December 2015 Financial Update
Goodbye, 2015! You were good to us all.
How did we do in the last month of 2015? During December we received over $18,000 in income while spending just $2,366. Our net worth dropped by $22,000 for the month, however we saw a modest bump in net worth for the year as a whole.
In December, we received $11,476 in dividend income. December is always the best month of the year for investment income because many of our investments pay once per year in December (see my full article on our dividends for more info). For all of 2015, we received $28,527 in dividend income, which is down about $1,000 compared to 2014. In the next few weeks I hope to publish an article breaking down our portfolio’s dividends for 2015.
Blog income, shown as “other income” in the chart, was $4,990. This is significantly higher than an average month for Root of Good. Revenue increased in December due to an incredibly busy November. My Zero to Millionaire in Ten Years article went viral, with over 500 shares on Facebook, Twitter, LinkedIn, and other social media. The article was featured on Rockstar Finance. Then Business Insider reprinted the story and their reprint received close to a million views in the last few weeks. More traffic means more people learning about financial independence, which is reward enough. But more traffic also translates into more revenue.
I’m not sure how to forecast blog income since I don’t treat this blog like a full time business or “real job”. It’s just something I do. I put out an article about once per week and monetize content where it makes sense (cents?). Gross revenue in 2015 exceeded $30,000, so I feel like $24,000 in 2016 is completely reasonable (about $2,000 per month). That’s a lot higher than the $600-800 per month I was forecasting a year ago. I don’t rely on the income from the blog for living expenses (there’s a seven figure portfolio for that!), but it’s important to factor the blog income into my cash flow forecasting.
My early retirement lifestyle consulting practice was much slower in December. I removed the “** NEW!! **” from the label on the menu bar so maybe that’s the cause. No biggie, as I’m busy enough with other diversions at the moment. I pulled in some freelancing income in December bringing the “consulting” income total to $225.
The “deposits” income of $77 comes from cash back rebates from the Ebates.com and Mrrebates.com 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.
The restaurant and electronics income of $15 in each category came from a Visa Checkout promotion that offered $15 back when you spend $15. In other words, free money.
The last item to mention from the income report is Mrs. Root of Good’s paycheck. She’s still working but only three or four days per week from home. Hey, it’s still work, but on pretty good terms. Since it’s the holidays, Mrs. RoG has been burning up some vacation days by taking 4-5 day weekends and two weeks off around Christmas. It’s also an attempt to use up her allotted vacation time before finally calling it quits in 2016.
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 December expenses:
At $2,366 in expenses for the month of December, we came in a little under our monthly targeted budget of $2,700 (1/12th of our $32,400 per year early retirement budget) for the ninth month this year.
The largest single expense was the purchase of a new Canon EOS Rebel T5i DSLR camera. We also bought a $10 Transcend 32 GB memory card for the camera. The total price for the camera plus lens will end up being around $200 after $350 rebate and after I flip the high end photo printer that came with the camera in a bundle.
We had a very normal month of grocery spending at $466. We tried to spend more money on some fancy stuff at Trader Joe’s and other stores (caviar, cheeses, champagne, beer). But it didn’t really move our monthly number very much since we economize on groceries in general (without sacrificing quality or variety).
The next largest expense in December was travel. I bought $300 worth of Carnival gift cards for $264 so that we can pay the tips on our January cruise to the Caribbean. We also put down a $200 deposit for a cruise on the MSC Divina out of Miami in late December 2016. They had a really good deal over Christmas and we reserved a balcony room for four at a bargain basement price of $1275. It’s fully refundable until October so we might switch up the reservation if we find a better deal.
In case you missed my recent series of articles on cruising, here they are:
We spent $285 on gifts during December. Most of that was cash gifts to our kids. They promptly returned most of their cash to me to deposit in their college savings account (the oldest kid’s idea, not mine!). The $285 expense isn’t all we spent on Christmas since we usually pick up gifts throughout the year when we see a good deal on something.
Utilities of $134 included water, sewer, trash, electricity, and natural gas. I still had a credit balance on the water bill so it was lower than normal in December.
Our restaurant spending increased to $97 for the month. This represents three meals from the neighborhood Chinese restaurant (two take outs and one dine-in) and $40 to Groupon for about 10 pizzas (we still have credit for six pizzas to consume during 2016).
General merchandise expenses of $68 is a catch all basket of stuff from Walmart and Amazon.
Our home maintenance expense of $49 was for a new set of mini-blinds and a new Ryobi 18v drill to replace my old drill that suffered from a dead battery. It’s cheaper to buy a new drill, battery, and charger combo than it is to buy a new battery and charger alone. Such is the way of our disposable economy. To my surprise, I managed to sell my old drill (that was in excellent condition) with the dead battery to a guy on craigslist for $25. So the net cost of my new drill combo kit was $19. Let the DIY continue!
The cable bill of $34 is our internet. I just noticed we are in month #11 of a promotional rate for high speed internet, so I’ll have to call Time Warner, tell them how cheap I am, and secure a new promotional rate.
The gasoline expense of $24 was almost a full tank of gas for Mrs. RoG’s Accord. We don’t drive that much so it should last us for a while. Possibly into February. And this gas under $2 per gallon is pretty sweet too, huh?
Year to date expenses
At $23,802 total spending for 2015, we are almost $10,000 under the $32,400 budgeted for the year. Not bad since that includes our $5,100 expense for a seven week trip to Mexico and almost $2,000 for a cruise in January 2016. We blew our travel budget category for the year but economized in other areas.
Monthly spending for 2015:
- January 2015 – $2,548
- February 2015 – $903
- March 2015 – $2,443
- April 2015 – $4,549
- May 2015 – $849
- June 2015 – $3,089
- July 2015 – $498
- August 2015 – $1,701
- September 2015 – $927
- October 2015 – $1,015
- November 2015 – $2,954
- December 2015 – $2,366
Total Spending for 2015: $23,802
In the next couple of months I’ll put out a new and improved budget for 2016 that includes higher spending in some categories (like travel) and reflects the changes that will come when Mrs. RoG leaves her job and joins me in early retirement.
We saved plenty of money to provide a comfortable early retirement lifestyle. This new budget is an attempt to intentionally spend what our investment portfolio will conservatively allow. I don’t want to look back in five or ten years and realize we have spent way less than our portfolio will support.
Net Worth: $1,503,000 (-$22,000)
It’s nice to be able to say that a $22,000 drop in net worth for the month is “small”. That used to be a lot of money to us, but in the context of the last half of 2015, it is a relatively small change in net worth.
We managed to close out the year as members of the $1.5 Millionaire Club, but just barely. During the year our net worth increased by $66,000 from $1.437 million up to $1.503 million on December 31, 2015.
2015 was full of ups and downs in our net worth. The first six months of the year was month after month after month of exuberant NW increases. The last half of the year was, well, bumpy. Between June and September our NW dropped $172,000 to a low point of $1.41 million (still a respectable pocket full of coin). By year end, the NW rebounded over $60,000 to just over $1.5 million.
Our investment portfolio didn’t do well in 2015, and in fact we suffered a loss of a little over 1%. We have a heavy tilt to international investments in our asset allocation and those didn’t do as well as the US investments in 2015. Perhaps 2016 will be the year that international investments stage a comeback.
How did you do in 2015? Any big resolutions for 2016?