January 2015 Financial Update

half-moon-cay-bahamas

How did we kick off 2015?  With a month of average spending of course!  January’s expenses of $2,548 were very average in spite of some lumpy expenses like the annual property tax bill.  When it comes to spending money, average is good.  Our income of $2,068 was on the smaller side and much lower than last month’s income.

 

Income

Our investment income was under $100 for January.  This is completely normal, but a psychological let down after receiving over $13,000 in December due to year end dividend payments from our mutual funds.  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 lower than average at $249.  December and January were actually very busy months at Root of Good but none of the revenue generated in those months has shown up in the magical form of cash in my checking account.  February, however, will be a very good month in terms of revenue.  And if you share anything you find interesting here, a very good month in terms of traffic, too!

Freelance writing (“consulting” income in the chart) was $125.  I expect to make around $600-800 per month over the long term from blogging and freelance writing, and January is just one of those months that came in below the long term average due to the timing of when I get paid.

The “deposits” of $85 represents cash back from our 2% Fidelity American Express card.  When I’m not working on other cards to meet minimum spending requirements to qualify for big sign up bonuses, my spending defaults to the 2% Fidelity cash back card.  I just 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.  And that means I might be buying a bunch of gift cards and prepaying utilities in April if we don’t spend that much naturally.  Check out all of the current credit card deals if you want to cash in on free travel too!

january-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 January expenses:

january-2015-expenses

At $2,548, we spent a little bit less than our target of $2,700 per month (1/12th of our $32,400 per year early retirement budget).  For those clicking that link, you might realize the budget numbers in that article say we have a $32,000 per year budget.  I gave us a 1.3% inflation adjustment for the 2015 budget based on 2014 inflation figures, which resulted in an extra $400 added to our annual budget.

I’m pretty sure we can spend more than $32,400 without busting our early retirement plans, but that’s the number I’m sticking with for targeting purposes.  $32,400 equals 2.7% of $1.2 million, which is well below the spending allowed by the “four percent rule”.

More than half of our spending in January was the annual property tax bill for our home ($1,532).  A small price to pay in exchange for enjoying pretty good schools and an awesome city Parks and Recreation department (and libraries, and fire department, and police protection, and roads, and well, you get the point).  Dear everyone north of North Carolina, don’t you wish you could pay $1,532 per year in property tax for a four bedroom house on a third of an acre in the city?  No hate mail, please.  🙂

Living the tough life in Nassau, Bahamas.

Living the tough life in Nassau, Bahamas.

In December, we paid for most of our five night cruise to the Bahamas as I mentioned in last month’s financial update.  As a result, the cruise fare of $1,134 didn’t show up in this month’s spending report.  We spent another $325 this month on cruise-related expenses to cover on-board gratuities, gas for the drive down, and parking.  At $1,459 total, this vacation provided a lot of value since we had an awesome time and enjoyed the warm Caribbean weather.  We brought the two year old this time, and he was quite a handful.

I’m still working on a series of posts outlining how we cruise “on the cheap”, but it might not get released until August when the good deals return for the off season starting in September.   Check out my summary of our September 2014 cruise if you want a preview.

Automotive expenses of $301 represent six months of auto insurance for the two of us.  I think that’s pretty low and having a good driving record helps keep rates low.  I also picked up a $20 per year discount by switching from “commuting” to “leisure/recreational” driver type.  Other than vacation related driving, I’m only putting about 80 miles per month on my car.  I’ll have to look at other insurance companies that offer per mile rates or some different rate structure since our annual miles driven will drop drastically once Mrs. RoG joins me in retirement.

January’s grocery expense of $134 should be viewed right next to the $900 we spent last month.  Average the two months out and we get back to the long term $500-ish grocery spending.  I used up some Visa gift cards at Aldi for groceries that aren’t included in the $134 January figure.  We did save some money on groceries by taking a week off to defrost in the Bahamas, although we paid for our food through our cruise fares.

We spent $9 on restaurants in January (not shown in the summary but included in total spending).  That’s a plate of Chinese take out.  I guess we had plenty of dining out on our vacation and didn’t feel the need to go out as much.  We also worked our way through all of the contents of our fridge so that nothing spoiled while we were gone for the week.

We really upped the sartorial ante in January with our $16 thrift shop visit.  Mr. RoG Jr. picked up four pair of pants and a few “new” shirts while the other kids and Mrs. RoG found a few tops and bottoms they liked.  Mrs. RoG also found a brand new looking purse for $3.  It’s not Louis Vuitton or Coach.  It’s not even fake Louis Vuitton or Coach.  But it looks pretty swanky.

As always, the thrift shop visit culminated in all of the kids receiving free stuffed animals (that we don’t need) from the “free, take one” box in the store.  This box has saved us hundreds (thousands?) of dollars on stuffed animals.  Our kids realize that there is a huge surplus of unhomed stuffed animals in the world.  As a side note, free stuffed animals are way easier to care for than real fur friends, and they don’t shed everywhere nor do they slobber on you.

In January, our garbage disposal started smoking.  At twelve years old, it was turning into quite the rebellious pre-teen and we knew things had to change for us to get along.  Thanks to Amazon, we picked up a 1/2 horsepower Badger InSinkErator garbage disposal for $80 ($11 after applying some accumulated Amazon gift cards).  Installation was a breeze and saved us from a big fat plumbing bill.  After pulling out the rebellious pre-teen garbage disposal I discovered the cause of the smoking.  I’m assuming the main crusher vessel started leaking because the motor was damp and full of rust and gunk.

I think our dishwasher felt neglected because it sprung an ugly, slow, hissing leak.  After locating the leaking part (the inlet water valve made of some cheap plastic) I dried out the flooded part of the kitchen.  The timing of this failure was perfect.  The dishwasher drain feeds into the garbage disposal, so I saved some time when putting in the new garbage disposal and reconnecting the dishwasher to the house’s plumbing.

This January reminds me of last January when I had to fix a lot of things around the house.  At least I have plenty of time now that I’m retired! Although I’m starting to wonder if we are doing something wrong to break all of this stuff each January.

 

Net Worth: $1,429,000 (-$8,000)

We lost $8,000 in net worth during January.  Apparently the stock market dropped some but I honestly didn’t check to verify that fact.  If so, that’s great news because I’m about to stick $11,000 into our traditional IRAs for the 2014 tax year contributions.  That should get our adjusted gross income low enough to bring our tax liability to zero for 2014 and bring us some sweet Obamacare subsidies in 2015 once Mrs. RoG gives up the day job.

This is the second month experiencing a net worth drop, but I’m not worried yet.  We are back to October 2014 net worth levels so it’s not exactly the end of the world.

january-2015-net-worth

These net worth drops are good reminders that we don’t know if our portfolio will go up or down, but we do know that it will fluctuate every month.  That’s the cost of a high equities allocation, but one we are willing to bare (I almost said “bear”).

Between dividends and some income from this blog and freelance writing, we don’t plan on selling huge amounts of investments each year to fund our relatively modest living expenses.  So a big drop in the market wouldn’t mean the end of early retirement for us.

 

 

How did you do in January?  Any big expenses coming up for 2015?  

 

 

59 comments

  • Nice summary! I just finished totaling up mine -I am more of a newbie to detailed tracking of expenses… one thing that shocked me was looking at all the extra expenses we have because we both work full time. I’ve had fun looking at what costs we have now as compared to entire categories that won’t exist when we FIRE in a few years.

    We had a bunch of big expenses last year – but this year should be tame… although I’m starting to save for a Disney cruise for the kids in 2016… those things are pricey! But we decided we will take some more over-the-top vacations while we are still working, because once we stop, the kids are going to have to learn to love camping as much as their parents do!

    • Yeah, I keep seeing these $100+ gas and toll bills each month. That should drop to $10/month once Mrs. RoG quits working. Otherwise we do pretty good with work related expenses. For better or worse, Mrs. RoG is too busy at work to go out for lunch.

      Disney cruises are crazy expensive and they don’t seem to discount them very often. I would definitely check out non-Disney cruises too if you haven’t already. You might find an awesome one for half or a third of the Disney prices that offers crazy things like water slides, rock climbing walls, mini golf, and probably way more crazy stuff we have yet to experience. Sure, you won’t have the Disney characters (possibly a deal breaker!) but it’s hard to get bored on cruise ships at any age (unless the parents are worn out and the kids are still going full blast). The reason I mention it is that we thought our kids would be all about Disney World or disney cruises but after asking them (and going on nonD cruises) they are totally fine skipping Disney in favor of regular cruises. And they are heavily steeped in Disney lore (Lion King, all the princess movies, etc).

      And if you need help tracking expenses, check out Personal Capital. It’s a pretty small time commitment to keep it updated once you spend 10-20 minutes importing accounts. And it summarizes all your investment accounts into one screen too.

  • There’s hope for FIRE! So many people at work say it’s not possible to retire ever even though they have six figure salaries. I don’t get it.

    • It’s definitely possible without a six figure salary (something neither Mrs. RoG or I ever enjoyed), and you’re almost silly if you can’t eventually swing it on a six figure salary.

  • Dear ROG, Don’t you wish you could spend $800 on property taxes to live in a 4 bedroom house on 1/3 of an Acre literally two blocks from downtown (albeit in the food dessert) 🙂 but I do love living in the hood for that very reason.

    • The food dessert? Sounds like a delicious place! 😉 You must be on the east side of downtown to have rates that low. It would be $8000 on the west side (only half joking…).

      I hear they are getting a new grocery store soon down that way, depending on how far south you are. Although you might be closer to what I call the schizophrenic food lion on Raleigh Blvd. Full of a mix of people that look like freshly released prison inmates and upper class soccer moms picking up deli trays for a cocktail party later in the evening.

      • The good thing about living in the food dessert is that even though there are no nearby grocery stores you can always take a bite out of the gingerbread houses or the rocky roads 🙂

        You are right about that Food Lion though; I prefer Aldi or the Asian Market, and since I’m taking the car either way, I figure I might as well go to my favorite grocery stores.

  • Glad you enjoyed your cruise! I will be going on a Carnival cruise in March that I can’t wait for, because as I type this comment it is a cold, slushy, icy mess outside in NYC.

    Also I am very envious of your mill rates in North Carolina. $1,500 for real estate taxes sounds to me like a quarter’s worth! 🙂

    • I think our mill rates are ~$1 per $100 value and they assess at “fair market value” here, although I sometimes wish I could sell my house to the assessor’s office for that price then buy a neighbor’s house for $20k less. 🙂

      As for the cruise, we like Carnival a lot. They had a reputation as being a lower class cruise line, but I don’t think that’s universally true any more. The seven night aboard the Carnival Glory out of Miami was pretty awesome and probably the nicest cruise we have been on other than once on the Celebrity a decade ago. Have fun!

      • Yeah the mill rates I’ve seen in the Northeast are usually $2.50 to $4 per $100 of property. Luckily I do not own a car anymore, but will most likely purchase a house within the next few years 🙁

        Also I love Carnival as well, this will be my 3rd one with them. Cheap flights to Florida, and the the cruise is great value. Can’t beat it.

  • I’ve just posted our January statement too. It’s the very first monthly statement I’m doing, since I’ve just started the blog in January. I will be doing it every month, it’s a great way to track what you make and what you spend, and you need to know those numbers in order to have financial independence. I’m simply amazed of how low your expenses are, and with 3 children!! We don’t have any kids, and our expenses were about $3,700 in January. That’s bad. We’re spending more than I thought we were. We have a mortgage ($600), car loan ($340), we mostly shop at Costco (but like to get organic whenever possible, and more quality food), we don’t go out much at all and no expensive restaurants (most expensive one is a sushi place we go to once every few months). We did splurge with new Macs and new phones last year. We don’t buy many clothes at all and when we do, they’re cheap. We cut the cable so now we only have a $8/month Netflix bill. So I am not sure where I can cut expenses, but they will get a lot lower if we eventually pay off the new car and the house, I guess.

    • I mentioned it elsewhere, but definitely check out Personal Capital if you want to streamline your expense tracking and don’t already have a good tool like Quicken or Mint.

      I find it most useful to catch all the “one time” expenses like the new computers, phones, etc. They all add up throughout the year and in my case, add many thousands to what sometimes seems like low spending in months where I spend very little on “one time” items.

      • Thanks, I’ll give it a shot. I’ve been using Bank Of America’s tools to track spending, and it’s pretty ok, although sometimes it puts stuff in the wrong categories. So for my January spending, I’ve done it the old fashioned way, with a pen and paper.

  • Living decidedly south of North Carolina here in Oklahoma, I am very impressed by your property tax bill! Our estimate for 2015 (three bedrooms, 1/2 acre) is $2500. We can’t use 2014 as a guide because the house didn’t exist on 1/1/2014 – bonus is that the bill was only $400!!

  • New to your blog and lot of nice information. Congrats on your early retirement. My portfolio is just shy of reaching $100K and it will be several years by the time it reaches $1M mark.

  • Looks like everything went well. I’m looking forward to the cruise guide when you publish it. My wife and I would like to head up to the inside passage at some point on a cruise.

    As for your property tax, mine is 1100/yr for 3 bedrooms 5 minutes from downtown. Not as big of a lot as you though.

    Will you be going to FINCON this year?

    • $1100/yr isn’t bad! I know some states have really low property taxes where an average home might be taxed at $500-600. Even around where I am, if you are in the unincorporated county, you don’t pay city taxes and my tax would be $500 or so less. Of course there are downsides to not living in the city (no city water, private trash service is 2x as expensive, the city parks and rec programs cost more for nonresidents, etc).

      I’m not sure about Fincon yet. Are you planning to go?

  • Outstanding job in January. Yes, the market did stumble and experience one of its correction phases, so it was tough to stay ahead of the game. But you are making up for some of that lost ground this week, as February is off to a good start.

    I am always amazed at how low your expenses can be. We do a good job on many areas ourselves since we research most purchases extensively, but updating the residence seems to always be a large outlay for us. That and the fact that since we are both FIREd we are doing more vacationing than ever before. Speaking of housing, try a 5000 sqft home on almost four acres in a nice development, with taxes of $1900 (and we might be high, so I might even grieve it one of these years.) Compared to our old stomping grounds in the North, I will take that any day of the week.

    • I know your state is notoriously kind when it comes to property taxes, as a good friend from there would point out every year when he got his $1800 assessment for a modest townhome here in Raleigh (in a somewhat ritzy area, but the condo itself is small and not fancy at all).

      Oh, I think I found the source of a lot of your spending, it’s a 5,000 sf house in a nice development! 😉

      And yes, the market probably made up all of our January losses and then some in the last 2 days. I made a speculative bet on USO (oil) and it’s pretty far in the money today, so we’ll see if it sticks.

      • USO is up 8-9% today. Nice call. Still doing well myself on the options trading; even on up days like today I can still find good companies whose shares are struggling to sell puts against.

        Dang, I think you are right on the house 🙂

        • I “only” bought 600 shares of USO, so it’s not a huge bet on oil. But it’s nice to see the bet finally paying off since it’s been under water the last couple of weeks since the purchase.

  • I just logged our January expenses. January is always a big spending month for us because of the prepayments for the year, the wedding anniversary, and birthdays. I am jealous of your property tax bill! Thanks for sharing your financials, which help me to see where I can improve for our household.

    • Our big spending months are usually January and June/July because that is when the house taxes are due and the house and auto insurance come up for renewal. So I’m feeling pretty good that we didn’t break the monthly spending target in spite of the big (small?) tax bill.

  • Looks like you had a fabulous month with your fancy cruise and all :)! I was going to hound you for every last tip and trick for your $134 of groceries, but gift cards are a great tactic. I keep asking for Costco gift cards for Christmas and birthdays, but no one in my family believes me.

    You mentioned Mrs. RoG giving up her day job–is she planning on joining you in retirement soon? That’s very exciting!

    • We bought the gift cards ourselves at a grocery store in December during the “buy $300 in Visa gift cards, get $30 back for groceries” promotion. Since I can’t use a credit card at Aldi, this is also a great way to spend $300 on a CC at Aldi (generating another $6 in cash back). But yes, a grocery gift card to a store we shop at already would be an awesome gift (like if you guys were thinking of us, oh, say mid to late December this year 🙂 ).

      As for Mrs. RoG’s departure from the working world, there are no official announcements to make today (since some of the firm’s employees read this here fine publication occasionally). The RoG public relations department cleared me to issue this statement: “Contingencies are in play that might mean it happens sooner or it might happen later”. Sorry for vagueblogging.

  • Have you considered composting instead of sending your food waste to the sewage plant? It’s frugal way to provide energy to your garden. Also, I believe the correct grammar usage is “bear” not “bare” (unless I missed a joke or something). Way to keep moving forward with an interesting life that leaves the work slog behind.

    • We’ll compost occasionally but it’s not something we want to do long term. Fire ants are a big problem here and I don’t want to feed them intentionally (other than giving them ant killer bait which they enjoy immensely. For 10 or 20 minutes 🙂 ).

      The good news is that our wastewater treatment plants reuse the food waste (as biosolids) for agricultural applications given it’s rich nutrition content. We actually toss a lot of the food waste (not that we waste much food!) in the garbage instead of using the disposer. I really went back and forth deciding whether to replace the disposer or skip it and I think there were pros and cons either way. At $80, I decided to replace it since we do use it occasionally and it comes in handy.

      I didn’t want to use the word “bear” in the context of asset allocation in the markets. That seems like I’m inviting disaster. 🙂

  • First time reader here. I was wondering if you detail the composition of your net worth anywhere on the blog. Which by the way is very impressive.

    Also how long did it take you to accumulate $1.4M in Net Worth? I have a long way to go to catch up. I just recently started tracking mine and putting together a monthly report like yours.

    Looking forward to reading more of your posts.

    Cheers!

    • I don’t break down the net worth any further anywhere. It’s basically $100k or so in home equity ($130k house minus $30k mortgage) and ~$1.3 million investments. In other words, almost all investments.

      As for the time to accumulate, it was about 10 years since we left college.

  • Love the updates. I’m surprised with your free time you haven’t jumped on the gardening / composting wagon with all that space. We love the hobby and it saves us a lot of money. For Dec/Jan/Feb we’ve enjoyed fresh orange juice almost every day right from the backyard.

    • We do okay with rich soil from all the wood chips that are rotting away in our mulch beds. That plus a few bucks in fertilizer each year keeps us rocking and rolling!

      Maybe we’ll do more with compost in the future. I’m a little ignorant to the details of it honestly and haven’t put the time into learning the pros and cons and how to’s. And I wish we could get citrus trees here to bear fruit! We planted some berry bushes last year and they should start bearing decent fruit this year or next (depending on variety). Fruit/nut bearing trees might be next!

  • Looking good sir! I need to work on my food expenses compared to your family! I can’t wait until I have that level of dividend income, but i am a couple of years out at this point. Keep up the good work.

  • Property taxes where you live are very affordable! I never realized how expensive property taxes in Missouri are until just recently. We pay $2,000 annually on our home that is estimated to sell for around $110,000 this year. We are moving to Colorado in a few weeks and the property taxes there are less than half!

    • You think your property tax bill is high in Missouri. Based on your figures you are looking at about 1.8%. Here in Southern California we pay $7,500 on a house we just bought a year ago for $370,000. That is 2%…its crazy! The normal rate is 1%, but we happen to live in a neighborhood that is paying a special assessment for a school district in the neighboring city…don’t ask me…

      • That is one of the biggest reasons why we left the tax-heavy North for the South almost five years ago. Using your valuation we are paying 3/10th of 1% on the possible sale price of our house. Not trying to make anyone feel bad, but rather realize how much paying for everything that people want in high-tax states comes out of workers and homeowners pockets.

    • Hey! I’m in Missouri. My taxes are $750 on a 225K house at the lake. Must vary by district. Mine were 1400 but I appealed them to the county commish and with a stroke of a pen they were lowered.

  • Awesome job! Admittedly it wasn’t a cash flow positive month, but great job on staying below your planned monthly expense limit. Even better when you take into account the property tax bill. 🙂

    Since a lot of your income comes through in December, how much cash do you keep on hand to cover your day to day expenses? It would seem like a difficult (stressful too) waiting until the end of the year to receive most of your income.

    Happy Saturday!

    USSFI

    • The amount has fluctuated a lot over the 18 months of my early retirement. Lately it’s been $20-40k. $20k cash on hand plus the $10k or so in taxable dividends each year roughly meets our annual spending. So you can say we have a year or two worth of expenses in cash at any given time.

      It’s not too stressful to wait on the December dividends, since we plan to sell a little bit of our investments to get us through the year.

  • Regarding garbage disposal. We have a house with a septic system. Don’t have a GD. Would suggest that most people consider not having/using one. It is a simple thing to use a strainer and deposit stuff in the trash or the compost pile. IMHO putting stuff other than water down your sink is hard on the septic system and even harder on a municipal water treatment plant.

    • With septic, I can see the rationale behind keeping any solids (even well ground up) from flowing down the drain. You’ll be paying for septic tank flushes more often, probably dwarfing the cost of garbage disposal installation. Another case of one time capital expenses being dwarfed by higher long term operating costs if you aren’t careful about the systems you choose.

      As for city sewer, I say at the rates that I’m paying for sewer service, their waste water treatment plant better be able to handle a little garbage disposal output from my house. 🙂 We keep it to a minimum, and figure if we grind it well it’s more likely to keep on flowing to the treatment plant where it can be dealt with cheaply.

  • Wow. I love how you really minimize expenses especially on that grocery but I realized you may be on trip. Hahaha. Regardless, great job!

    BeSmartRich

  • My husband and I opened our first Roth IRA’s at the end of Dec. This is our first time to do a Roth and on our statements, we have made less than $1 on $4,000 (our balances combined). Is this normal? I was disappointed. Thank you.

    • Congrats on starting your first IRAs! That’s a great step in the journey to financial independence.

      Yeah, that’s pretty normal performance for a month or two. Short term the value can go up and down, long term it should go up. Take a look again in a year or in five years. And keep contributing even if it goes down. ESPECIALLY if it goes down. You’ll be buying cheaper shares in that case.

      Are you invested in bonds or stocks in those IRA’s?

      • I don’t know. It’s through Capital One, our online bank. We have a lot of different investments; this is the first Roth.

  • I only recently found your blog and love it. We are debt free. We paid our first house off when I was 23 and our second about 8 years ago. I have recently started personal finance blogs and would like to learn more about how to do our investing.

  • I hope that the rest of your appliances don’t start joining this mini-revolt.

    Are the low driving miles a result of early retirement, or do you use a lot of non-car alternatives in your day-to-day?

    • So far so good on the appliance front. I think it’s totally random, but fairly predictable. Rarely does a year go by that we don’t spend $20-50 on parts for a repair or two, and/or $300-500 on a new appliance. It’s predictable enough to explicitly budget for it, which we do.

      As for the driving: yes. I don’t drive the 4 miles to work any more and more importantly, I don’t drive my personal car to our remote offices and across the state for meetings or site inspections like I used to (although I miss the $0.56/mile reimbursement since it only costs me ~$.20/mile). I also walk the kids to school daily and walk to the store, park, library, etc when the weather is decent. Living in the city means everything I routinely need is within a few miles if I do drive.

  • Sorry if you’ve already mentioned this somewhere in the blog, but do you include your home equity in your net worth? I’ve seen people include it and not include it. Just curious as to what you do.

  • I don’t blame you for not paying paying off the mortgage at such a low interest rate. My wife and I paid off our 15 year loan in 7 years (that was about 4 years ago). The final interest rate we had was only around 4%, but we just wanted to get rid of the darn thing. It really feels good not having any debt at all even though we could of probably made a couple more percent if we would have invested that money. What, if anything, do you calculate for a percentage growth on your home equity? I don’t currently see the homes around our area actually increasing in value much. Too bad we bought at the height of the real estate boom in 2004.

    • Yeah, our $30k mortgage at 1.99% is basically a gamble that the market will produce higher than 2% returns the next 2 years until we pay it off. Who knows, maybe the market will spike up next week and I’ll sell $30k of investments and pay it off in a lump sum.

      As for home equity, I figure it will stay constant in real terms and not produce any real gains. To me, a home is a cost and not an investment. According to Robert Shiller (the Shiller of the Case Shiller house price index), real estate only increased about 1% over the last century in real terms.

      I just stick the house in there in NW simply because it’s clean to do so. I might sell the house and permatravel, or rent it out if we travel long periods of time. So it has worth, just not a high potential for returns as a single family owner occupied house.

      As far as looking at our “investment portfolio”, I take out the house value when thinking about what assets are there to fund out living expenses. So I use $1.2 or $1.3 million (allowing some set asides to cover certain lump sum expenses like college for the kids).

  • Im surprised by the only $8k in decline in net worth in Jan. Using some very rough assumptions of ~$1M of your net worth invested in stock market, and an avg stock market decline in the neighborhood of ~3% in Jan….meaning an avg paper loss of ~$30k +/-. Im thinking your monthly return must have been very impressive.

    • We have a 50% allocation to international investments. These did much better than the S&P 500 during January, so we only suffered a 0.6% loss in January.

      2014 was much more difficult since internationals underperformed US investments.

  • Very good info (and fun)! Thanks for sharing the detailed figures! It’s hard to find that level of transparency, but I think it’s critical to helping folks with their own financial situations. I am on a similar path as yours and even thought of starting a blog like this ;). Keep up the good work!

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