July 2015 Financial Update

Adios, July!  You were great.  We just returned home from our seven week vacation in Mexico where we ate tons of crazy delicious food, visited amazing places, and had lots of fun.  We thought about whether we could retire abroad and patted ourselves on the back for packing very light for our trip.

July left our finances in great shape.  Our net worth continued its climb to $1,544,000.  Income for the month was ridiculously large at $9,751 (read on to find out why).  Expenses were ridiculously tiny at just $498.  A wondrous month of travel and adventure, income 20 times our expenses and a big bump in net worth means we had a superb month in financial and non-financial terms.

 

Income

June provided us with $2,680 in investment income.  Our dividend income arrives at the end of each quarter since we own mutual funds and ETFs.  July’s investment income arrived in the first few days of the month (spillover from the second quarter dividends).  The second quarter produced a total of $7,500 in investment income including the $4,833 we received at the end of June.

Blog income, shown as “other income” in the chart, was much higher than normal at $5,928 for the month.  This represents almost two whole months of blog income because we weren’t here in June to cash any paper checks we received during that month.  Blog income remains surprisingly strong, although it could be lower for the next few months since summer is usually a slower time for personal finance blogs.

Freelance writing income totaled $250 (which represents two months of freelancing income).  Not a huge source of income, but it’s interesting work and doesn’t consume a lot of free time.

Even though Mrs. Root of Good hasn’t worked since early May, her paycheck still shows up each month since she’s on a paid sabbatical.  As her sabbatical draws to a close, she’s preparing to return to work in a few days.  For how long?  Who knows.

july-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 July expenses:

july-2015-expenses

What can I say?  It’s low.  At $498 for July, we spent just a fraction of our targeted $2,700 per month (1/12th of our $32,400 per year early retirement budget).  The highest expense category was travel expenses since we spent 29 days of July out of the country .  The second highest expense was a huge grocery run to Aldi on the last day of July to restock our fridge, freezer, pantry, and fruit basket.  August spending should return to normal.

Other expenses for the month include the internet bill (for two months) and our annual cell phone bill of $10 (our plan with T-Mobile isn’t available any longer unfortunately).

Craziness in Mexico City's downtown Metro station

Craziness in Mexico City’s downtown Metro station

Summary of costs for seven weeks in Mexico

This month’s travel expenses of $269 included a mix of groceries, museum admissions, and intercity bus tickets.  We probably spent another $600 in cash that we withdrew from the ATM in June so it ended up in the June 2015 Financial Update.

The total trip budget for seven weeks was $7,668:

  • Lodging – $3000
  • Food – $1,960
  • Transportation – $1,679
  • Museums and attractions – $735
  • Miscellaneous – $294

We ended up spending about 60% of that amount, or roughly $4,450 (or $86/day) on:

  • Lodging – $1,600 ($31/day)
  • Food – $1,250 ($24/day)
  • Flights and intercity buses – $1,350 ($15/day)
  • Local transportation (taxis, metro, buses) – $150 ($3/day)
  • Museums and attractions – $100 ($2/day)

I showed the per day costs just to show how little we spent for 52 days in Mexico.

Compared to our budget, we came in well below our targets for lodging, food, and entertainment.

We took advantage of the cost savings from slow travel by staying in three major cities for two weeks each.   This cut down on travel costs between cities, saved us money by getting weekly rental rates on apartments and houses, and provided the luxury of time.  Time to relax, take a day off from being a tourist and simply lounge around the house when we wanted to.

For lodging, we primarily used AirBnB and VRBO.  You can save $25 on AirBnB reservations using this link, although they offer great value accommodations all the time.  The places we stayed all had 2+ bedrooms and 2+ bathrooms.

We redeemed our Starwood Preferred Guest points for a total of seven free nights at Four Points by Sheraton and Aloft hotels in Mexico.

For flights, we booked free flights (just pay tax) to Mexico City using British Airways Avios points (obtained from Chase BA Visa card bonus offers), and return flights from Cancun to Raleigh on Southwest using points from the Chase Southwest card.  We bought deeply discounted tickets on Interjet for about $80 each from Mexico City to Cancun.

Here’s a quick summary of the cards we signed up for to get enough points for our trip:

  • Chase British Airways Visa – currently 50,000 points bonus offer
  • Southwest card by Chase – 25,000 points bonus offer (sometimes as high as 50,000)
  • Starwood American Express – 25,000 bonus points offer (sometimes as high as 30,000)

Whether it’s hotel points or airline miles you seek, it certainly helps stretch the travel dollar.  Check out some of the airline or hotel credit card offers if you would like to get free flights and hotel nights too.  It won’t take long to accumulate enough points to travel the world for free, even if you have a family like us.

We managed to economize on food very well.  We budgeted $40 per day and spent only $24 per day.  We picked up carry out food very often and ate in restaurants when it was convenient.  Meals rarely ran over $20 for our family of five.  Some sit down restaurants were half that, and street food was often no more than $5-10 USD for all of us.  Dining out is cheap.

Groceries were cheaper than the US, especially fruits and vegetables.  We usually ate breakfast at home which was typically pastries, cereal, fresh fruit, and yogurt.  Cheap groceries plus cheap restaurants add up to much lower food costs than we anticipated.  Not that we didn’t eat like royalty on this trip.

Local transit was also a lot cheaper than expected at $3/day versus $8/day as budgeted. Some days we traveled exclusively by foot and spent nothing on taxis, buses, and subways.  However, one day we retained a taxi for the entire day to tour us around a few different outlying cities and tourist sites near Oaxaca and spent about $70 USD including a tip.  It wasn’t much more than various local transit options and was actually cheaper than going on an organized tour.  Typical prices for the metro or local buses are $0.30 USD.  Taxis are around $3-5 USD for short trips of a few miles.

july-2015-ytd-expenses

At $14,883 year to date spending, we are four thousand dollars under the $18,900 budgeted for the first seven months of 2015.  And that’s in spite of spending seven crazy weeks on vacation in Mexico!

We have spent most of our $5,400 travel budget for the year.  Since we are doing so well with spending in other categories, we won’t hesitate to go on another trip this year (maybe another cruise!) if something appealing pops up.

Our spending for the year as a whole will probably be below our $32,400 budget as long as no major unexpected expenses pop up later in the year.

Monthly spending for 2015 to date:

 

Net Worth: $1,544,000 (+$25,000)

This is the fifth month where our net worth ended the month above the magical $1.5 million mark.  During the month of July, we dipped below $1.5 million for a few days before dramatically recovering.  It didn’t matter much.  We kept on enjoying our vacation as if nothing had happened.  Because nothing did happen.  Doing nothing during small shocks in the market has its advantages.

july-2015-net-worth

As I wrote in last month’s Financial Update, the Greek Crisis was a huge deal.  Until it wasn’t.  It turned out to be a relative non-event.

We continue to make our own luck using our patented Luck Making Machine.  It’s working well so far.  Even if our lucky streak doesn’t continue forever (which it won’t), I still won’t worry.  I’ve explained before why I think it’s unlikely we’ll ever run out of money in early retirement.  As I approach two years in early retirement, I growing increasingly comfortable with that idea.

As for which way the markets are headed, I can’t say.  No one can.  Stick with a solid asset allocation and skip expensive money managers and you’ll do much better than the average retail investor over the long term.

 

 

Did you see a big jump in net worth during July?  Any big money moves coming up in your life?

 

 

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51 comments

  • Amazing month RoG. It’s great how you crushed the travel budget while still having a ton of fun and seems like you did everything you wanted to. Bravo! I just reported my net worth for the first time and it felt very risque 🙂

  • Oh wow, those are amazingly low expenses for 52 days in Mexico, especially when you guys had a great time! I’m very impressed, well done. You guys should definitely do another trip later this year.

    Also congrats on your continued stay in the $1.5M club, we have not been so lucky, our current expenses far exceed our income (as we don’t have any since we relocated back to the Netherlands, we are currently job hunting). But having been off since mid June, we are very much enjoying this unpaid sabbatical including its travels to NYC, Iceland and the Netherlands. If this is what financial independence feels like, we just became a whole lot more motivated (the great summer weather is helping a lot too).

    Only down side is that our container with belongings has been delayed, so we are still living out of our suitcases (already since mid June). We should be back up and running again late August, at that time will finally have the opportunity to open/update all our tracking spreadsheets again (our PC is also in the container, and we currently don’t have the urge to look around for another computer that has excel… too busy enjoying the good life ;-).

    • Wow, being without stuff for so long must be liberating yet worrying! 🙂 I’d hate to be computer-less for so long (we took the Dell laptop with Excel on our vacation).

  • Great progress! Question – when did you start investing and how much did you start off with? As I invest every year, I wonder if I am investing enough so we can reach FI by the time we are 40.

    • We started straight out of college, so 23-24-ish. We saved about half our income or more in later years.

      Check out retirement calculators and plug in what you’re saving and what your target is. Reaching FI by 40 will require a fairly high savings rate – maybe 30-40%?

  • Vawt @ Early Retirement Ahead

    That is a very successful month. I really would like to replicate that trip and visit Oaxaca, Mexico City, and Cancun. The question is do I do it in 7-10 days or wait 5 years so we can stretch it out to a few weeks?

    • I would pick one of the three cities and spend 7-10 days in just that city if you do the trip now. Otherwise you’ll burn 30% of the trip with traveling between cities. Either of the 3 would be good places to visit for that stretch. I would put Cancun at the bottom of the list (it’s HOT!) but it’s awesome if you want to do beach/water stuff. Mexico City is great year round and you won’t be able to do or see everything in 10 days. It’s like NYC in that there are so many different neighborhoods, a core downtown area full of museums, then all kinds of places to explore in the city. And a huge Central Park like area (Chapultepec park) that has many museums in and around it. You could probably spend a week just exploring Chapultepec park.

  • Amazing month, Justin!

    Are there any things you wish you had done better or changed for the month?

  • Chef @ Fry The Financial Fish

    Looking good Justin!

    Making $3K/month in blog income is pretty impressive. Would you ever be interested in sharing the income breakdown from your blog with your readers? Is that all from site traffic and advertising from Google adsense or is there other advertising income you rely on. Has the income from RootofGood blog been steady or are there some months where you see big swings in traffic+income?
    Great Post!

    Chef

    • The blog income comes from many different affiliate advertising clients and google adsense. It’s kind of random from month to month, but of course tied to traffic volumes. Some months are better than others though (in terms of traffic and revenue). July’s traffic, for example, was only 80% of June’s traffic, so when I get paid in August for July advertising, it’ll be lower. The biggest random component is when a major media player shares an article or does an interview. That can add thousands or tens of thousands of visitors in a short period of time which can double my traffic for the week or month (and sometimes double the income).

      Overall I don’t rely heavily on steady blog income, although I just realized it’s sufficient so far this year to cover 100% of our actual expenses, even after setting aside a few thousand $ to cover payroll taxes I’ll owe.

  • Welcome back to Raleigh! I’m sure that you were excited with the 98 degree heat that greeted you 🙂 It sounds like you had a great vacation, although I’m guessing after so much time away you might be happy to have the comforts of home.

    • It felt just as hot here as it was in Cancun. Luckily it’s been low(er) humidity over the weekend and we even spent 30 minutes hanging out on the back deck just before sun down.

      And yes, home is a wonderful place to be. 🙂

  • Wow, nicely done on the expenses this month! That’s ridiculously low. I also love that you only spent 60% of your travel budget. You give all of us frugal people a new level to strive for!!

    • I figured we would come in under budget on the travel, but not by this much. I guess it’s just a lot cheaper down there than I anticipated and we didn’t need any miscellaneous money for laundry, doctors, etc. We also got great deals on lodging. Much better than what I originally saw from a quick peek at Airbnb/VRBO. I used quick estimates for planning/budgeting purposes and then once we spent time looking at everything in detail, there’s always a way to economize.

  • It’s always nice to see a RoG update on Monday mornings. Gives me hope for something better than this 9 to 6 drudgery.

    Keep the ads to a minimum and I’ll keep reading.

  • I can’t believe how much income you’re making off RoG, that’s some awesome monetization. Please, show me how!

    That’s crazy how low your expenses can get while still doing heavy travel. Just goes to show that spending money has absolutely no correlation with happiness.

    Eric

    • Hey Eric,

      Thanks! I think affiliates is where the real money is. Check out Flexoffers, Linkoffers, and Commission Junkie for a huge variety of affiliates. I also do credit card affiliate stuff. Amazon is okay.

      Personal Capital is probably the best, and it’s actually a money management program I use all the time (so easy to recommend). If you want to be an affiliate for Personal Capital, feel free to sign up using my affiliate referral link and they’ll throw me a few bones when you make money (<-- see, I'm trying to make money right here! 🙂 ). Aside from that, consistent, quality content. Keep building subscribers (email/FB/Twitter/RSS, etc), keep posting. Network w/ other bloggers (I'm horrible about this though!). Although to tell the truth, I just write what I think might be interesting, stick monetizing stuff in where it makes sense, and it sort of happens. No pro blogger skillz here unfortunately.

  • A great month for RoG! I’m coming up on my 3 year FIREversery in October. Maybe I’ll take a slow travel trip like you did to celebrate.

  • I enjoyed the updated numbers for July. That is amazing how much travel, food, and fun you were able to pack into that 7 week vacation. The final expense at only 60% of what you budgeted is an added bonus. I am cetain that your planning, reward points, and shopping for deals made the difference.

    Where is the plan for the next great adventure or trip?

    Bryan

    • We’ve talked about a lot of stuff for summer of 2016 but no plans at all so far. One of the plans was just staying at home and relaxing ha ha! Otherwise, so many options on the table. Somewhere in South America. A summer in Europe starting in southern Spain and working our way north and east ending up in Germany. Another month in Mexico (probably Mexico City). A road trip across the US. Or something else might pique our interest between now and next summer. Lots of options!

      We’ll likely take a cruise sometime in the next year, too.

  • Welcome back! It’s great that your trip came under budget. For 7 weeks, that’s really good. I have a feeling 7 weeks in Europe will be much more expensive…
    I’m still looking at options at CR and will check Airbnb. Sounds like a good way to reduce cost a bit.
    Great job with your blog income too especially since you spent the whole time on vacation. 🙂 That’s the life.

    • Yeah, I’m guessing Europe will be roughly double what we spent in Mexico and that will also include more cooking at home. We definitely enjoy not needing to pay attention to price much when everything is so cheap.

      The only thing cheaper about Europe might be public transit in that it’s easier to find out info on routes so we can use it more instead of taxis. Though the price of transit tickets themselves will undoubtedly be higher (hard to beat $0.30 USD subway tickets like in Mexico City. The whole family can travel an hour across town for $1.20).

      Pretty crazy this blog still earns money when I’m away. It’s still strange thinking this is a business of sorts.

  • Hi RoG,

    Great post! I just stumbled upon your blog a day or two ago and can’t get enough. I gave you and Mr. Money Mustache a shout out in my latest post.

    http://www.somedayextraordinary.com/2015/08/financial-freedom-update-1-july-2015.html

    I really like how transparent you are with your updates and I seek to do the same, albeit throughout my journey to an early retirement. Hence, my first financial update. I hope to be in your position one day, but I have A LOT of work to do to get there.

    Thanks for the inspiration and keep doing what you’re doing!

    -DP

  • My net worth on August 1st was $2,968,725.94, up from $2,832,363.86 on July 1st. Took a nice quarterly dividend from my company in July and added $100k to our investment accounts.

    Glad you guys are home safe and sound and enjoyed the trip. Did you get to the ocean or was it all city touring?

    • Nice! You’re about to crack the big $3 M mark!

      We were mostly traveling in the central and southern highland section of Mexico (Mexico City, Oaxaca, and San Miguel de Allende). So not a lot of beach time, but we did get out into the countryside some. We did spend a little over a week in Cancun and Tulum so visited the beach a number of times while there. Our hotel in Cancun was right across the street from the beach so it made it very easy. Nice, but hot.

  • Our net worth didn’t go up all that much, unfortunately. Something is definitely better than nothing. Which it may be for the next two months after being hit with a large set of bills and waiting for another $900ish that’ll come in the next month.

    I guess it’s just another reason to look forward to fall.

    Glad you guys had such a great time!

  • Sounds like a good month and that’s a really incredible amount of income from the blog! I feel like you must be one of the top blog income earners in the FI sphere.

    • I know there are a few others that do pretty well, although I certainly rank up there for non-professional bloggers in the FI-o-sphere.

      • website revenue estimates for MMM are $500,000/year. The same tools estimate your yearly revenue at $36,000/year. Wonder how accurate these tools are.

        • Wow, a half million. Wouldn’t surprise me since MMM has a freaking ton of traffic. That $36,000 estimate for my annual revenue isn’t grossly inaccurate. If I annualize my earnings from the first seven months to arrive at a full year estimate, I get $30,000 or so. Though I had a couple of abnormally good months in 2015, which might skew the averages up. I’ll try to throw an annual earnings from the blog in the December 2015 Financial Update. It was something like $13,500 in 2014, though traffic was a less then.

          Cautionary note: blogging is a poor way to make a lot of money. I’m either really smart or really lucky to actually make something at blogging. I tend to think it’s mostly the latter.

  • Sounds like you guys did a great job maximizing your fun/dollar ratio down there! We also saw a big jump in net worth for July, but for different reasons. Extra hours at work. Can’t wait until our portfolio is big enough to move a significant dollar amount with market gains/losses.

    We are also about to spend our last night down in Belize. We’ve spent several weeks down here and I’ll be interested to see what our own per day numbers are. We used a lot more cash than normal, but I kept a written record, so I plan on tallying it all up in the coming days. Glad you guys had such a good time.

    • I started out keeping a detailed written diary of what we spent in cash, then gave up. Too tedious to keep track of purchases in the open air market when it’s 10 pesos here and 10 pesos there for various fruits, vegetables, and snacks. I still know the rough breakout of how we spent our money, but not down to the penny like I usually do.

      And Belize, cool! We weren’t far from you in Tulum and Cancun. Funny enough, I noticed a map in the Tulum bus station that showed the Yucatan peninsula plus Guatemala and they completely omitted Belize. It wasn’t there at all even though they had all the other countries and Mexican states outlined.

      • Haha, that’s really weird about the map! Yeah, part of the reason it was so easy to track the expenses is the exchange rate between the Belize Dollar and the USD is pegged at 2 to 1. Anyway, it was our first time in Central America and we had a blast. Now we might have to consider going back to do Mexico some time 🙂

        • Mexico is nice. If you aren’t looking for water sports and the beach, the central highlands part of Mexico is soooo much nicer than the coastal touristy areas. Weather is perfect, prices are better and it’s less touristy (= more authentic). The main down side is you’ll hear less English, so knowing zero Spanish might be tricky at times (not impossible though).

  • It is always great to see your progress. You are retired but still your income is way higher than your expense which is very impressive. What can I say? I am inspired!

  • I love that your trip was so far under budget. Sometimes it seems that we stretch ourselves so thin and estimate so conservatively then wind up grossly over budget. I am so inspired by your trip and I especially loved the food pictures you posted!

    • I tried to put plenty of funding in our trip budget so we could live it up as much as we wanted. It just worked out that we didn’t spend nearly what we planned!

  • I love your life!! HaHa, seriously your blog is pretty much the only one that sets a great example of where I want mine to be. Not just blog but life in general based on your family and travel.

    Good stuff man! Keep it up!

  • Hi there, could you also explain in as much detail of your investments that provides you with these returns? If stocks, which stocks, how much invested for how long? If real estate, what type of real estate and how much invested?

    Or perhaps you’ve already written about it and I just need a link.

    Many thanks.

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