February 2015 Financial Update
February’s headline: “Massive net worth growth and tiny expenses”. Our net worth shot up $74,000 thanks to robust returns in our investment portfolio. We managed to spend less than $1,000 because two winter storms kept us partially housebound for two weeks. And we simply don’t spend a lot of money in general because we already own just about everything we need or want.
A slow month for our dividends and interest. Our investment income was under $100 for the month. The end of March marks the start of the first quarter dividend season from our mutual funds and ETF’s, so we’ll see a lot more income in this category in next month’s income report. For all of 2014, we received $29,383 in dividends, which was up significantly from the $22,300 of dividend income during 2013.
Blog income, shown as “other income” in the chart, was splendidly higher than normal at almost $1,800. December and January were actually very busy months at Root of Good and that traffic led to a decent bit of advertising income. Thanks, clicking people of the internet!
I expect to make around $600-800 per month over the long term from blogging and freelance writing, and February did not disappoint.
I received $100 in random rebates from different sources (shown as “deposits”).
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 February expenses:
At $903, we enjoyed a month of very low spending well below our target of $2,700 per month (1/12th of our $32,400 per year early retirement budget). The last time we spent less than $1,000 in a month was June, 2014.
Big, lumpy expenses like property taxes, insurance, and our home renovation lead to the occasional outsized monthly expenditures, but we didn’t have to pay for any of that stuff in February. Since February only has 28 days, we also spent slightly less than the 30 and 31 day months. The short month plus no large, lumpy expenses make it easy to spend very little.
Our grocery expenses represent half of our monthly spending at $443. This is lower than our long term average monthly grocery expense of around $500. I spent $300 on groceries within a few days in February so I thought I was going to spend way more than we usually do. Guess not.
I visited the Asian grocery store and picked up a 50 pound sack of 2015 new crop Jasmine rice plus a ton of other staples from the Orient like sauces, spices, curries, rice noodles, bean sprouts, rice wrappers (for spring rolls), and meatballs for pho. For what some people spend on a single meal, we can stretch into a week’s worth of spicy tasty edible treats. So far these little guys haven’t wormed their way into our diet (found next to the frozen pho meatballs in an Asian grocer near you):
Wrapped up in our rather modest grocery budget are little treats like this chocolate truffle and peach champagne combo. This plus the next photo shows how millionaires celebrate Valentine’s Day for under $10.
That last picture also shows how I passed the time on a cold, snowy day. Our internet was out all day so I had to fall back to analog reading material (free from the library). Steinbeck’s “Tortilla Flat” didn’t disappoint.
The snow kept the still-working (for now) Mrs. RoG from driving to work for a total of a week. The snow saved us a decent amount on gas and tolls (only $61 spent on gas in February). Since I only drive about 80 miles per month now that I’m retired, I ended the month with almost half a tank and didn’t need to refuel in February.
Automotive expenses of $32 included new wipers for Mrs. RoG’s Accord (they take about 2 minutes to change), two quarts of oil, and a $10 windshield wiper fluid spray nozzle replacement. The old nozzle was clogged and I broke it while trying to remove it. A little DIY is how we keep auto costs cheap.
Restaurant spending of $32 included carry out pizza two times. Mmm pizza.
At $3,452 of year to date spending, we are almost $2,000 under the $5,400 budgeted for the first two months of 2015. It’s a great way to start out the year! There aren’t any major expenses on the horizon.
In January, I signed up for a pair of Chase BA cards to get another 100,000 BA Avios points (= how we fly for free). That means a $2,000 minimum spending requirement per card. I might be buying a bunch of gift cards and prepaying utilities in March and April since we probably won’t hit $4,000 of natural spending by then. Check out all of the current credit card deals if you want to cash in on free travel too!
Net Worth: $1,503,000 (+$74,000)
First off, I wanted to celebrate busting past the $1.5 million mark. I feel like we just reached the top of the Financial Independence summit. The view from up here is amazing.
We lost $8,000 in net worth during January. We gained $74,000 in February. That means we’re up a net of $66,000 for the year so far. To put that amount of money in perspective, it’s two years of our early retirement living expenses. Will the gains hold in March? Who knows. The value goes up and down. Gaining $74,000 is only slightly more pleasurable than losing $74,000 (which almost happened in September 2014).
Since we tend to spend between $1,000 and $3,000 in most months, a $74,000 gain is almost meaningless in terms of day to day spending. We haven’t made any changes to our spending habits so far.
At some point, we might decide the portfolio is high enough to start spending more money, and that probably means more fun money going toward vacations.
Since the stock market is doing really well right now, I have placed a few limit orders to raise some cash to fund our 2016 living expenses. Buy low, sell high, right?
How did you do in February? Did you catch the big uptick in the stock market?