June 2016 Financial Update

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On a day to day basis, our net worth in June zipped around like a spooked jackrabbit chased by a wolf.  That rabbit didn’t know the wolf’s name was Brexit.  By the end of the month, nothing much changed, with our net worth increasing very slightly by $1,000 to $1,566,000.  Income remained strong at $7,614 thanks to dividend payments at the end of the second quarter.  Expenses continued to be low in spite of a hefty estimated tax bill coming due in June.  Overall, our early retirement finances are looking great and our cash buffer account keeps growing.

The start of summer was remarkably mild here in North Carolina and we have enjoyed numerous days with temperatures in the 70’s.  I expect we are escaping the heat just in time as we’re about to depart on a three and a half week road trip to Canada.

Let’s open the ledger book and take a peek at June 2016!

 

Income

June investment income spiked to $5,165.  The months of March, June, September, and December are big for dividends because our portfolio is all funds and ETFs that pay dividends quarterly or annually.  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, plummeted to $642 in June after peaking at $8,950 in May.  In May I received two months of payments from a large advertiser, which means June was much worse for blog income.  My early retirement lifestyle consulting brought in $184 in June – a few hundred less than in May.  It’ll all average out in the end.  I’m glad I don’t have to rely on blog related income to survive in early retirement!

Deposit income of $1,522 mostly came from the sale of our 2000 Honda Accord.  We are once again a one car family and don’t miss having a second car (but we are missing the ease of driving a sedan instead of the bulkier minivan).  We sold the car for $2,300 to Mrs. Root of Good’s nephew who needed basic reliable transportation to get to class and work.  $1,500 cash up front and the remaining $800 over the next few months as his financial aid comes in for the fall semester.  So far this year we spent $8,200 buying our minivan and sold our two sixteen year old cars for $5,200 total, leaving us only $3,000 poorer due to car swapping.

The other $22 of deposit income represents the cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. If you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card like I did.  I try to do all of my online shopping through one of these portals and the cash back adds up fast.  Last month I received the $110 cash back for booking our January cruise through Expedia (while clicking through Ebates to get to Expedia).  It’s a nice way to get a 10% discount on every cruise from a booking site we already use.

Travel income of $100 is part of the Barclay Arrival card $400 sign up bonus.  It ended up being closer to $500 cash back on travel when you meet the $3,000 minimum spending requirement (earning 6,000 more points) and get the 5% point refund when you redeem points.  To cash out the Barclay Arrival bonus reward points, I paid $394 toward our December 2016 Caribbean cruise then immediately reimbursed myself using the bonus points.  Then I charged another $100 payment for the cruise and reimbursed myself using my last 10,000 Barclay Arrival reward points.  In June we finished meeting the minimum spending requirement for Mrs. Root of Good’s Citicard American Airlines Aadvantage card for another 50,000 AA miles.  Now I’m working on earning the 50,000 mile bonus on my own Aadvantage card.  It’s a shame to pay full price for travel so don’t miss out on the credit cards that allow you to travel hack your way to a free trip.

june-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).

Lunch with the kids on the last day of school!

Lunch with the kids on the last day of school!

 

Expenses

Now let’s look at June expenses:

june-2016-expenses

Another month of modest spending.  At $2,485, we were almost $1,000 under our budget of $3,333 per month (or $40,000 per year).

The top expense for the month was income tax at $1,250.    Now that we are both retired, I’m including tax payments and refunds as expenses and income, respectively, since they are included in our $40,000 annual retirement budget.  We started making estimated tax payments this year because we no longer have income tax withheld from paychecks at work.  I asked the IRS to apply my $640 federal income tax refund for 2015 to my 2016 tax liability but they didn’t listen and instead sent me a check last month.  Going forward, I’ll pay $600 every quarter and might be entitled to a small refund once I file taxes.

All other “core” expenses in June totaled about $1,200 so we are doing a great job keeping routine expenses low.

The next largest expense for June was groceries at $673.  This is slightly higher than normal (here’s what we buy in a typical month) but includes $100 in Visa gift card purchases (to save $10 on groceries).  I’ll be using those Visa gift cards for groceries in the future.  We won’t spend nearly as much on groceries in July since we will try to clean out the fridge and freezer before departing for our almost month long road trip.  Time to get creative with leftovers.

Chipotle chorizo shrimp alfredo on penne pasta.

Chipotle chorizo shrimp alfredo on penne pasta.

Healthcare spending totaled $199.  Health insurance premiums were the bulk of that at $125 for our very impressive gold plated silver plan obtained through Healthcare.gov with some very sizable ACA subsidies.  The other $74 was a copay for a doctor’s visit, six months of prescriptions, and four Sonicare electric toothbrush head replacements.

$98 for utilities is our water/sewer/trash bill from the city.  I paid the June natural gas bill in the first few days of July.  I was a few days late paying the $24 gas bill (oops!) and they hit me with a $0.24 interest charge.  I don’t have the bill on auto-pay because I want to optimize my utility spending each month to meet minimum spending requirements on credit cards.  I prepaid our electric bill earlier in the year to meet minimum spending requirements on a credit card, so I won’t have an electric bill until the end of the summer.

Restaurant spending of $62 covered our family plus one more adult at a Father’s Day lunch (a made up holiday here in the US for all you international readers) for Mrs. Root of Good’s family.  It was a last minute event and those who set it up didn’t realize it was $15 per person until it was too late.  The restaurant’s affordable weekday lunch prices double on weekends.  Lesson learned for next time – suggest a restaurant that doesn’t double prices on weekends.  At least the food was better than expected!

Free birthday treats at Starbucks and Chik Fil A for my 36th birthday.

Free birthday treats at Starbucks and Chik Fil A for my 36th birthday.

The home maintenance expense of $60 covers gift cards for Lowe’s I bought on ebay at a $15 discount.

$58 in automotive spending covered all the replacement parts and supplies to rebuild a portion of the air conditioning system in the Honda Accord we just sold.  The expansion valve clogged and the high pressure fill valve failed leading the system to evacuate itself in a messy volcano of refrigerant and compressor oil.  I could have taken the car to the shop and paid somewhere around $700 for the repair.  Or spend $58 in parts and supplies and several hours under the hood.  You know which one I chose. After a valiant effort the air blows cold and the pressures on my manifold gauge set were in line with expectations.  I think I did it.

By the way, Autozone and other parts stores have tons of tools that you can “rent” for free by putting down a deposit.  Just “pay” for the tool and get a full refund when you return it within 90 days – it’s legit.  I borrowed a vacuum pump, leak detector and oil/dye injector gun for a deposit of $250 (since refunded).

My refrigerant refill rig.

My refrigerant refill rig.

Cable expense of $34 is our 50 mbit internet connection from the cable company.  You didn’t think we would waste money on cable, did you?

$23 in travel expenses represents the fees I paid for the privilege of paying my $1,250 tax bill by credit card.  The tax bill represents almost half of the $3,000 minimum spending required for my latest American Airlines Aadvantage card which will yield 50,000 miles (enough for a free flight to Europe in the off season or two domestic round trip flights any time).  More spending equals more free miles since there seems to be an endless flow of credit card offers with enticing sign up bonuses.

$12 in gas covered a partial refill for the Honda Accord before I delivered it to my nephew plus a gallon for our lawnmower.  I also filled up the minivan for $36 using an Exxon gift card purchased last year.

 

Year to Date Living Expenses

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At $22,530 year to date spending, we have exceeded the $20,000 budgeted for the first six months of the year by a few thousand dollars.  This includes the minivan purchase in March, so if we keep under spending our monthly $3,333 budget (like we do many months) then we’ll be back on track in a few more months.  I’m guessing by August or September we’ll be back on budget for the year.

July and August should be fairly low cost months since we’ll be traveling for half of each month on a road trip through the US and Canada and have already paid for all of our vacation lodging expenses.

Monthly Expense Summary:

Vacationing in our own town. Enjoying the free parking and free museums in downtown Raleigh.

Vacationing in our own town. Enjoying the historic buildings, free parking, and free museums in downtown Raleigh.

 

Net Worth: $1,566,000 (+$1,000)

Another month of gains (just barely).  Though the headline reads a $1,000 gain because of rounding, the exact increase was $258 for the whole month.  That’s still positive territory, right?

june-2016-net-worth

It’s hard to believe June’s finish line was so close to the starting point given the volatility throughout the month.  The day Brexit hit the markets, my portfolio was smashed particularly hard because of my asset allocation’s tilt toward 50% international investments.  The British pound dropped 7% overnight against the USD while other foreign currencies suffered fates almost as bad.  The stock indexes in the UK and Europe also dropped heavily.  Combine huge exchange rate losses with underlying market losses and your international investments hurt.  A lot.

I’m reminded how it feels to lose $70,000 in one day (almost three times what we spent in all of 2015).  I was pretty busy the day the markets crashed the most so I didn’t have time to babysit my portfolio.  It’s just as well since there’s not much to be done.  Eventual losses totaled $90,000 by day four.  In hindsight, my “do nothing” approach paid off once again since the market has mostly recovered since the Brexit crash.  Shrug, do nothing, collect dividends, and move on.

Cautioning attendees at an event in the Research Triangle Park to stick with long term investments a few days BEFORE Brexit.

Cautioning attendees at an event in the Research Triangle Park to stick with long term investments a few days BEFORE Brexit.  You would trust financial advice from a guy in shorts and sandals, right?

These market hiccups, burps, and farts are nothing more than distractions from a long term investment plan.  When they hit, the natural response is “how rude!”.  Then the gassy stink dissipates and we remember that the occasional expulsion of gaseous substances is a natural byproduct of digestion; a sign of a properly functioning system.

A new all time high net worth brought us within $500 of hitting the $1.6 million milestone earlier in June but we got knocked back a bit from that goal.  Maybe July will bring us to new territory?  In any event, I’m going back to doing nothing.

Times could be better, but they could also be a whole lot worse.  No complaints from the Root of Good family.

This guy is ready for summer 5x.

This guy is ready for a sunny summer 5x over.

 

 

Did you Brexit the market or stick it out through the slaughter?  Are you back in positive territory with your investments? 

 

 

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95 comments

  • This week is going to be a scorcher in Charlotte, reaching 100 for a couple days per my weather app. Great timing for your trip. Have a great vacation and thanks for the update!

    • Sounds like last year, when we bugged out in June to Mexico. I relished the opportunity to facebook brag to all my North Carolina friends how it was kind of chilly in Mexico City with the temps in the 50’s and 60’s and overcast and drizzly some days. 🙂

  • Looking good, Justin! $2,485 in expenses for a family of five is really impressive. And your dividend income is doing great, too. I know how you feel about blog income. It can really be hit or miss some months. That’s why I’m really working to diversify my streams of revenue. Have an amazing time in Canada!

  • Terrific details for all to consider Justin! I was interested to see the section about you selling your Honda and being just a one-car family. We are considering that too (and will have a mini-van). I think it will work out fine. Our internet cost double what yours does – but it is paid right now by a side gig. I’ll have to shop that when the gig comes to a close (in a few years hopefully!) Enjoy your trip – we are about a couple hours from Canada and it has been warm here too – nice breezes though! Beautiful summer!

    • We had a decent trial run of early retirement when Mrs. RoG worked from home for 6 months at the end of 2015 into early 2016, and we realized we never needed both cars at once that entire time. Maybe we’ll be wrong as our kids get older and we’ll buy a new car. A second car purchase is very likely in 5+ more years as our oldest reaches driving age. Though there’s a chance we can still get by on one car. Public transit isn’t horrible here as long as the destinations are along the bus route (we’re on the busiest transit route in the city and have service every 15 minutes).

      As for internet, I think the normal rate is $40 or $45 per month but I call every year to get it reduced. I think the most I would pay here is $70/mo for fiber internet, as that’s what AT&T charges for 1 gigabit fiber, and google fiber is coming soon probably at the same price point for gigabit service. Competition is good!

  • Nice job on the car. You are getting some serious AC skills.

  • I think one of the best benefits of retiring early is being able to attend the different functions for your kids. It is awesome that you got to attend their lunch on the last day of school!

    No leaving the market for me! My investment strategy is boring – I invest regularly and don’t touch it so it makes it easy during bumpy market times like that.

    Fantastic June! Normally we see our spending inch up in the summer but the fact you were able to keep it under your monthly goal is impressive!

    • The kids really enjoy it. I don’t think many other parents ever come in to have lunch on a routine basis, and the kids are always proud when we visit.

      Good job on the investing. Doing nothing is usually better than doing something.

  • Gotta love working on your own car. With the help of youtube, most jobs are easy. I did my BMW’s brakes for about $40. Wonder what that would cost out in town? speaking of German things, just got back from Bavaria and also Austria for the Sound of Music bike tour, where the weather was delightful. Maybe a bit cool even, as I had to wear a sweatshirt in the Hofbrau Haus. How’s the trip planning going, FUEGO?

    • Youtube helps this automotive novice knock out easy and even moderately difficult repairs. I’ve watched a friend do brakes, so I could probably handle it too (though I tend to leave maintenance of critical safety systems to the pros).

      Oh man, I’ve got to get to Germany for that cool summertime weather. Maybe it’ll happen summer of 2017.

      Our trip planning for Kentucky-Detroit-Toronto is going well. Toronto is loosely fleshed out and we’ll have 2 weeks to take it easy. We worked on Niagara Falls last night. Kentucky is caves and national park. Detroit is only one day, so we won’t have a ton of time to do much (and we may just lounge at the hotel pool and relax).

  • Every month I am so jealous that you don’t have a mortgage payment. It makes such a difference in your monthly spend. Due to your tax bill, our basic monthly expenses edge closer to yours (if we subtract our mortgage!). Some day ROG, I will beat you at your own game, ha, ha, ha (evil maniacal laugh).

    • Don’t get too Jolly there. 🙂

      The mortgage payment certainly helps. Very easy to cover our other core expenses with the occasional dividends plus sporadic blog income as we haven’t had to sell any investments (beyond harvesting those dividends).

  • We used the Brexit panic and added volatility as an opportunity to deploy more cash ($44K).

    I also just finished writing our Financial update (publishing next week), and we hit $400K in net worth this past month (we are stoked). We still have another ~ $1.2M to catch you 🙂

    But compared to June of 2015 we have picked up a robust $180,000 in net worth over the past year.

  • I don’t usually care as much for the net worth update posts on blogs but I always enjoy yours. I thinks its great how you put the effort in to fix things yourself when you could easily just pay for it. You and MMM keep me from taking the easy way out. With a little (or a lot) of effort, its surprising what you can do yourself for a fraction of the cost. For my old car, I borrowed the serpentine belt tool from Autozone and replaced the belt myself. Not that hard once you study it for a few minutes. I also like how you keep a close eye on even the smaller expenses. Avoiding those money leaks can really add up. I wanted to add some money during the sell-off but missed the dip.

    • I try. With this AC thing I was really tempted to throw up my hands and sell the car as-is or maybe take it to a mechanic and see if they could get it going on the cheap. I don’t consider myself particularly skilled at DIY stuff, but I can watch a number of youtube videos and that plus my basic understanding of engineering and physics gets me pretty far.

  • Another phenomenal month; congratulations to you and the family. Like yourselves, Brexit was a non-event to our investments, since I bought more fund shares during the Friday-Monday meltdown, and rode those and our other investments back up to higher levels than they were before the Brexit vote. I was telling people not to exit the market during the meltdown; hopefully people listened, which they probably did due to the short duration of the downturn.

    Added a Sam’s Club Visa card last month to complement my AmEx Blue (6% cashback on groceries) and USB H-D Visa (5% back on anything Harley-Davidson.) The Sam’s Club card gives 5% cashback on gas and 3% on dining out so it complements the others well. Waiting until later in the year to apply for another competitor’s card which will give me a $500 rebate upon spending $4000 in 90 days, which I will quickly knock down with things like the property tax bill.

    The gift card carousel has been great for us as well. I have another 3000 Kroger points to use this month due mostly to gift cards we purchase there for stores and restaurants we buy from anyways. That equates to $1 off 35 gallons each, for three instances or $105 on 105 gallons. I use them all by having plenty of gas cans in the garage to take the overage.

    Hope you continue to have a great summer. And the alfredo dish looked delicious, btw.

    • I wish I could use those Kroger Shell gas discounts but we just don’t buy enough gas to hardly make it worthwhile. A full tank on the minivan is about 16 gallons, so that’s potentially $16 (maybe $20-25 if I got some extra gas cans).

      The alfredo tasted better than it looks if you can imagine that. 🙂

  • I would completely trust someone in shorts and sandals lecturing on long term investments! That’s when you know they are retired and loving life!

    Enjoy the family vacation!

  • Hi Justin, just found your blog. I’m in your neck of the woods in Orange County, NC.

    I will be going back to read your story as I am shocked and so impressed your family of five is living on a goal of $3333 a month. We are a family of 5 also and not even close to that number. Amazing work to be retired already and able to do the things you do.

    • Well hey from just down the road!

      We paid off the mortgage so that helps us hit sub-$3000 months pretty routinely. I also found Orange County to be pretty pricey when we lived in Chapel Hill. Maybe outside CH/Carrboro it’s cheaper if you’re in the county. Raleigh seems much cheaper in comparison from real estate and taxes to groceries to restaurants to gas. Much more competition for just about everything.

      • We live in the more rural part outside of Hillsborough. Chapel Hill is indeed expensive. Our house was a foreclosure so it’s not too bad but not paid off either. 🙂

  • Nice update RoG. Lots of detail! Looks like smooth sailing through the year.

    I was curious about the various gift cards (Visa, and Lowes) with discounts mentioned in this post. Are those one-time deals, or can you get those all the time?

    I’m always curious when another 10% off is possible 😉

    • I’m also trying to figure out where the Visa gift cards came from. Nick, how do we get these? You mentioned you bought $100visa gift cards to save $10. Where did you get them? This is awesome especially considering that visa gift cards usually cost me $4.95 when I give them as gifts.

    • The Lowe’s deal was a $15 coupon through ebay on $75+ purchases. Some gift cards qualify. I found that deal through slickdeals.net (a site worth checking 1x per day if you’re into working some deals to save a few bucks here and there but beware as it can make you buy stuff you don’t need).

      The Visa GCs were from our local grocery store (Food Lion – mostly in the mid atlantic states I think). $10 off $50 gift card purchase, but the purchase fee is $4.95 per card, so I netted $10 on $100 worth of Visa GCs. They have that deal about once every other month on some sort of gift cards. Sometimes it is $15 off $100. The gift cards that qualify vary. I’ve picked up domino’s pizza, lowes, Visa/MC/Amex in the past through various promos.

      There are also gift card resellers like cardcash and cardpool (among others) that let you buy discount GCs at 2-20% off face value. Some great discounts for certain fast food and chain restaurants and department stores if you shop often. I’ve bought a lot of lowes/home depot GCs there, and also picked up some Carnival Cruise GCs last fall to pay $300 in tips on our cruise at 10-15% off I think.

  • Great stuff Justin. I’ve heard lots ppl saying that Raleigh living expenses are a lot cheaper than Vancouver and California, I can certainly see how by looking at your monthly report.

    • For most things, I bet it is a lot cheaper here. Real estate is probably the biggest area of savings. Plenty of decent $100,000 townhouses and condos and houses for $125,000 to $200,000 that would easily accommodate a family of 4-5. According to zillow my house is worth about $175,000 (after going up $30k the past several years!), though I’m skeptical it would sell for that much.

  • Do you find that applying for credit cards for the miles or points, lowers your credit score?

    I really want to get into this to be able to afford more travel for cheap.

    • Not much. Maybe a few points for an application, and that ding drops off the credit report after a while. We have dozens, possibly hundreds of cards and still have 800+ credit scores and have never had a problem getting more credit.

      Just be careful if you’re about to apply for a mortgage or refinance – a bunch of new credit apps could cause problems with your mortgage app or drive the interest rates up a little. Also if you’re getting a car loan.

      • You guys have hundreds of cards? Wow.

        Do they have annual fees? That kind of freaks me out, trying to keep that all in line without making a mistake.

        Hmm how much does it ding your credit? How long until it drops off your credit report? How many apps do you think would hurt you when getting a mortgage or car loan? We would love to move in a few years.

        What credit cards do you recommend getting?

        Have you been affected by Chase’s new 5/24 rule? Does that factor into what cards you are getting or in what order?

        • Hardly any have annual fees and those that do usually waive the fee the first year. I usually cancel before the annual fee kicks in during year 2.

          Ding on credit is minimal. A few points but it goes away. We have no problem getting new credit. If you plan on moving and applying for a mortgage in a few years, you are fine today, just lay off the new applications maybe 6 months before applying for the mortgage.

          The Chase 5/24 rule hasn’t limited our card applications so far, but I’ll have to pay attention since we do have some Chase applications planned this year and next. Just have to plan on getting other cards if I hit the 5 card limit before 24 months expires.

          Specific cards? Go for the big value ones – $400-500 per card bonuses are plentiful. If you want airline miles, find a card that will get you where you want to go. Cash or generic travel spending $: Barclay Arrival card or Chase Sapphire are pretty good. Hotel cards – I like Starwood Preferred Guest for Sheraton/Four Points/Aloft free hotel stays.

          • Good to know. I am still learning about this.

            Do you guys do a new credit card offer every month then?

            • Probably every 2-3 months. It takes that long to meet the typical $3000 minimum spending requirements since some months we don’t spend more than $1000 on credit cards.

          • Do you have a strategy for the cards you are going to apply for or do you just take advantage of the ones with the bigger bonuses?

            • No real strategy other than getting airline miles for programs we can use easily and cash for travel when we have those expenses coming up.

  • This is my favorite part of the month in the blogosphere – inspiration for us downshifting from the dual-income lifestyle (and associated spending levels) to FIRE-level expenses (smaller house, one car, no more preschool costs!) in the next year-ish. That grocery bill! And the Mrs. looks absolutely beautiful beaming with her free milkshake 🙂 Way to go!

  • Need to find some time to dig into all the travel hacking methods – feel like we are missing out!

  • Tip: Woot.com often has the replacement heads for sale, usually in packs of 12. Even with $5 shipping they’re less expensive than Amazon.

    • Very awesome, I’ll have to check them out. Is that for generic or name brand heads?

      I’m hesitant to try the generic replacement heads since reviews seem somewhat mixed on Amazon. Probably worth trying once though, right?

      I actually ended up getting 2 of the brush heads for free because they were marketed as “genuine sonicare” heads, and when we got them, they turned out to be very clever counterfeit knock offs. Philips didn’t really care when I contacted them and mentioned the seller has hundreds in his inventory. At least the seller refunded me the $ when I suggested he sold counterfeit goods to me.

      • The last ones I ordered are ‘Sonicare compatible’. I got 8 of them for $11.99. I was hesitant about going off brand but I’m using one now and they seem the same as the original.

  • I like that you even saved money during your birthday. Cool!

    • I saved money especially on my birthday. 😉 The kids were away for a couple days so we had a few “dates”. The starbucks is an easy walk a couple blocks down our street so we went there – a rarity I indulge in no more than a few times per year, and mostly to meet up with people who find me through the blog.

  • Congrats on both the auto repair and the overall month.

    I am very jealous of your 50mbps service for just $34. I pay $59 for 75mbps but next best option is $52 for 20mbps.

    • Our service used to be $58 for 15 mbps a year or two ago (though I always negotiated it down to $30-40/mo). So it’s a recent development, probably due to Google Fiber coming to Raleigh. $59 for 75 mbps isn’t horrible – it used to be a lot more than than for 75 mbps here in Raleigh a couple years ago.

  • I did some work on my car this month as well. My HVAC actuator was broken and making an incredibly irritating THUMP thump thump THUMP noise. 2 hours and $40 later, no more noises! Everything runs as smooth as can be and I impressed all my lunch buddies.

    • I don’t even know what an AC actuator is but I’m sure I could google it if it broke. 🙂 Congrats on saving yourself a possibly expensive repair bill at the auto shop. And establishing your DIY excellence among your coworkers. 🙂

  • I bought more w VGK, the Vanguard European stock ETF. It was a rough go today but long term I love 4% dividend yields with modest P/E ratios and a weak pound

    • That seems like a good bet. I’ve got VGK on my stock ticker/tracker screen at yahoo finance and it took quite a beating during the Brexit crash. I don’t do VPL/VGK anymore and instead buy VEA (total developed market I think).

  • Great work! I notice that the busier I get, the less time I have to “hack” my expenses and the more I spend.

    Interesting thoughts on “renting” equipment through Autozone. Perhaps one day I’ll get the nerve to do that.

    • Give the autozone rental tools a shot if you have the time and patience. Though if I were still working, I’d probably save the time and pay the auto shop’s going rate for repairs for anything complex.

  • A pretty amazing month…all in all….I still can’t get over how Hondas hold their value. Most 16 year old cars are worthless. Have a safe trip….

  • I bought some stocks after 2 days of BREXIT broke out. All of the purchases are in the money now. There may be more headwinds but who cares. What’s cheap is cheap right? These little habits helped us achieve $200K milestone of our financial independence journey just a couple of weeks ago. Started less than 2 years ago and I can already see growth is getting faster and faster. Why wait? right?

    Cheers!

    BeSmartRich

  • Looking good. It’s great to see your net worth reach all time high after retirement. Investing is awesome. It’s too bad regular people don’t know how it works. I picked up some value index fund when the market dropped. I still think we’ll see a bigger correction at some point so we are hoarding cash at the moment.

    • I’m starting to get enough excess cash reserves that I will probably dump some $ into the market if we see a nice drop. Good problem to have right?

  • Hey man you guys don’t spend much, congrats on that. Dividend income is awesome, as it should be way up there with 1.5 million bucks. I think I reduced the amount of purchases this past month compared to May. If you control spending, FI is only a matter of time away. Good luck.

    • I forget the source, but long ago I read something to the effect of “the best way to get what you want is to do nothing and see if it will happen on it’s own.” Kind of silly, but it stuck with me and I apply it to much of my life with great success including investing (wait out the market bumps and stick with a passive strategy) and work (let folks argue things out among themselves and only gently nudge things along when needed to reach the conclusion I think is right). A little Machiavellian in a way, but I usually find I can get the outcome I want without having to expend a lot of unnecessary effort.

  • I stayed in and deposited more into my IRA and my brokerage. Definitely already gained as a result.

    I hope you enjoy your vacation.

  • Ahh, good ol’ Brexit. Our portfolio (60/40) went down only 1.5% on the day when the pound plummeted to a 31 year low. And now we’re back up to where we were before the vote. The drop wasn’t steep enough to require rebalancing, but I’m sure there will be more buying opportunities going forward.

    Good job on sticking to your $3333/month budget! Most people don’t understand that you need very little to be happy. I’m glad we are aligned on this 🙂

    Excited to meet you guys when you come to Toronto! We’ve decided to push our Japan date back to Aug, so we’ll still be here when you guys come.

  • That’s a nifty trick with Autozone. Knowledge is power.

    I’m glad I stuck it out with Brexit and made no changes to my portfolio. Should have bought more but what can you do?

    Thank you for the update!

    • I knew you could borrow small, inexpensive tools, then I figured why not ask for the bigger expensive tools. I hate paying $100+ for a tool I’ll only use once and then have to mess with selling it or store it forever in my small shed. Free tool rental is way better!

  • Love the monthly expense/income updates. Your story is very inspirational and motivates us to keep going on our own FI journey. Thanks for sharing!

  • I’m like a Starbucks addict, had no idea they gave free stuff on your birthday though! Is that an orea frap? Looks delicious!

    • I signed up for the Starbucks reward program many years ago. There’s an app for it, too. I only spend a few bucks per year at starbucks, so I don’t think the bday reward is tied to meeting a specific level of spending during the year (other than perhaps at least 1 per year).

      It’s a java mocha chocolate chip frap I think. Basically a coffee milkshake with chocolate chips in it and whip cream on top.

  • I estimate our monthly expenses will look very similar to your once our mortgage is gone. I am very much looking forward to that day!

  • I love reading the specifics of your income/expenses! I’m 44 and have just started really paying attention to our dividend income. We currently have about $725,000 in investments, although I’ve foolishly been keeping a large chunk on the sidelines waiting for a really good buying opportunity. Even more foolishly, I didn’t deploy those cash funds at the peak of brexit so I’m not sure what I think a good buying opportunity would be. I read a quote awhile back that said, “It’s not about timing the market, it’s really about time IN the market”. Still coming to terms with how to fix this.

    We hope to retire at about 51-52. Our current net worth is just a bit below $1.2M and we have one house paid off. I’ve calculated that if we sell our main house and move to the vacation house we could make it on a 4% withdrawal rate but if we can do roughly 5 more years of working, we’ll be much more comfortable. I love reading about your situation though because it gives me hope that we aren’t too far away, although much older than you are.

    • I wish you luck deploying the cash on the sidelines. Timing the market is an extremely difficult task, and psychologically stressful given the amounts of gains or losses on the line.

      • Even “professionals” can’t time the market market right! something like 87% of actively traded mutual funds did not beat the index over the last 20 years…

    • Im in a similar situation where I have a good amount of cash on the sidelines that I still want to invest but have been waiting for the right opportunity. I was waiting for 1 more down day to put some in but that didnt work out. I figure any market timing I’ve ever done as only been about 30% successful. The other 70% hasnt been so much about losing money as about opportunity cost where I could have bought in at a better price point. I have some of the money going in automatically every month but thats not really fixing the issue of getting it invested. I agree with ROG that it can add stress and aggravation trying to time it right. The market always seems to do the opposite of what you expect.

  • Arrgo,
    I have put some of the money back in the market over time but probably should do as you are and automatically move money in over a period of time. I know people will say that isn’t necessarily a great strategy either but it seems more tolerable to me. The reality is that I already made the mistake of trying to time the market and now I am just hoping to minimize the lost opportunity cost going forward.

  • Is there a summary of your net wort allocation? We have about a million net worth, but mostly tight up in RE. I want to retire early. What steps should I take? current passive income only comes from cash flow from RE. but it is very small compared to what we need monthly.

    • I don’t have a good summary anywhere but I’ve been mulling a post dedicated to net worth tracking.

      Basically, it’s about $1.6 million right now. $140k is a house, and almost all the rest is investments in mutual funds and ETFs. Not much real estate in my NW other than 11% of the stock investments are allocated to REIT index funds in the US and abroad.

      As for retiring early – accumulate enough assets to allow you a passive income stream sufficient to fund your living expenses.

  • I like your pictures of Guanajuato. I am going to spend 4 days there during the next winter. We will probably rent a house when we are there. Thanks for the great pictures! You have inspired me to retire early and travel throughout Latin America!

  • Justin, Good progress. Your ER journey is an inspiration. Though this is my first comment, I have been a regular reader of your blog for a while. You were also an inspiration for me to start my own blog. Hope you find my posts useful as I have found yours.

  • Help, I make 34k a year gross income. I have 26k saved up for retirement. I’m 31. I am single and I rent an apartment. And I have health issues/spend over $1k a year for medical bills. I feel like retiring before 67 is unrealistic for me.

    • $26k for retirement at age 31 on a modest salary is still okay. Keep saving and investing what you can.

      There are two ways to save more: make more and cut expenses. Making more = getting a side hustle or part time job. Doesn’t have to be much. Even a few hundred per month will allow thousands per year in extra savings. Cutting expenses – same idea. Even a few hundred per month can give you thousands per year to save. Compound those savings over the next couple of decades and you might have enough before 67.

  • Two questions (sorry if you address them before)

    1. To clarify – the credit card fees that you are getting (for miles/points purposes) you clasify as ‘travel’ rather than ‘financial fees’ for example, right? I am currently putting them under fees but starting Jan I think I will move them to travel to see a ‘total cost of travel’ financial picture. I dont really track ‘how much it would have cost without miles’ as I would have just not made that expense (though it is still kind of fun to see how we took $15k flights for $300 bucks, for example) :).

    2. College – I think you mentioned before that you had already some money set aside for your kids. Is that outside your current total approx $1.5m or included? May I ask what your thoughts are on how much to contribute for each child and what vehicles to use for savings? Right now I am aiming at super funding 25k each on a 529 then was just going to put sufficient per eyar to get to about 100k each (in state tuition, about 75% or more in a decade plus). But I keep changing my mind about how much to put on 529 after those 25k for each, thinking through Roths (with laddering as I dont qualify by income) or even brokerage account investing instead for more flexibility….your thoughts?

    Thank you as always for so much detail. You have no idea how incredibly helpful and inspiring it is for those of still on ‘the path’.

    • 1. I split the fees out to “travel” when possible. Definitely the $95 annual fees or whatever on the few occasions where the annual fee isn’t waived. It gets a little murky with things like paying taxes on the credit card and paying a 2% fee. If it’s billed separately I’ll allocate the 2% fee to travel. Otherwise it gets lumped into whatever other category (like taxes). So I might have $306 in quarterly state tax payments instead of $300. I operate on the principal of doing the best I can in tracking expenses but not sweating the random $6 here and there as long as it’s going into the bottom line spending figures.

      2. We’re aiming to have 4 years of in state tuition and fees for each kid, and wing it for the room and board and books (scholarships, loans, grants, work study, PT jobs in HS and college, use our main portfolio as a backstop, etc). 4 years = $8,900 x 4 = $35,600 per kid, so just over $100,000 we need for college. Right now we have $40k or so in dedicated 529s and the other $60k will come from our other accounts. Our state no longer offers tax credits on 529, so I stopped funding it. I like the flexibility of taxable accounts since we’re unsure what college will actually cost for our kids.

      In terms of our investment portfolio, it’s sitting at just under $1.5 million right now, and I mentally set aside about $200,000 of it to cover the huge lumpy one time expenses like college, cars for kids, braces, “adult” gifts like part of a wedding or house down payment (undecided on what we’ll do exactly), etc. So we have somewhere around $1.2 to $1.3 million that I apply the 4% rule (or whatever number we use) to get our annual spending.

      • ah! yeah that makes sense. than you for your thoughtful reply! And yeah I hear you in the state not offering the tax incentive – that is partly why I struggle about this too as a savings vehicle…I am curious to see how we change this strategy as the years go by.

        About the portfolio – I am just still so amazed by your spending levels and still living it up. I have so much to learn on that front! We are tackling those spending habits next. We tool out the ones that were immediately easy – restaurants, cable, etc. but still have some work to do in other buckets. Baby steps.

        • Baby steps for sure. 🙂

          As for the 529, part of me expects my state to return to offering a tax credit, in which case I would continue to fund the 529 to scoop up that tax credit.

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