July 2016 Financial Update

two-cents-photo

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.

Niagara Falls from the American side.

Niagara Falls from the American side.

 

Income

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.

july-2016-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-2016-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.

Mammoth Cave in Kentucky. The reason we only spent one night in Nashville.

Mammoth Cave in Kentucky. The reason we only spent one night in Nashville.

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.

SCORE!! FYI, that's $0.29, not $29.

SCORE!! FYI, that’s $0.29, not $29.

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.

Toronto skyline from the Centre Islands

Toronto skyline from the Centre Islands.  Photo credit goes to fellow 30-something retiree/blogger FIRECracker from millennial-revolution.com, who gave us a tour of the island. 

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.

The Space Shuttle. The coolest thing I've ever seen in a museum.

The Space Shuttle. The coolest thing I’ve ever seen in a museum.

 

Year to Date Living Expenses

july-2016-expenses-ytd

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:

 

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.

july-2016-net-worth

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?  

 

 

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105 comments

  • That’s another impressive month! Now that we have reached FI we are just leaving things on “auto-pilot” right now and watching the accounts grow. The graphs on Personal Capital are certainly fun to watch. The Falls are certainly a great summer adventure. I grew up a half hour from there and we visited frequently but I never did the Maid of the Mist tour until I was in my 30’s! Sometimes we ignore the fun in our own backyard. As for liquor store purchases being “entertainment” vs. beer/wine being “groceries” – maybe you have more fun stories from drinking liquor than the others? 🙂

    • We’ve been to Niagara Falls twice now. Very amazing. We intended to do the Maid of the Mist (or rather, the Hornblower on the Canadian side) but the lines were insane (up to 2 hours wait) so we skipped it again. Next time maybe. 🙂

      I think the liquor as entertainment comes from the fact that in North Carolina, we can only buy liquor at the ABC store (state licensed liquor store), so a purchase there is 100% liquor. Whereas with beer and wine, it’s never sold at the ABC store, only grocery stores and convenience store places (plus dedicated wine/beer stores but we rarely shop there). So the beer and wine are usually $10-20 of a $50+ grocery bill, and I don’t take the time to carve out those expenses. After all, what’s the difference in spending $10 on beer vs $10 on soda or juice? It’s all stuff you drink. 🙂

  • I ran our net worth numbers the other day and we reached a new all-time as well in August.

    It helped that our rental properties were deemed by Zillow to have gone up a bit. (I know that Zillow isn’t definitive, but it’s actually very close to comps for our properties, so I stick with it.) The stock market moved up as you experienced, which also helped us.

    You just made me think of the coolest thing I’ve ever seen in a museum. I’m going to go with the Star-Spangled Banner at the Smithsonian… hard to top that.

    • The Declaration of Independence (the piece of paper that started this whole American party!) at the National Archives is pretty cool too now that I think about it.

  • Thanks for another thorough summary of your monthly finances. The consistent trend I am seeing with the ER/FI bloggers that I follow is that you are all making a fairly substantial income, at least from an early retirement standpoint, from the ads you have on your blogs. I’ve seen anything from $12k to over $40k a year in blog income reported. You just reported over $2,200 in July income from this blog, how amazing is that? Health care is my biggest concern in transitioning to ER. As a single person, I need to be very careful about my income in retirement if I want to take advantage of any subsidies to offset the outrageous costs of the national health care plans. Perhaps blogging and using some of the income it generates is the way to go and have that income cover my health care costs in retirement. And maybe treat myself to a six pack of fancy craft brew as well.

    • Successful bloggers can make more than pocket change. Most bloggers make little if any money. Blogging shouldn’t be part of your retirement plan unless you’re already successful at it – or have additional fallback options.

    • The blog income is pretty awesome and mostly unexpected. I never figured I would make more than a few hundred, or maybe a few thousand if things really took off. I’m just glad I don’t have to rely on the blog income because then it would become a job. And I’d be freaking out every time the income dips below $1000 like it did in June. I also enjoy not being beholden to any advertisers that might control my content because I can always ditch them if we have a disagreement.

  • We saw a very nice increase in our all stock portfolio in July. I’d love for the momentum to continue!

    Looks like a fun vacation. Did you like Mammoth Cave? It looks pretty awesome to me and is think the kiddos would have fun.

    Thanks for the update!

    • Yes, Mammoth Cave was awesome. That plus Niagara Falls plus seeing the space shuttle were the top 3 experiences on this trip. Definitely worth a stop if you’re ever near Nashville, Cincinnati, or western Kentucky. We might even go back if we head out west again.

  • “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.” Can you take this on a speaking tour for crowds full of people that say that early retirement is impossible and/or that investing is just gambling your money away?

    Congrats on a great month!

  • Nice pic of the falls. And $12 for a six pack of Coors – that’s criminal!

  • Great monthly post as usual.
    Trying to mimic a lot of the principals you write about here in Israel (as much as possible).

    Are you planning a tax summary this year like in previous years? One of those we earned X and only paid Y in taxes.

  • I have to say that the Falls are better from the Canadian side! We realized a gain of over $30k last month, which is pretty good I think. So far this year we are up $121k, including our contributions and home equity. I am weary of the end of August though…maybe a little PTSD from last year?

    • You know, I’ve always heard they are better from the Canadian side, but you get right up next to the falls a lot more on the American side. I also think the American side is way nicer to walk along since it’s all park-like and relatively un-commercial and not too packed. The Canadian side was mobbed with people while we were there (on a weekend – probably not the best planning on our part!). In terms of the best vista, I want to say the view from the Rainbow bridge between the US and Canada might be the most panoramic. By straddling the border, you could put one foot in US territory and one foot in Canadian territory and enjoy the view from both. 🙂

  • Physician on FIRE

    That was a pretty massive road trip. Did the kids do alright in the car for that length of time? I remember being oh so bored as a child, but that was before little screens were invented.

    It’s awesome to see your net worth continue to increase in early retirement. I’m trying to set things up so that will be the most likely outcome for us when I am retired in a few years.

    Cheers!
    -PoF

    • The kids didn’t get bored in the car (we just asked them today). That’s because:
      1. tablets – they each played minecraft or watched movies most of the time they were awake
      2. naps – they get motion sickness so for the long drives, especially on curvy roads, they get Bonine. Drowsiness ensues. They sleep half the time.
      3. frequent stops – every couple of hours at least for gas, bathroom, snacks, a museum, or a meal
      4. spreading the long drive days throughout the trip – rarely did we have back to back days where we were driving 4+ hours. The only time that happened was the last 2 days of the trip where we drove Niagara Falls – DC for 7+ hours, then 5 hours from DC to Raleigh the next day. Otherwise, we always had at least a day or two between the 4-7 hour drive segments.

      • It’s an impressive feat with 3 kids! Great tips too, thanks!

        We haven’t yet attempted a “longer that one day” road trip with the kids, but I need to try it soon!

        Congrats on a great July! Your expenses were practically nothing!

        • The main thing with a road trip involving kids is to plan plenty of slack time. Instead of back to back long driving days, find a neat place to spend a night or two and take it easy.

      • We drive to northern Ohio once a year with our three kids and they usually do fine as well. My husband rigs an old laptop onto the front center console of our minivan and we play DVDs on it, changing the DVD every couple hours when we take breaks.

      • We took a 6 week road trip with our 5 kids (and dog) this summer. 4 hours was the max they could handle in the van. Our kids get such horrible car sickness. We did the bonine plus dramamine and that seemed to do the trick! It’s so fun to be able to see the country with them when they are little. They are much easier to impress than teenagers. =)

  • Spend $1,000 Increase net worth by $67,000.. living the dream! 29 cents for a box of granola bars is a heck of a deal. I’d like to see a lot more discount grocery chains. Slightly beyond “best by” dates are meaningless.

    • This discount grocery was pretty good for a few things, but many of the items were no better than Aldi prices (though carried many name brand goods at or near Aldi prices). The one downside was the lack of “healthy” food. Not really any staples like fresh fruits and vegetables (hard to stock and manage I imagine).

  • For the record, Canadians pay more taxes because we have universal healthcare coverage. As a physician, that means I can treat any of my patients properly and in a timely fashion, regardless of their financial situation. Not a bad trade for people having to pay a bit extra for a luxury like beer.

    Also, the next time you’re in Canada, drink some good Canadian beer!

    • >As a physician, that means I can treat any of my patients properly and in a timely fashion
      eeh I wish it was true for all Canada… Im from Quebec and here, the waiting lines to clinics are ridiculous 🙁
      As of the financial situation of the patients, you are right that money makes no difference it seems. Poor or rich, the waiting line is still long!

    • Beer is a luxury? I think it’s a constitutional right down here in the US! 😉 I wasn’t sure if the high prices were due to taxes or that’s just the price you pay because of the state controlling the supply of liquor (and setting prices). I asked about the taxation of alcohol at the LCBO because I was surprised there was no 13% sales tax added to the purchase. The clerk informed me the tax was already built into the sticker prices on the shelf, so no need for additional sales tax. I think our liquor south of the border is generally the same way – it’s marked up to include some liquor tax but we also pay the much smaller sales tax on it too (though liquor laws vary widely by state and by county).

      What are good Canadian beers? We bought a case of Legitime beer in Montreal 2 years ago and I remember it being decent (though I’m no beer connoisseur and enjoy a crappy light beer like Coors just fine!).

  • Looks great, as usual. Your expense is so low even with being on vacation for so long. That’s awesome. Someday, we’ll get there too. $12 for a six pack of Coors? That’s nuts. I’d much prefer fancy beer. Although, I can’t drink much anymore due to health concerns… Enjoy the last bit of summer!

    • Hey if you can’t drink much then you have to make sure any you do drink is quality, right? 😉

      Enjoy your summer too! We have quite a bit of the summer weather left, though the days of summer vacation for the kids are rapidly ticking away (down to 2 weeks and a day now!).

  • Great shots! I love the Space Shuttle pict. I wish I could get away with categorizing alcohol as entertainment and groceries but Mrs. Enchumbao wouldn’t let me get away with it. So we put any alcohol consumption under Alcohol & Bars. At least that’s how Mint categorizes it. It helps us to see how much booze we’re consuming at any point. As a couple without kids it’s easy to overdo it!
    We use Mint to track our expenses and Personal Capital to track our asset allocation.

    • We don’t buy enough alcohol to justify a separate budget category, so it was either Entertainment or Groceries. If we have a drink out at a restaurant (which is rare), it would go under “restaurants”.

  • What is this 1K of spending?? I listened to your podcast with the mad fientist and you said that “it’s ok to spend more”!! c’mon, use this 4%!

    Joking, obviously 🙂

    Amazing July for you and for every index investor (I got a +26K too).

  • What a great month, Justin. Glad to see you guys had a nice trip and are able to spend so little! I think you’ll have to force some spending to get to 40k for the year. Such a great position to be in.

  • Wow….incredible expenses for a month….$1100….for a family of five….while on vacation. Well done….Portfolio increasing by $67K….”icing on the cake”. 3 weeks is a long time…How did the kids do being away from home that long? And I’m guessing the “new” van performed well?

    • The kids did great. Huge difference between age 2, age 3, and age 4 for the youngest (though he was pretty good at age 3 last year). We’ve also calibrated our expectations of what we can reasonably cover in a day. Sometimes that means just a couple of hours of sightseeing activities. And lots of snack/drink/rest breaks.

      The van was awesome. Much nicer to do a long road trip in it. Surprisingly easy to navigate around the city streets in Toronto. Zero mechanical issues, though I think someone backed into my bumper while I was parked on the neighborhood street near the airbnb. This popped a bolt out of a piece of plastic serving as the undercarriage liner. No biggie, but I’ll have to find the right size bolt to fix it.

  • Your expenses are jaw-droppingly low (to this new to FI/RE world). Congrats on the jump up on net worth. I keep telling myself that the dips are opportunities and then try not to think about it too much. Wave my hands in the air like I just don’t care! (in true roller coaster fashion).

    Side question: Did you find any difficulties getting your links to work in Personal Capital? I have repeatedly had issues with our mortgage company. And also no luck with our credit union (small with 2-part login authentication). Thanks for a great blog!

    • So far I haven’t had any trouble linking accounts to personal capital. Very rarely I’ll notice issues with transactions in my accounts not importing into PC. That happened this month with Fidelity. I put in a service request and they are usually good about fixing the problem so the accounts update correctly.

    • I too am having trouble with an investment account linked in Personal Capital. It worked before, but recently doesn’t at all. I’ve e-mailed their help but didn’t receive a response. It’s a shame, because it’s no use tracking a net worth that’s inaccurate…

      • That’s for sure! So far the account totals and balances are correct, it’s just missing some transactions for me. So the bottom line net worth is correct.

  • Your net worth went up 4.2% during July, or an annualized basis of ~50% for the year. Bet you wish you could keep reliving the month, sort of like the “Groundhog Day” movie. I would take doubling my net worth every two years or so. Congratulations to you and the family on a great job! And we also saw great returns during the month as well, thank you very much.

    I believe you categorized hard liquor correctly as “Entertainment”. When my wife and I crack out the hard liquor it can oftentimes lead to quality entertainment as well.

    • Yeah, I’d take a doubling of net worth every year or two. Who wouldn’t? 🙂 I imagine our net worth’s march upward won’t be so stratospheric for the next two years though. If so I’ll sell and buy a few million in TIPS. 😉

  • Congrats on the low spending month. Please do the separate travel post.
    I’ve been hearing about some new budget grocery stores in our area. Apparently they are moving in to the old Fresh and Easy locations. I’m very excited to check one out.

  • Looks like you guys had an awesome trip! We went to Niagara Falls/Toronto back in April (brother-in-law lives in Buffalo). Didn’t know about Centre Island…nice view! Looking forward to a trip recap. We didn’t do the Maid of the Mist either though I would have sprung for it. It wasn’t as busy at the time. I was with Mrs. Living Rich Cheaply’s family and they may be even more frugal than me so we just enjoyed the free view of the magnificent falls. =) The Canadian side is nicer but unfortunately, it was a dreary day when we stopped by…and started raining at one point.

    • It was beautiful while we were there, and actually cooled down from the recent record highs. We definitely felt more mist from the falls than rain drops (though felt literally a few of those!). I didn’t really care about the Maid of the Mist but Mrs. RoG wanted to do it. But after seeing and doing all the free stuff around the falls, we were all exhausted and nearly out of time (especially if the line really did take 2 hours – we wouldn’t have been able to get on board before day time tours ended). You can get extremely close to the falls both on the American side and the Canadian side for free. The Maid prices weren’t bad – USD$15 per adult on the Canadian side, I just have zero interest in a 2 hour wait for a 20 minute boat ride to get a slightly different vantage point of the falls.

  • Net worth ticking up for sure. I think the roller coaster is fine, as long as investors don’t do anything drastic on the next dip. I rather have dividends and not sell, instead of selling like some people have done because they think a bear market is on its way. Good luck in the 2nd half of the year.

  • Nice pictures. The Falls are definitely on our to-do list! Do you use a tripod for the family pictures? One of my best investments ever was a tripod and a remote for my camera. So, we don’t have to rely on strangers to take our family pictures. People tend to cut off body parts and hold our Canon EOS so crooked, somewhere between portrait and landscape format.
    Anyway, congrats on the impressive investment performance. July was a great month for all the patient non-market-timers like us who didn’t get bent out of shape after
    Brexit. The market has been so kind, we achieved our calendar year return target already on July 31 and August is shaping up pretty well, too! Who would have thought after that first week of January!

    • Hurry up and do nothing seems to be an incredibly effective strategy most of the time. 🙂

      We have a nice compact tripod but it’s still a little bulky to carry around when out exploring. We use it for family portraits and low light photography, and brought it with us on this trip but didn’t use it a lot. No remote trigger, but the 10 second delay timer seems to do the job (to the extent possible with a 4 year old that refuses to pose for pictures 🙂 ).

  • Wow, a $250K increase in net worth over 6 months! That’s incredible. My investment portfolio is almost identical to yours, but I only gained $130K in the last 6 months. It’s all in VTSAX, the S&P index fund, with no real estate. Do you share your investments? I don’t see a post on the blog on that topic.

  • Your total expenses for the month are so low! Your family spent what I did (one person) in one month. That’s awesome! And something to aspire to.

  • Thanks for sharing another update- very impressive month!

  • How/where do you get 50/5 Internet service for only $34/month? I can’t seem to find anything for less than around $70 and it’s not even that fast.

    • Time warner cable. The normal rate is $40 but I call or go online annually and secure a price reduction to $30 or $35. We’re in the Google Fiber area so the competition is pretty fierce. AT&T now offers gigabit fiber connections for $70/mo too.

      • That’s awesome. I’m also with TWC in south-central Ohio. I don’t think anything else is available where I live except for maybe Frontier (DSL). Not sure how you secure a price reduction each year, but I’d love to hear more about that! 🙂 Every little bit counts!

        • 1. Call and poor mouth them and tell them you can’t pay the $50 or whatever you’re paying, and see if they can cut your rate some.

          2. Other way is to ask to reduce service speeds or ask to cancel. Often they will offer a discount rate to keep you at your current service tier or prevent you from cancelling. You can always upgrade service speeds later.

          3. Lately I’ll call in to reduce service speeds, and either get a discount at that point and keep my current 50mbit, or get downgraded to the $15/month plan. Then I can upgrade online for $10 per service tier to get back to 50mbit for $35/mo.

  • “USD$12 for a six pack of Coors.”

    Yup, our beer prices suck. That’s what happens when you add a shitload of taxes to everything…hey, our healthcare don’t come cheap 🙂

    Fantastic job on your vacation spending! I think we spent that much just for 2 people. Clearly when it comes to budgeting, you are the Sensei and I am the student.

    Glad you guys had fun on the Toronto islands and thanks for the photo credit! Y’all look great! (teehee, do I sound American enough?)

    • Well, your generous $1.32 CAD to the USD certainly helped a lot. This time around, Canada actually felt like an inexpensive place to visit for many things (not including beer and liquor of course).

      Nice use of “y’all”. Pepper your conversation with y’alls and nobody will know you’re not from around here. 🙂

  • Wow, everything is looking great. I need to visit Niagara falls, i have heard great things about it. It is so awesome that you have such low expenses, relative to assets/income.

    So you are saying that your wife’s working has costed you at least a quarter of a million dollars ;-). Imagine how much richer you would have been, if she had quit last year 😉

    Things do seem overvalued across the board. However, I have been told that stocks are too high ever since 2009. I constantly read about people who believe stocks will crash and burn. My thinking is, as long as my portfolio pays me dividends to hold it, I should not care about other people and just stick to the plan of saving and investing every month.

    • I’ve heard the same thing about stocks being overvalued and about to crash for several years now. Eventually those prognosticators will be true in the short term. But like you say, we’ll be collecting dividends, and the underlying investments will continue to crank out corporate profits that will make these stocks intrinsically more valuable.

  • joomanji khalifdisadiiqui

    Dave Ramsey says the number 1 key 2 success is saving. The growth aspect aint no big deal. 12% growth on $10k is $1,200. Now when you amass a million growth rates do matter.

  • jimmy nut-cracker

    Kudos for your efforts, but you need to disclose your side hustle income and consulting income for full transparency. $20-$25 does matter.

    Can you do a full blog post on your healthcare costs. Healthcare costs is just killing many others.

    • jimmy nut-cracker

      I meant $20,000-$25,000 does matter.

    • I disclose it every month here in the financial updates, and I mention it in any post where I’m talking about annual spending planning (like this post on the 4% rule). I believe I totaled $28000 or so in taxable income from the blog, freelancing and consulting in 2015, and I’m at $24000 or so gross for 2016 year to date. How’s that for transparency and full disclosure? 🙂

      The best post on healthcare so far is this one.

      In a nutshell, we pay $125/mo for $0 deductible, $1000 family max out of pocket coverage with $20 copays. That covers 4 of us. The youngest didn’t qualify for regular ACA insurance (presumably because our incomes are low enough to qualify him for medicaid) so he ended up on the state’s medicaid for kids program (which works out awesome so far!). We’ve had a number of medical visits this year, and all have worked out as expected (the $20 copay or us paying 20% up to a max of $500/person).

      Dental: 2 adults self pay – $99 special package for cleaning, xrays and exam. 2 kids are covered at 80% but so far it looks like the dentist is taking that for full payment. Kid on medicaid is 100% covered for dental.

      All in all, we aren’t likely to exceed $1000 combined for medical and dental out of pocket for 2016 unless we have an unexpected expense later in the year. Insurance premiums are ~$1500 for the year.

  • jimmy nut-cracker

    medicaid? with assets of $1,200,000? please explain- i want some of that……………lol.

    • No asset test for children in North Carolina. No asset test for adults in 32 states across the US (not my state unfortunately). My advice would be to relocate to one of those 32 states if you want some of that.

  • Question:

    How do pick up a free Freedompop chip for international calling.

    We are traveling to Spain in September and was wondering out taking our phones for Googlemaps and to be able to call each other? (Hubs will be riding his road bike around Girona).

    • Check out Freedompop.com. It’s called the “International SIM” or something like that. It’s actually a buck or two for the SIM but service is free. Data is very limited (100 MB/mo truly free) but you can increase it to 600 MB if you add 10 friends (there’s a thread at slickdeals.net where you can find a bunch of “friends” to add which is what I did).

      Google Maps is actually able to download offline content for gps navigation and maps, so that might work even without a data connection. Unfortunately the navigation is car-based only, so it won’t show bike/ped navigation routes (like sidewalks in parks or bike paths).

  • Great post, It’s always fun to rummage thru strangers’ financials!

    Your grocery steal on the snack bars caught my eye and got me thinking that in the spirit of RoG I should spill a dirty little secret about los Angeles. We are currently in the midst of a nafta inspired food price war. Prices are ridiculously low and have been falling over the past year. Recently we shopped for 4 adults for a week and spent approx $55. Between Aldi’s and 2 other ethnic style markets the prices are lower than 20 years ago!!
    A few examples: bananas 30 cents/lb, rack of pork loin ribs $1.29/lb, 15 limes 99cents, foster turkey lunch meat $1.79/lb, large box multi-grain Cheerios 99cents…and on.
    For frugal types it’s hog heaven in Hollywood! It’s never been easier to save money for important stuff like investing and FI.

    • Very awesome! Those prices are at or below what we’re paying in Raleigh! Rumor has it we’re getting a couple of Lidl’s (German grocery store; direct competitor to Aldi’s) so I imagine the grocery wars are just getting started here. What is more amazing are all of the way more expensive grocery stores that remain open with regular prices 2-3x Aldi.

      • Hopefully Lidl’s will make their way here, nothing like good old fashioned capitalism to drive prices down even further.

        As far as the higher priced places like Gelson’s and Whole Foods (we like to call them the Rockefeller Centers) staying open without competing, it’s baffling. I see that with gas stations as well – they are at least a dollar higher than say an Arco. I suspect there is a percentage of the population that refuse to frequent businesses that they consider lower income type establishments…more rockefeller mentality.

        I’m not sure how long the lower prices can hold, but it’s been an amazing summer of great food and low prices.

        • I’ve certainly heard the snobbery here with Aldi, SuperWalmart, and even the low end grocery store Food Lion. “Ewwww no way I’d shop there. It’s gross. The meat and produce suck!” When none of that is true. I actually love shopping at some of these lower end places because the inexpensive stuff I tend to buy also attracts the lower income people. They buy a lot, the merchandise gets cycled off the shelf and I’m typically buying very fresh stuff.

  • jimmy nut-cracker

    40+ % in international stocks is, INSANE. It would be ok is you were EU citizen or something. Have you thought about taking $100,000 and investing it in MORL? Great way to add an income element-19% or so……..lol.

    • 40% international is a fairly standard recommendation these days. Take, for example, the target retirement or asset allocation funds offered by Vanguard, the second largest fund manager in the world with over $3 billion in assets. They go with a 40% allocation to international within their equity allocations.

      I’m not familiar with MORL but with a 19% yield I probably wouldn’t be interested due to the risk.

  • It seems like this lifestyle only works when on is taking off the public dole via subsidies and other “freebies” that in reality, are not free but the public pays for.

    Frankly I am torn on your approach. You seem to be a healthy, well educated intelligent individual who has chosen to let others pay for you and your family to some degree, (not 100% by any means – I grant you that).
    It is not illegal, but morally – I have some issue with it.

    Did you have any misgivings about choosing to do this?

    • Interesting comment, I know a lot of people abuse the system, I get that, but in this case, I am genuinely trying to figure out which part is the morally questionable. Is there a particular part that stands out to you? just curious (I love learning from other people’s perspectives).

      As far as I can see him and his wife payed all income taxes as the rest of us while working, still pays car, houses, expenses taxes, gas, contributes to the economy by spending during vacation, grocery shopping, restaurants, etc. simply spends a lot less so he can have this advantage of tax breaks – which any of us could do. This is also forgoing Social Sec benefits that he could have gotten if working more since all those years below 30 or 35 whatever it is will be counted as zero. I also see some fees paid to the investment company, albeit low, and investment /savings in the US market (way higher that that of the average person), which benefits all of us.

      To me the very fact that this blog exists to give us all ‘a public free education good’ (which our ‘free’ public education does not do for us) and he volunteers a lot of his time in his kids school from what I have read (which is not the best school district but he is making it better by giving back with his time) AND gets to spend valuable time with his kids to teach them by example how to be independent is priceless and self sustaining is a lot more ‘giving’ than ‘taking’.

      Otherwise we could make the same claims of people with super high incomes or corporations that pay no taxes or government employees that receive pensions that we all pay for, or anyone that is unemployed (not paying income taxes) and is using public services like libraries and schools, etc.

      I guess it is all about perspective as I never consider ‘giving’ and ‘taking’ as just a monetary value.

      • I agree with most of what you state and I understand that a return to society is not always monetary. People do great work for others through the giving of time, and talent as well as treasure. My question is not intended to berate this individual or his family.

        As blogs foster idea exchange, I just wanted to put on the table the concept that this lifestyle choice is not really all about; to use your words “independence or being self sustaining”. I would reserve comments like that for the families that choose to live on the north slope of Alaska in the middle of nowhere. The lifestyle he has chosen for his family requires active solicitation of government subsidization of health care, school, and other items.

        I would argue society is subsidizing this lifestyle choice quite a bit. The fact that his youngest daughter qualifies for medicare purely because he has chosen to not work a lot in particular is troubling to me. To your point – What lessons are his children learning from that?

        Does this answer your question about my perspective?

        Any before the topic turns huge, I fully understand we do not live in a perfect world and we “subsidize” millionaires, corporations, friends of those in high places etc. and all that.

        In the end, we have to do what is right for us, our mind, heart and our family. We cannot individually solve all the ills of the world.

        • Thanks for your reply Ccjarider! As I stated before I was genuinely interested in your point of view (I know sometimes the internet can make things sounds completely different than what you intended).

          As background (and going on a huge tangent)! – my area of study was in international political and economic development (I fall on the ‘constructivist’ spectrum of my understanding of how the world works). In a previous life, I used to do consulting work for issues involving collective change. This included conducting focus groups with people of all levels of the socio-economic scale for a range of social issues like education, importance of college, causes of increasing minority high school drop out rates, voucher vs public/charter and private school views, different educational methods, health views (right or entitlement), views on depression across socio-economic and cultural groups, what constitutes as medicine, preventative vs not, differences in women and men’s health’s perspective, penal system and the impact on society, etc, etc…, so I always LOVE LOVE LOVE to hear what people value in a society, how they view that value, how they apply ethics or morality in this construct, etc. Totally fascinating to me.

          So yeah, as soon as I saw your comment my nerdy curiosity to ask more got the best of me! 🙂

      • I get those comments/criticisms occasionally here. Yeah, I’m taking $ and benefits from the government, but we all do as taxpayers, employees, and regular people riding around on taxpayer funded roads. It’s called civilization and we have a social contract with each other that we all share some things (while keeping much of what we own private).

        We can all argue over what should be publicly provided and privately provided and where the line should be. And whether I’m truly financially “independent” if I participate in a government health insurance exchange (but if I didn’t I would face penalties for failure to obtain insurance, so I do participate). Then again I’m still paying tax to some extent, and will potentially pay a lot of tax in the future with RMDs. I’ll also throw out the fact that while working we received $15,000 in health insurance benefits completely tax free, thereby saving us at least $5000 per year in taxes. So while working we got a $5000 taxpayer subsidy and now we get a $10,000 taxpayer subsidy.

        Is the $5000 “fair” and the other somehow unjust? I’d be happy with the $5000 or the $10000 or even $0 if that was the law. In the meantime, I’ll accept whatever the IRS says is owed to me and follow the direction of places like the healthcare exchange when they say “you need to apply to medicaid for your youngest kid because they qualify for medicaid and therefore won’t qualify for insurance through us”.

    • No misgivings. We subsidize others at various times, others subsidize us at various times. I’m probably a net recipient right now but it’s a complicated calculus. I have no problem with anyone participating in any program.

      If you’re asking at a policy level what would I do or how would I structure public benefits programs, then I have different thoughts. Our current system is a hodge podge mess and could do with a complete scrapping and revamping (on the programmatic/policy side as well as the technological side).

  • Just a “heads up” on health insurance it seems like a lot of insurance companies will be leaving the ACA when renewal time starts. And my insurance broker feels like the “Blues” that control a lot of health insurance in this ” neck of the woods” is going to be reducing choices IF they have any for the ACA. I hate this kind of uncertainty and I’m sure you do as well. The bottom line is the “healthy folks”, the young people aren’t buying into the whole health insurance dynamic. I have spoke to some “kids” around here….they’d rather pay the penalty…..

    • It’s looking like Big Blue will be our only insurer in 2017, so that makes plan selection easier. 🙂 We’re fortunate to rarely need to visit the doc, so don’t worry too much about the short term. There are so many medical providers around here that even a limited network would be fairly broad. We’ve been on a “limited network” most of our adult life in a way because the big hospital near us isn’t in Unitedhealthcare’s network (even when we had UHC through the employer). It’s okay, the other two big nearby hospitals are in network (and about the same distance away).

      2017 will be an interesting year in the ACA insurance marketplace!

  • I am just at awe at your expenses… gives me something to aspire to with clear examples, which are super helpful! And July was awesome for us as well, partly because I got three paychecks but also big market gains. I also am reconsidering my college savings after your last response, I think we are going to now aim at 50k for each on 529s, then rest, if needed, from their work and post tax savings.

    You know best part of starting my own blog and talking to kids about this (since I want to document my experiments with teaching them how to be financially savvy) – my 7 year old boy and I were having a conversation today and I said that because mom and dad are trying to be really good at managing money, instead of retiring at a typical age of 65, we would be able to do it at 50 (for example). I told him that was 15 years less of having to work. I told him, if he starts young he would be able to do it in his 40s or even less! His eyes widened and he asked “well how young do you have to be to start working, can I start now? that sounds awesome!”.

    Lol. I reminded him his #1 job right now would be to be a kid and play as much as possible and always, always learn, but I will be trying out new things with them to help them keep creating these habits.

    Anything that has worked for your kids other than teaching by example? Do your kids talk about money at all with you?

    The ONLY thing I worry about is that the focus on money will turn from ‘it is just a means to an end’ to ‘money is the goal’ which would completely defeat the purpose!

    • We talk about money with the kids pretty often. I don’t try to push early retirement on them, but encourage smart money choices. I explain how our lifestyle works – we saved a lot, it’s invested, and those investments produce income that we use to pay our living expenses. We bought a house and paid it off, now we don’t have a mortgage. Things like that.

      They understand marketing and I knew I was getting through when they identified a toy in the store and said “that’s $10 but it’s just cardboard and plastic wrapped around a cheap $1 toy we can get at the dollar store”.

      As for the big picture stuff, I explain things like “turning off the lights saves money on electricity which means more money for actual fun stuff we enjoy. And we’re saving the earth too”.

      I don’t think you can talk about or focus on money too much, as long as you keep it in the proper perspective. Money is instrumentally valuable because it gives you choices, freedom, and comfort.

  • OMG the toothbrush story. Hilarious. I want to be retired simply so I can investigate fraudulent toothbrush heads and and go to focus groups. The perfect example of how cost-benefit analyses change with ER. Can’t stop laughing. I love it!

    • Yeah, I usually take my losses and move on (paying $13 for $7-10 worth of what were generic toothbrush heads) but I was genuinely curious what Philips would do when they found out about these counterfeit products someone was passing as real. Turns out they don’t really care. Surprising to me, but I guess an ebay flipper putting a few hundred knock offs out there isn’t worth their investigative time and effort.

  • It’s amazing how low you can keep your expenses with a family of 5! Especially while being on vacation! Always a good read.

    The coolest thing I have seen in a museum is Air Force One at the Reagan Library in California. I wouldn’t mind checking out that space shuttle as well!

  • Hey ROG, top effort with the markets & expenses there! You guys are genuinely kicking butt 🙂
    Awesome to hear & sure there’ll be a post about your trip

    Looking forward to hearing about your next adventure!

  • Look at you happy campers going strong. Keep enjoying the good life!

  • Very cool you are doing early retirement consulting. I’ve been doing more consulting myself, but it’s kind of getting too unmanageable lately. Wanted to keep it at 3-4 a month instead of ~8 a month. Lots of work involved, but it feels good helping people 1X1.

    On to $2M by this time next year!

    At Fincon, there is a rule that all bloggers who post net worth numbers over $1M must buy drinks and dinner for all those bloggers who don’t!

    Sam

    • Yeah, I’m with you on the consulting. It’s enjoyable for me at a session per week or so, but becomes too much like work if it’s closer to every day. The feeling of accomplishment and helping others is great though. I always feel good when I know the $100 fee someone pays me gets turned into $1000-10000 in immediately implementable cost savings (taxes, investing, health insurance, etc).

      $2M by next year isn’t impossible. That would require a 22% return in the next 16 months, which is about 16% annualized. Not unheard of in the stock market at all. I’m not counting on it but it wouldn’t surprise me either.

      So are you going to Fincon? I’m not this year but perhaps in the future. I’ll pony up for some beers and dinner if you let me pick your brain for an hour or two! 🙂

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