable of Poor Jack again?).


Are there alternatives to losing the lottery?

Fortunately, there are.  One alternative is to light $2 on fire (without burning down your house) and at least enjoy some light and warmth from the fleeting flame.  And for only $2, you can tell your friends how you literally watched money burn instead of wasting it on a lottery ticket.  Instead of growing old and lamenting how you wasted $2 back in 2016 not winning a billion dollars, you can regale the youth with an epic tale of burning $2 just because you could.

But perhaps there’s another way to win the lottery of life.  Like saving the lotto ticket money and investing it responsibly.  Want to win $90,000?  Starting at age 18, forgo the twice weekly $2 tickets all year.  Keep doing that until you’re drawing Social Security at age 68 and all those $2 tickets will grow to $90,000 at a 7% rate of return.  Why play the lottery when you can guarantee a $90,000 jackpot just by buying an index fund and not wasting money on lottery tickets?


P.S.: The Powerball folks put out a pretty funny FAQ.  Check it out if you’re bored and/or tempted to waste money on lottery tickets.



What’s the appropriate amount of money to blow on lottery tickets?  $0, because, well, math.  $2 for entertainment value just to say you played?  $20 so you can boost your odds to 1 in 29.2 million?  If it’s higher than $20 just say $20 so I can feel better, okay?



September 2015 Financial Update

September is over and left us a little poorer but in overall great financial shape.  Our net worth dropped by $36,000 in spite of $8,225 in income for the month and a meager $927 in expenses.

The older kids are back in school and we’re settling into the school year routine.  I’m back to my normal weekly early retirement schedule.  We returned home from our 7 week vacation in Mexico two months ago.  Mrs. Root of Good experienced some excitement this month when she submitted her resignation letter to join me in early retirement.  Instead of quitting outright, she’s now working from home four days per week with full time pay.  Pretty sweet deal!


September is dividend season for us since that’s when our mutual funds and ETFs pay out quarterly dividends.   We received $5,038 in dividends in September and around $1,500 so far in October.  A solid bit of investment income, but it’s still a little less than the $7,500 in dividends for the second quarter.

Blog income, shown as “other income” in the chart, is back up to $1,448 after coming in at less than $100 last month.  I started this blog as a hobby without any great expectations to make big money, so it’s pretty amazing watching the blog income cover all of our expenses some months.  Somehow profitable hobbies or side hustles keep finding me in early retirement!

I didn’t make any money from freelance writing during the month (it turns out the check was really in the mail and arrived in October) but I did pick up $55 in consulting fees from my newly launched early retirement lifestyle consulting practice.  I’m not really advertising it or promoting it (other than tossing a page up here on my blog), because I don’t want it to consume all of my time.  So far interest has been strong.  If you’re interested in a one on one consultation to help guide you on your path to early retirement, check it out and give me a shout.

The “deposits” income of $70 comes from cash back from credit card spending plus cash back rebates from the and online shopping portals. I’m all about sharing the wealth, so if you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did a while back.  I try to do all of my online shopping through one of these portals and the cash back adds up.  While shopping for cruises at Travelocity, for example, I noticed Ebates pays 7% cash back on cruise purchases whereas Mr. Rebates pays only 4%.  It pays to compare rates between those two online shopping portals because the cash back rates vary.

Rounding out this month’s income is Mrs. Root of Good’s paycheck.  She’s still working but only four days per week from home.  She managed to retain her full time pay, work a little less and skip the 30-45 minute one way commute and the related gas and tolls.


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).



Now let’s look at September expenses:


We ended the month without breaking the $1,000 spending barrier.  I always feel thrifty whenever we spend less than $1,000 in a month.  $927 is just a third of our targeted budget of $2,700 per month (1/12th of our $32,400 per year early retirement budget).

Just like last month, we spent the most on groceries at $507 for the month.  That’s an expense that’s hard to avoid when you’re feeding five mouths.

The $182 in healthcare expenses includes a doctor’s visit, a prescription medicine, and a tube of prescription toothpaste with really high fluoride content.  Since we have high deductible health insurance through Mrs. RoG’s employer, we pay out of pocket for doctor’s visits other than physicals.  We rarely have more than one or two of these “sick visits” per year so we’re still coming out way ahead versus paying thousands extra for more comprehensive insurance with lower or non-existent deductibles.  And we get to max out our Health Savings Account (which stays fully invested at Fidelity).

Once Mrs. RoG quits working, we’ll be jumping into an exchange health insurance plan and snagging some big Affordable Care Act subsidies.

The prescription toothpaste was recommended by our dentist as a bootleg way of receiving fluoride treatments at a fraction of the cost.  At $1 for a moldable athletic mouthguard and $5 for the 5x strength prescription fluoride toothpaste, it’s a cheap way to prevent tooth decay and rebuild enamel in a problem spot the dentist found at my last routine check up.  Per the dentist, squeeze toothpaste into the mouthguard and wear for at least 30 minutes.  We’ll see how well it works!

The $75 in gifts represents cash we gave to our middle child for her birthday.  We gave her a few small toys too, but the cash is her main source of spending money throughout the year.  Whenever she asks if she can have something, our normal response is to say “sure, if you want to spend your money”.  The kids are getting really good at spending their money wisely and maximizing value.  And we never get nagged to buy them the latest gadget.

Another month of low restaurant spending at $54.  Two thirds of that figure went toward large quantities of pizza (about once per week roughly – thanks crazy good Papa John’s deal!) and one third to Chinese take out from Mrs. RoG’s favorite spot near her work (incredible marinated tofu).  Since she’s telecommuting, she won’t be visiting that restaurant very often since it’s on the other side of town from our house.

Gas and tolls at $45 are much lower than previous months when Mrs. RoG was commuting full time.  Since she’s no longer driving to work, we haven’t needed more than one car at a time during September, so I’m thinking we could drop to one car if we want to.

Rounding out the other expenses are $34 for internet (“cable”), $16 for entertainment (two roller skating trips for two kids to the neighborhood skating rink), and $9 in “other income” (a blog-related expense for web site hosting at Hostgator).


Year to date expenses


At $17,467 year to date spending, we are almost seven thousand dollars under the $24,300 budgeted for the first nine months of 2015.  Considering we spent $5,100 for a seven week trip to Mexico, our 2015 living expenses are ridiculously low for a family of five!

We are on track to significantly under spend our $32,400 annual budget as long as no major unexpected expenses pop up later in the year. With an almost $7,000 budget surplus, we can cover a lot of unexpected mishaps in the last few months of the year and still do okay overall.  We’re starting to get cruise fever again, so that might be a fun way to spend another couple thousand bucks before the year is over.

Monthly spending for 2015 to date:


Net Worth: $1,434,000 (-$36,000)

Another month with a big drop in net worth!  After losing $74,000 in August, our net worth dropped another $36,000 in September, bringing our two month total loss to $110,000.

After spending five months of 2015 in the $1.5 Millionaire club, we are sadly no longer qualified to hang out and breath that group’s rarefied air.  Otherwise, the drop in net worth hasn’t change a lot in our daily lives.  We’re still spending (or not spending) the same as we always do.

We have close to a year’s worth of living expenses sitting in cash even after dropping $15,000 into my solo 401k to shield most of my online income from taxation for 2015 (part of our strategy to keep our taxes near zero). Eventually, we’ll use the Roth IRA Conversion Ladder to unwind these tax-deferred contributions and convert them into spendable assets.

Emotionally, it feels good to know we won’t have to sell any investments to fund our living expenses for the next year or so even if:

  1. Mrs. Root of Good quits working for good,
  2. Root of Good blog income and my freelancing/consulting income drops to zero, and
  3. all of our investments stop paying dividends.

Odds are that those sources of income won’t disappear completely in the next year or two (though Mrs. RoG’s income probably will!).  I’m pretty confident we won’t run out of money any time soon.


The chart tells the whole story – it was a bumpy month of ups and downs (with a little more down than up).  In the middle of the month we were actually in the positive before losing the gains and closing out the month on a down note.  However the first few days of October have erased most of September’s losses.

Our net worth at the end of September is still higher than it was during most of 2014, so in relative terms we’re still feeling pretty wealthy.  We have more than enough to cover our spending needs for the foreseeable future and a steady stream of income from multiple sources.

Life is good.



How did you do in September?  Another ugly month or a month of opportunities?



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Going on a Cruise Part 1 – Overview

In the past year, the Root of Good family went on two cruises in the Caribbean.  I wrote about the first cruise in my September 2014 financial update, and a few people wanted to learn more about cruises.

I think cruising gets unfairly painted with a broad brush.  My advice is to discard any preconceived notions you have about cruising such as “it’s for old people”, “it’s boring”, “I don’t want to be stuck on a ship with 3,000 other people”, or “no thanks, not interested in plastic wrapped vacations”.

Just think of a cruise as a floating resort hotel with free food and free transportation to a few sunny and sandy destinations.  With free entertainment for kids and adults, 360 degree oceanfront views, and maybe some sea spray if it’s windy.

We probably don’t fit the stereotype of the typical cruise customer.  We’re big on slow travel.  We spent seven and a half weeks bumming around Mexico this past summer and set out on a five week road trip to Canada last year (though we returned home half way through the five weeks).  Travel is so important to us that we devote about a sixth of our overall early retirement budget to it.  Now that I’ve established my independent traveler street credibility, let’s talk cruises.


Cruise Basics

Cruises come in many shapes and sizes.  Big boats, small boats.  Except don’t call it a boat, it’s a ship.  The smallest ships carry as few as a couple hundred passengers while the largest ships carry 5,000 or more passengers.  Most of the ships from the big brands like Carnival, Royal Caribbean, and Norwegian Cruise Line carry around 2,000 to 4,000 passengers.  Add that to another 1,000 crew members, and you have a lot of people on a big hunk of floating metal.

How long is a typical cruise?  Seven nights is the standard cruise length (if there is a standard) and what I would recommend for a first time cruiser.  There are plenty of three and four night cruises, and also many cruises of two weeks or longer.  The three or four night cruises are very affordable but won’t permit a lot of time to relax and enjoy the time on board since three nights aboard equates to only two full days aboard.  Cruises of two weeks or more can be nice, but if it’s your first cruise I wouldn’t commit to more than a week in case you really don’t like it.

If you’re in the US, most cruises visit the Caribbean or Mexico and depart from ports on the east coast (mostly in Florida) or from the west coast (Los Angeles).  There are other ports of departure with limited sailing dates up and down the east coast, the gulf coast, and the west coast.  You can also visit Europe, Central America, South America, Asia or really almost anywhere in the world.  Sometimes these more distant destinations are part of a multi-week cruise departing from the US, but just as often you will depart from a port near the continent you will be cruising around.  Cruise ships only cover about 500-600 miles per day so it can take a week or two to cross the Atlantic or Pacific ocean or skirt the shores of a continent.

Are cruises cheap?  They can be very inexpensive.  The cruise we booked last September was $650 per two person cabin including taxes for a seven night cruise.  I can’t find a land based all-inclusive resort for that amount, and certainly not one within driving distance of North Carolina.  A three night cruise from Florida to the Bahamas can be under $300 per cabin.  Cruises can also be expensive.  A 32 night cruise from Florida to Chile (by way of Cape Horn at the tip of South America) can set you back $8,000 per cabin.  Some luxury cruises last a month or two and approach $100,000 for the cheapest cabin (which I bet isn’t too shabby).

The advertised cruise fare can be misleading.  The cruise we booked in September was advertised as $199.  That’s per person and doesn’t include taxes.  A cabin is what you are actually booking, which means two or more people.  On our cruise, taxes of $125 per person increase the advertised price by more than 50%.  That’s usually the case for the least expensive cruises.  The advertised price is often for the cheapest cabin on board, and if you want to upgrade to something luxurious, you’ll pay more.


What the cruise fare covers (and doesn’t)

What do you get for the $650 cruise fare (or whatever you pay)?

  • Food.  Five star dining every night.  Or all you can eat buffets, burgers, pizzas and ice cream.  We enjoyed fifteen different restaurants on our last cruise including a fish and chips counter, a fresh burrito joint, and the formal dining room with favorites like lobster, filet mignon, and crab cakes.
  • Some drinks.  Juices, coffee, hot chocolate, tea, and tap water are pretty standard.
  • Entertainment.  Broadway stage shows, dance clubs, live music, DJ’s, comedy clubs, magicians, game shows, and outdoor movies
  • Port visits.  What you do while visiting the port is up to you.  We visited Mexico, Honduras, and Belize on our last cruise.
  • Kids club.  Free childcare for kids.  Our kids love it.  Those still in diapers may not qualify for the kids club, and some cruises charge extra for childcare on port days.
  • Fitness and recreation.  Gym with treadmills, weight sets, and stepping machines are standard.  Table tennis, basketball courts, volleyball courts, mini golf, rock climbing, zip lines, water slides, swimming pools.
Mexican food from our cruise to Mexico. Almost as good as the real deal in Mexico.

Mexican food from our cruise to Mexico. Almost as good as the real deal in Mexico.

What the fare doesn’t cover:

  • Excursions while in port
  • Internet
  • Alcohol and sodas
  • Premium restaurants on board
  • Gratuities

In our experience, cruises are pretty good value propositions.  You pay a lump sum price for the entire vacation and as long as you don’t overindulge on extras, cruises can be a rather inexpensive way to vacation and experience a taste of luxury.


Life on board

While you’re on a cruise your day can be jammed packed with activities or laid back and filled with nothing more than seaside lounging with a good book with occasional breaks to dine at the seemingly endless assortment of restaurants and dining spots on board.

Each evening you receive a newsletter outlining the next day’s schedule of activities on board as well as the restaurant schedules and food themes.  Glancing back at the daily newsletter from the first day of our cruise, I see the programmed activities started at 7:00 am with a free morning stretching and fitness class at the spa and the day ended with a midnight comedy show in the cabaret lounge at the rear of the ship.  Throughout the day there are dozens of planned activities like:

  • a cooking demo in the ship’s steakhouse
  • sports trivia, music trivia, and entertainment trivia in the lounges
  • karaoke awesome party (they seriously put “awesome” in the name of the party on the schedule)
  • family friendly comedy shows
  • cornhole competition
  • mini golf tournament (did I mention the ship had a full mini golf course?)
  • two different broadway style musicals in the evening.
  • acoustic guitar performance
  • live jazz music
  • hairy chest contest (can’t say I’m sad I missed this one!)
  • ping pong tournament

The daily schedule

Those are all covered in your basic cruise fare.  There’s also a huge array of organized activities to essentially separate you from your money like the art auction, designer watch seminar, bingo, slots tournament, Texas Hold Em tournament, “free” diamond gemstone consultation, spa tours, and jewelry by the inch sales.

Between eating and lounging, we usually didn’t make it to more than the main broadway stage show each night and a little ping pong, mini golf, and swimming sprinkled throughout the day.

Early Retirement Interview

Eating, swimming, and lounging all day.

On sea days, you’ll have the chance to get off the boat for most of the day until around 4 or 5 pm and explore the day’s destination.  On our cruise, the ship stopped at Cozumel and Costa Maya in Mexico, Roatan Bay in Honduras and Belize City in Belize.


Who wants to get off the ship and explore when the view from the deck is this nice?

While on board, dress is pretty casual most of the time, but this varies by cruise line.  The only time there is a dress code is in the formal dining room.  During our cruise, the dressiest night in the dining room required “Cruise Elegant” attire (“shorts, t-shirts, jeans, flip flops, bathing suits, sleeveless shirts for men, sportswear, and baseball hats are not allowed in the dining room”).  I translated that to mean khakis and a polo shirt or button up shirt with no tie should be fine if you don’t mind being surrounded by some folks in tuxes and cocktail dresses.  So far we’ve never been tossed from the dining room for dressing inappropriately.

While on the subject of the dining room, it’s worth mentioning the social opportunities aboard ship.  You can choose to dine with your own family or group at a perfectly sized table, or you can choose to sit at a larger table with random strangers (that soon become friends).  We’ve never opted for the “dining with strangers” program, but for the extroverts it should work well.

With the advent of the internet, you can also meet strangers online (sounds like fun!) before your cruise departure date and then meet up in person once on board the ship.  If you’re interested, check out the “roll call” forums at (a great resource in general) or search facebook for the ship name and sail date for the facebook group for your sailing.

For those traveling with kids, you are in luck.  Most cruise lines operate some form of kids club which is basically all day babysitting for ages 2 or 3 up to 17.  These kids clubs are generally free though some cruise lines charge for late night service or on days that you are in port.  Our kids love love love the kids clubs because it’s like summer camp with a bunch of other kids.  The adult staff get paid to entertain kids all day.  What do the kids do?  Arts and crafts, music, video and board games, sports, and sometimes on stage performances in front of the whole ship.  On our Costa cruise a few years ago, the kids club ended each evening with a kids’ disco party in the night club complete with a real DJ, flashing lights, and awkward dancing.

And not only can you ditch your own kids in the kids club, you can also get away from all other kids on board in one of the adults only areas of the ship.  On the Carnival cruise line ships, the adults only area is called “Serenity”.  The adults only swimming pool and hot tubs were serene other than the occasional drunk 22 year old stumbling around.


Check out all the posts in the Going on a Cruise series:

Going on a Cruise Part 1: Overview (this post)

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!




Ever been on a cruise?  How did you like it?  If you’ve never been, what kind of preconceptions do you have about cruising?



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