December 2015 Financial Update

wishing-2016

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.

 

Income

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.

december-2015-income

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

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

 

Expenses

Now let’s look at December expenses:

december-2015-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.

christmas-dinner

Christmas dinner with the in-laws. Phnom Penh style.

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:

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.

Cheers from the Root of Good family! Happy New Year!

Cheers from the Root of Good family! Happy New Year!

 

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.

december-2015-net-worth

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?

 

 

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77 comments

  • I am constantly impressed by your spending! And congrats on the post being picked up. We don’t have any big goals or resolutions this year – just try to continue to live off of one salary and invest the second. Pretty boring. But, we are getting closer and closer to being FI, so right now plodding along and having a boring year sounds good to me!

  • Great job on selling the drill….it always has amazed me what folks are willing to pay for something that they can…”fix”. Craigslist rocks! I worry a bit about the stock market. Do you?…How much lower can oil go? …interest rates are headed up after a year at zero….and now the Middle East…Seems like “Ground hog Day” all over again to me….Your thoughts?

    • The drill buyer told me he had a whole set of Ryobi tools and extra batteries but lost his drill. I threw in the busted Nicad battery and he said he could get it rebuilt. Good for him, and good for me! No trash in the landfill, I have a working drill, and he has a working drill and we each paid around $20-25.

      Not worried about the stock market (yet). Maybe after a 40-50% drop. 🙂

      The good news about oil and the middle east is that any increase in violence and uncertainty in the region probably translates to higher oil prices (if you invest in oil). In the meantime, weak oil prices could be good news for the economy overall in the form of lower production costs for all kinds of companies from materials, to manufactured goods, to transportation.

      • Hope you’re right…I guess my point is we have had cheap oil which translates into cheap gas prices and the Fed lending money at 0% for about 10 years and my holdings showed little progress last year. With the “headwinds” of higher oil and interest rates…I worry….Here’s hoping you’re right and there is nothing to worry about…

  • Ah Mrs. RoG is Cambodian? I’m a fellow Cambodian as well.

  • Cheating on Carnival with MSC? I’m going on a Carnival cruise in February and can’t wait. I spent $32k this year but $14k of that was rent, so I spent $18k otherwise. Going to try to get that under $30k in 2016!

    • MSC is great, especially with kids. Not a high end cruise line for sure, but it compares well to Carnival in our opinion. I’ll admit that I miss the priority tendering and laundry on Carnival, but given the typical difference in price I will survive. We’re still on Carnival half the time and will get to that level on MSC eventually. MSC has (or had) a status match program running. It didn’t do much for us, but if you have no history with MSC and something like platinum on Carnival, they’ll bump you to the equivalent level. Divina isn’t here all year, but MSC is bringing a brand new ship called Seaside here in 2018.

      • We applied for status match at MSC but we’re only Red level at Carnival so not sure if we’ll even get MSC’s lowest tier. If we do get it, we’ll get 5% off our existing reservation which is my main reason for doing status match now.

    • Nice, have fun!

      I have zero loyalty – all about the lowest bidder and the best combo of location and amenities. 🙂

  • Wow, you are fantastic Mr. RoG. I only wish my blog was half as successful as yours! That would be a dream!

    And your budget – that’s really low. Half of what mine is! Argh! Congrats on your most excellent success. Happy New Year!

  • Happy New Year Justin! I love your financial updates, thanks for posting them. I’m always amazed by your monthly spending. Eating out at restaurants is still killing us…. My wife & I together spent $567 at restaurants, AND another $369 on groceries for December. I really don’t know how you do it! Unfortunately, we have no desire to eat at home so much, but I’d like to change that. And don’t even get me started about gifts either. 🙁 My wife is a VERY giving person, and we have two kids, grandkids, a large family on both sides, and a lot of close friends.

    I’m sure days like today in the market are not how you want to start out a new year. I get stressed seeing our portfolio down a few thousand on days like today. If I had your portfolio, I’d be drinking a beer by now. LOL!

    • We focus on buying good stuff that keeps food at home interesting. Today was a shopping run to 2 Asian groceries to pick up all kinds of spice pastes, a variety of noodles, and coconut milk and sushi ingredients and seafood. $50 was all we spent at those 2 stores but we’ll get probably $200-300 worth of restaurant quality food out of it.

      I’m not too worried yet about the market. It goes up and down a lot. I imagine we are down $30,000 today but don’t plan on selling anything for living expenses for at least 3-6 months or maybe longer.

      • I (we) definitely need to focus more on reducing the food budget this year.

        I decided to take advantage of the market dip today, so I fully fund both of our IRA’s for 2016. Might as well get it done & over with. 🙂

  • Given how the market was so turbuluent to end the year, getting to travel quite a bit and increase your net worth is a solid accomplishment. We ended up with a much larger percentage increase for 2015, but since our net worth is quite a bit less I would still trade for yours!

    I have a Craftsman combo set that has not had one of the 3 batteries go bad in close to 7 years (including when being kept in the garage in midwest winters), but I have some Black and Decker batteries for my trimmer and clippers that go bad after 1-2 years. It annoys me having to buy another one almost every 12 months or so.

  • I just re-read the entire post… Curious how you ended up with a home maintenance expense of only $49? I followed the link you posted for the new Ryobi drill and it’s around $96. Subtract the $25 you got for your old drill, and you’re at $71. So how did you buy new set of mini-blinds and only spend a total of $49?

    Also curious about how you construct your monthly budget. Do you use Personal Capital, or any other software such as YNAB? Or do you just do it yourself in a spreadsheet? I apologize if you’ve written about this before, but figured I’d ask anyway.

    • I didn’t buy the Ryobi drill through Amazon, just showing it for reference in case anyone is interested (it’s a great mid-range power drill for a low cost). It’s cheaper at Home Depot (where I got it with a coupon using discounted gift cards on Black Friday promotions). $44 for the drill, $5 for blinds.

      Here’s how I developed our retirement budget. That walks through the details of tracking expenses and modifying your living expenses between working and retirement as what you spend on changes. I’m also planning on releasing an updated 2016 budget article probably in the next few weeks that goes over what we expect/hope to spend in 2016.

      As for tracking, I use Personal Capital. I also maintain a separate spreadsheet as back up but it agrees very closely with PC and PC is much more handy if I need to look up what we spent on X or during a particular month (and it’s real time!).

      • I should have known you got a deal on the drill. 🙂

        I’m a die-hard YNAB fan, and can’t imagine being without it. I love the concept of “giving every dollar a job” and then spending based on the category balances. I suppose I shouldn’t freak out so much about our high spending in certain categories considering we are saving/investing over 45% of our income. I max out the 401K, 2 IRA’s, HSA, and still pack money away into taxable investments. We also have rental property income, so we’re not doing too bad. The problem is, I can’t yet see my way to an early (enough) retirement without drastically reducing our current living expenses.

        I’ll have to check out Personal Capital a little more. I do use it now, but mainly to see overall net worth. I haven’t played around too much with the expense tracking or budgeting. It seems to categorize almost everything wrong, so I’d have to keep going in there and fixing things.

        • I always get deals. 🙂 When I tell people we spend around $30k/yr, it’s probably closer to a $60-75k/yr lifestyle since we get deals all the time and no longer have a mortgage. In that respect, it’s not amazing as the headline $30k figure really sounds. 🙂

          As far as your spending on restaurants, if you are happy with the experience and do it for fun/recreation and to enjoy the food then I say don’t worry too much about it (since you’re saving 45%) unless you place a higher priority on retiring earlier. Reducing expenses is the easiest way to be able to retire early (you need less $, it takes less time to hit your savings goal, taxes will be lower on your eventual withdrawals). But if you’re dining out a lot because there’s nothing to eat in the kitchen, it might be worth focusing on a way to get easy meals cooked at home.

          I like personal capital for expense tracking. I think the system “learns” what classifications to apply to different transactions. Sometimes that leads to misclassifications where you have multiple categories for one vendor (like walmart/target that might be groceries, auto, home maintenance, clothes, medical, etc at various times).

          • How do you uncover the deals? Do you have an automated system to alert you for deals you come across, follow twitter accounts, find a good blog?

            • I like the slickdeals.net website. I check in there maybe once every day or two to see if anything I need or want is a smoking good deal. I’ll occasionally set deal alerts at Slickdeals so I get emailed when something I search for comes up as a deal or is discussed in the forums.

              But in general, I google for a coupon before buying anything anywhere online. Buy discounted gift cards for a store before making a purchase (these usually stack with coupon codes). And finally, shop through a cash back portal like Mr. Rebates or Ebates for another 3-10% cash back.

          • Thanks, that’s helpful.

  • Awesome! Happy new year! Can you elaborate on the Carnival gift cards? I am going on a Carnival cruise in January to the Caribbean as well so this piqued my interest!

    • Hmmm, I hate to share my secrets since I’m still trying to buy another $50 worth and availability is limited, but I’ve been buying them through cardcash.com. They are 12% off normally, just hard to find availability. Another site I’ve used in the past is cardpool but never seen any carnival GCs there.

      The cardcash.com GCs are mailed to you so make sure you have enough time before your cruise to receive them (4-7 days shipping I think).

      Which Carnival cruise are you taking? It’s not the Fantasy out of Charleston is it? Would be cool to hook up with some RoG readers on our cruise! 🙂

    • Carnival occasionally run a 10% bonus gift card promo, where you buy X dollars and get another GC for an extra 10% of the value. The 10% GC is relatively short lived, but can be consumed quickly as payment on a currently booked cruise. Here’s a related thread from Cruise Critic:
      http://boards.cruisecritic.com/showthread.php?t=2054374

      Almost certainly too late for a January cruise, but it’s never too early to start planning!

      I am not a customer but have heard that Verizon customers can purchase Carnival GCs at a 10% discount, but they are also rarely available and sell out quickly.

  • That Christmas dinner looks perfect! But I’m a sucker for Khmer food! Happy New Year!

    • Where have you had Khmer food? The only Cambodian restaurants I’ve seen in this part of the world were in Quebec City (Canada). I’m sure there are plenty in Long Beach CA in Little Cambodia though.

      • New reader here, whereabouts are you? My wife is also Cambodian, there are some nice spots here in Montreal.

        • We’re in Raleigh NC. We spent a week in Montreal in summer of 2014 and would love to visit again some day. I can’t recall seeing any Cambodian restaurants while in Montreal, but we visited Chinatown and then found a really awesome Asian mega-grocery store in a mall that included a Walmart.

  • Happy New Years ROG clan! Congrats on the success, look forward to reading in 2016.

    2015: Awesome!

    2016: Anticipating greater awesomeness! New resolution is to be 100% truthful all the time, even in the little things (wrote about it on my blog). My other resolution is to read 1 quality book per week, and write 1 article…lets see how that one goes 😉

    • Those sound like good goals. Though the “always truthful” part would be the most difficult. White lies are very useful. 🙂

      • I thought that too, until I really developed a philosophy around it and wrote out my ideas. Absolute truth as a default setting is liberating. I found that most of the little white lies are just laziness on my part and end up doing more harm than good in the long run. The less I tell them to others, the less I lie to myself.

        I will report back in 1 year and tell you how my resolutions went! 🙂

  • Happy New Year to you and your family. You are continuing to do yeoman’s work on teaching others in the real world how to better manage their financial lives. Congratulations on a very successful 2015, and nothing but best wishes for an even better 2016 for you and your readers. And we all need to help you by posting different ways to better manage our investments and expenses, ways that you may or may not be aware of. I for one look forward to reading about yours and others successes. Here’s to a prosperous 2016 for all!

  • Ahh, but did you get the ryobi with the new green battery pack? A huge improvement over the old ones! =).

    We had a pretty spendy year, but much of that was making improvements to our home (both the remodel and the solar system), which will serve us well for decades as we never plan on selling this place. So no regrets, but I’m also not going to be sad when we are done dropping thousands of dollars at Home Depot…

    • It’s the green ryobi with the new(er) lithium battery but the battery itself is black I think. So far a big improvement over the old Nicad. I left it sitting on the shelf for a few weeks and it still had plenty of juice to finish a small job without needing a recharge. And the new battery is much lighter than the old one too!

  • Congrats on the spending! Do you have any posts that indicate how your networth is spread across different types of accounts ( traditional IRAs, Roth IRAs, home equity, 529 plans, cash, taxable accounts, etc.)

    • I’m sure I’ve mentioned it here and there. Basically $300k+ in taxable accounts, $60k+ in HSA, $40k in 529, with most of the rest in trad. IRA/401k/457 accounts. House is paid off, worth $140k according to my balance sheet (Zillow says $166k I think; recent tax appraisal for Jan 1 2016 says $147k). Cash is around $20k right now (money market at 1% at the local credit union).

      • Thanks for sharing!

      • Thanks for posting your breakdown Justin. For me, this is where it really gets into the nuts & bolts of early retirement. And this is where I start to struggle with how I would do it myself. My wife no longer works, and our taxable investments are nowhere near enough to live on. We have some rental income, but even with that, I’d need a strategy for tapping into retirement accounts (401K, IRA’s, etc) to cover expenses. I’m 47 now and really don’t think we’ll be ready to “retire” until we have at least 2 more rental cabins (2-5 year plan), and/or a MUCH larger balance in our taxable investment account.

        In your situation, with super low expenses, the blog income, and wife still working, is it accurate to say you really haven’t had to tap into your investments much to live on? Your dividend numbers are awesome, but with only $300K in taxable investments, it wouldn’t be enough to live on without chipping away at the $300K.

        Have you written in the past about exactly how/where you spend from to cover living expenses?

        I’m really going to focus this year on getting expenses down in order to move the early retirement needle just a little bit closer.

        • So far we haven’t sold anything to live off of, other than $12k or so of an investment I wanted to dump to pay off our mortgage in 2015. Otherwise, our cash buffer has actually increased significantly since I stopped working and we’ve continued maxing my solo 401k (all blog income), our 2 IRAs, and Mrs. RoG’s 401k.

          I expect I might sell something from taxable accounts in 2016 to top up the cash buffer if we end up spending a lot of money. But if the blog income remains in the $30k territory long term, that plus dividends from the taxable account will cover most of our spending so we might not need to routinely sell anything from our taxable accounts (other than consuming the dividends).

          I wrote a little about how we’re funding our early retirement in Roth IRA Conversion Ladder. Basically the plan is to consume the taxable accounts first, which would last 10-12 years if blog/freelance income is zero. Though it’s looking like the taxable account might last much longer.

  • Congrats on a great year Justin!

    As a fellow civil engineer in the consulting industry, I admire what you’ve done. You and your family inspire me to push my family to achieve the same results.

    I look forward to your future articles.

    Thank you for being inspiring!

    • Thanks! Saving a lot for early retirement is definitely possible on a civil engineer’s salary. We tend to earn less than most other engineers, but salaries are still usually enough to permit a high savings rate.

  • Awesome year for the ROG clan! I really enjoy your posts and especially liked your Mexico/Cruise stuff as many FI traveling bloggers either don’t have kids or are just having them. Nice to see from a family perspective.

    And my favorite post of the year was probably your zero to millionaire in 10 years. So inspiring to someone early on in their journey like myself!!

    My 2015 was not great financially but good otherwise. My big 2016 goal is to get my invested assets to exceed my consumer debt. This will tip the interest in my favor and hopefully start the journey towards FI for real.

  • Keep up the good work RoG familia~~

    The $1.5M looks cool but I think your family has gone beyond that so cheers on that front. Keep up the intensity in 2016 and prosper along in the new year.

  • Love how your kids are like, “delicious, authentic food or new markers? Let’s look at the markers!”

    Are you looking into more giving opportunities for 2016 and beyond? It seems that you are all pretty satisfied with life and until the kids get more into activities, I don’t think you’ll be able to meet your goal of spending more (don’t get me wrong, I spend more than you do, but I also have different spending priorities).

    • I think this pic was taken when they already finished eating and this was me having a round #2 after a brief intermission. 🙂 But yes, MARKERS!!!!

      Not currently looking for giving opportunities yet, but may in the future when it makes sense tax wise (donating appreciated shares for a bigger tax write off in one year).

      I’m not too worried if we don’t increase spending, and I’m only thinking about bumping the target budget up to ~$40k so might be within the realm of possibilities if we say “yes, we can afford it” to more stuff.

  • Hi Justin,

    Thanks for your year end recap. You rock!

    I was wondering how your investment returns came out this year in a percentage basis. I am using the portfolio suggested by Merriman as it looks like you are.

    My return was about 2.5 percent if I count all the payouts I received for the year. My asset allocation is 60 stocks 30 bonds and 10 cash. I am an old guy so I have the bond piece. I have been working to get the portfolio parts all lined up with the proper allocation this year, but it has been hard with some taxable and others deferred.

    You gave me some encouragement in a recent post when you said you didn’t worry about having the amounts right on.

    Thanks and Happy New Year!

    • We ended the year with a -1.5% return. We’re nearly 100% stocks, so you probably did better than us due to the higher bond and cash holdings. I rebalanced within the past month but haven’t looked at it recently. Mrs. RoG just yelled to me to tell me the Dow is down 300 points (again) so maybe I’ll check on asset allocation again if it keeps going down.

      • Painful week….Call me crazy but I’m actually commiting more money to a couple of mutual funds that performed well last year…But have gotten hit hard in 2016 so far. Time will tell if this “fireman investing” pays off

  • I’m always amazed that you and other FI bloggers are willing to go full monty on your budgets, assets and other financial moves. While I fully appreciate it and use the knowledge to inspire my own moves, I often wonder if you have second thoughts about exposing yourself so much to so many people (does the IRS monitor the internet?) Do you ever find yourself discussing your personal finances with your mother in law or with the mailman?
    Good for you for being willing to walk the walk.

    I also read with interest the comments about people feeling that they had spent too much or that they are planning on cutting back on things they like to do to save more money. While I understand the sentiment, I would take a different tack. I never stop spending on things I love to do, after all what is the point of life and money if not to buy the things or experiences you love? What I would do is find a way to continue that activity at a lower price. We eat out more than most people, but we only eat at a discount – using various methods: coupons, specials etc. You’d be shocked how many expensive frivolous activities can be deeply discounted!

    • Fortunately I’m telling the truth on here so not too worried about the IRS finding out my secrets. 🙂

      I’ve had one neighbor chat me up about the blog after finding it through facebook. Pretty inane overall. No clue how many friends and family read it.

      As for spending on things you love, I agree. We focus on getting good deals on things even when it’s purely discretionary. Getting a good deal makes it easier to consume more luxury since your $ is stretched further. I guess we sacrifice on things like flexibility of schedule, by going to lunch at a place when it’s $8 instead of dinner when it’s $13 for the exact same thing. Or waiting till a place pops up on Groupon versus paying full price.

      • I’m not sure I trust the IRS even with the truth…but that’s another discussion.

        Keep up the work Rooty, you’re helping all of us to live richer lives!

  • Very impressed with your spending rate. Having no mortgage or rental helps, but that’s still quite impressive. How much did you end up saving/investing during the year? Given that your investments were -1%, my quick math tells me it was about $100,000. Is that right?

    • Hmmm, looks like we grossed about $103k income, had $10,000 in tax withheld (state, fed, payroll), and spent $24k. That means we saved around $69k out of our income.

  • Excellent post breaking down all your expenses—thanks for sharing this great information. Our family of 5 has managed to whittle down our monthly grocery bill to about $700. What’s your strategy for economizing on groceries, as you put it, without sacrificing on quality or variety?

  • Great read, I’ve just found your site, seen it on MMM and I’m very much enjoying it. My goals for 2016 are too spend 10% less and of course invest more, 2020 is my target date, hoping to be in the 7 digits by then, maybe I can pull the trigger and leave the rat race behind. Thanks

    • Glad you found Root of Good, FLby50! Stick with it and you can do it! Right now is a phenomenally great time to keep saving and investing and buying more stocks while the market is down.

  • Pretty impressive budget Justin! I think I should do one of my own to see what’s up. I haven’t budgeted in 10 years I think.

    My NW went up largely due to being long SF real estate which supposedly went up 14-20%. I’ve modeled 10% to be more conservative. Business income was up solid as well, but I expect everything to go reverse in 2016!

    My goal will be to try to spend less than $100,000 per person in my household. Looking at your budget, it should be no prob!

    Sam

    • $100k per person? Easy! Maybe even easy in SF!! 🙂

      I never budgeted while working since we were automatically saving most of what we earned. When entering early retirement, I set up a budget just to have something to measure our spending against.

  • I love the transparency! The fact that you have kids as well is empowering because I have one on the way and I wonder how it will impact me. Thanks for sharing your story!

  • I honestly don’t know how you can stomach this market turmoil. 🙁 It’s killing me… My wife & I have a sizable amount of cash we currently need/want to invest, but I have no desire to dump it in now. It sure seems like we’re in for a loooong downtrend.

    • Maybe. Fortunately for me, I don’t have to make a choice to do anything since I’m already fully invested. I guess we’re at $200-250k losses from the peak. But hey, I’ve got enough cash to get me through most of 2016 and dividends will cover the rest. In 2017 I might start to worry but I’ll still only have to sell a small amount of investments to cover 2017’s living expenses.

      I’d say start buying in now with your cash and keep investing if it continues to decline. We are still waaaaay above 2009 crash levels.

      Another tip is to ignore the financial media. Turn off the CNBC, close the web browser (except the one with Root of Good in it 🙂 ) and go outside and play. Or watch some entertaining Netflix if you’re snowed in at the moment. No reason to mope and dwell on the fluctuations of the stock market (or any other negative news outside your control for that matter).

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