July 2016 Financial Update
Thanks July, you were great. Can you tell August to keep doing the same thing please? Our net worth continued to climb throughout July to an all time high of $1,633,000. Spending was very low at $1,190 while income was a bit higher for the month at $2,336.
We just returned home from our three and a half week road trip to Canada and it was a huge success! Some of those travel expenses are included in this post, however I hope to have a separate post outlining our trip and the travel budget later in August.
Here’s what our July 2016 looked like from a (mostly) financial perspective. And some random travel pics to prove we were actually on vacation.
July investment income dropped to $78. Our portfolio consists of mutual funds and ETFs that pay dividends at the end of each quarter, so July is typically a very slow month for investment income. Our total investment income for the first half of the year is almost $10,000, putting us on pace to hit and possibly exceed the total of $28,527 in dividend income received in 2015.
Blog income, shown as “other income” in the chart, returned to a more normal $2,244 in July after a very low June. My early retirement lifestyle consulting brought in $184 at the very end of July but will show up as part of my August expense report because that’s when the payment posted to my account. August’s blog income won’t be quite as high since I didn’t publish much during July (advertising payments lag by a month).
The $13 of healthcare/medical income was a refund for the electric toothbrush heads I bought in June. Turns out they weren’t authentic Philips Sonicare brand toothbrush heads as advertised. They were very convincing fakes including the packaging, but I grew suspicious and noted enough differences to contact Philips to investigate. Turns out they aren’t particularly concerned about high quality forgeries of their merchandise, so they didn’t even ask for the eBayer’s name that I bought them from. I mentioned that the seller had hundreds of the same product listed for sale. Still no concern from Philips. Oh well.
I contacted the eBay seller and informed him he sold me some fakes and asked for a refund. $13 was refunded immediately, no questions asked. Pretty sure that’s a confirmation of my theory. In the end I got a free two pack of generic electric toothbrush heads and a cool story to share with any intellectual property attorneys I may bump into at cocktail parties.
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 July expenses:
Another month of ridiculously low (but real) spending. At $1,190, we spent just over a third of our budget of $3,333 per month (or $40,000 per year). Not bad considering we were on vacation for over half the month (though we paid for our two airbnb rentals in previous months). It’s worth noting, however, that we didn’t have any large, lumpy expenses in July like taxes, insurance, or a new minivan purchase so getting close to the magical $1,000 mark is relatively easy in those kind of months.
Travel – $423: The single largest expense for the month. This include gas for the van, meals at restaurants, parking, tolls, and other travel related expenses. We paid for the airbnb rentals and the two days of Mammoth Cave guided tours in previous months so this number seems artificially low for 17 days of traveling. We also stayed with family in the North Carolina foothills for three days on the way to Tennessee, which meant close to zero spending those days.
Groceries – $299: A few hundred dollars lower than usual. We didn’t buy many groceries in the two weeks of July before we left for vacation. Two thirds of the grocery spending occurred while we were on the road trip.
While visiting family, we found a discount grocery store that sells odd lots of product, some of which were slightly expired. We scored two cases of delicious granola bars at $0.29 per box. Great road trip food (a small step up from chips or cookies) and handy snacks while out exploring. Part of one case made it’s way back to Raleigh.
Utilities – $140: Water, sewer, trash, and natural gas bill. We still have a credit balance from pre-paying the electric bill in the spring to meet credit card minimum spending requirements to qualify for sign up bonuses (gotta love credit card travel hacking!).
Healthcare/Medical – $125: Health insurance premiums of $125 for our very impressive gold plated silver plan obtained through Healthcare.gov with some very sizable ACA subsidies.
Entertainment – $55: Hard liquor. For some reason I categorize liquor store purchases as “entertainment” while beer and wine are “groceries”.
We restocked the liquor cabinet at home before vacation, and bought a ridiculously expensive pint of Canadian whiskey at the LCBO store in Canada (LCBO = ABC store north of the border). While at the Canadian liquor store, I cringed as I watched a guy pay USD$12 for a six pack of Coors. South of the border that’ll almost get you a 12 pack of fancy beer or a case of 24 Coors.
Restaurants – $49: Chinese restaurant in Raleigh for the family; a new (to us) fried seafood restaurant for fish and shrimp for the adults in the house (kids are like “ewwwww fish!” – more for us).
Clothing – $46: Thrift shopping.
Internet (“Cable”) – $34: 50/5 mbit service. Mostly good except when it rains. The service technician is coming in a few days to figure out why.
Telephone – $12: Our annual $10 phone bill for Mrs. Root of Good’s rarely used T-Mobile cell phone plus two SIM chips for Freedompop’s free international phone service.
Service Charges – $3: Mrs. Root of Good’s 401k. Institutional Vanguard shares at tiny expense ratios but we pay a few bucks per quarter for that privilege. Worth it.
Year to Date Living Expenses
At $23,720 year to date spending, we have exceeded the $23,333 budgeted for the first seven months of the year by a few hundred dollars. In spite of the minivan purchase in March, we are almost back to meeting the annual budget. By the end of August we should be on track.
August is shaping up to be a low cost month. I’m not certain what the rest of 2016 holds for expenses. We are taking both of the older kids to the orthodontist at the end of August, so there is a chance we’ll start paying for $10,000 worth of braces this year. Their insurance covers braces in cases of medical necessity, so we’ll see whether that helps us any.
In October we’ll make the final payment of several hundred dollars for our December 2016 cruise to the Caribbean.
Monthly Expense Summary:
- January 2016 – $2,293
- February 2016 – $2,030
- March 2016 – $10,911 (includes minivan purchase)
- April 2016 – $1,829
- May 2016 – $2,979
- June 2016 – $2,485
- July 2016 – $1,190
Net Worth: $1,633,000 (+$67,000)
Our net worth continued to climb throughout July to an all time high of $1,633,000. Taking a look back at 2016, we are up almost a quarter of a million dollars since Mrs. Root of Good quit working and retired early six months ago. Quit work, make a quarter million dollars every six months. Rinse, repeat.
Well, that’s probably not how the next several years will transpire but I expect the next several decades will see us occasionally tacking on another quarter of a million dollars to our net worth given our low spending, side hustle income from this blog and my consulting, and the background growth of our portfolio.
Looking back at June and July, it’s clear the one day loss of $70,000 that we suffered after the Brexit vote was no more than a bump in the road. The lasting economic impact remains to be seen, but over the short term it turned out to be nothing more than a fleeting scare that briefly interrupted the market’s growth.
Where the markets head from here is anyone’s guess. I can’t help but feel we’re riding an old, rickety wooden roller coaster as it ratchets its way slowly up an incline. After it gets to the top, you know what happens next. But even if we see a sudden crash from the recent highs, odds are it’ll be back up the incline once more after a bit of a wild ride. That’s been the long term trend.
How was your August? Did you let your investments rise with the market?