Looking in the Rearview Mirror
Here we are at the tail end of 2015. I wanted to pause and reflect on where we are today and what we’ve been up to during the year.
I started out 2015 with a post asking Should We Conceal Our Wealth? This post got a lot of social media shares because it addresses a concern that faces those who are accumulating wealth while trying to fly under the radar undetected.
Then I explained Why We Chose The Worst School In The District. At the time our oldest kid started kindergarten, it was the worst school out of over 100 elementary schools in our school district. If you know me, you know I’m all about taking calculated risks. Fast forward almost six years and it turns out our gamble paid off because the school made a 180 degree turn and is actually a very good school that has been recognized nationally. And it’s a leisurely ten minute walk from our front door.
I took a look at our Ten Largest Purchases of 2014 because you know how I love putting our spending under the microscope. Not surprisingly, the largest five expenses for the year were housing and travel related which closely matches our largest budget categories. The top expense was an $8,700 major home renovation that included new exterior siding, new windows, and a major roof repair. Fortunately we budget for those long term major house projects so it wasn’t a shock to the budget at all and we finished 2014 just slightly above our budget for the year.
In the article From Paper Boy to Engineering Manager to Early Retiree I shared every single job I’ve had and how much I made since receiving my first paycheck for $29.62 delivering newspapers when I was 13.
In Cost Effective Investing With Motif I explored the Motif investment service that lets you pick a pre-mixed basket of up to 30 stocks based on a particular theme (a “motif”) for a single brokerage fee under $10. They even offer $0 commissions on some baskets of low cost index fund ETFs which is why I find Motif’s service offerings particularly compelling for the style of investing that I prefer.
In My Version Of Financial Independence As A 17 Year Old I thought I had life figured out at age 17. Here’s how I was planning to reach financial independence before I really knew anything about reaching financial independence:
- Save up $120,000 by working extra shifts at a minimum wage job (you get paid time and a half for overtime!)
- Invest the $120,000 at my credit union in a CD earning 6% interest
- Earn $600 per month ($7,200 per year) from that CD
- Live on $600 per month forever
Glad I didn’t stick with that plan.
In A Day Of Early Retirement – Going on a Walkabout I showed how a mundane day of “doing nothing” can be incredibly awesome if you let it.
Then came Summer In Mexico: The Next Big Adventure. We spent seven weeks in Mexico traveling with three kids. And everyone lived to talk about it. I shared our $7,668 trip budget and cost saving tips in The Cost of Seven Weeks in Mexico (And How to Minimize it). We ended up spending only $4,450 of the budgeted amount as it turns out (but still had a lot of fun). We saved a ton by using airline miles and hotel points from credit card sign up bonus offers.
All other posts on our Mexico trip:
- Safety and Security in Mexico
- The Start Of Our Adventures in Mexico
- Exploring Guanajuato, Mexico
- Eating Our Way Across Mexico
- The Gear Post: What We Packed For A Seven Week Trip With Kids
- Retiring Abroad – Could We Do It?
As we walked out our front door and down the sidewalk to start our seven week adventure in Mexico, I reflected on What Will We Miss About Home While On The Road.
To get back to serious early retirement finance topics, I revealed exactly how we’ll spend our 401k and IRA funds decades before turning 59.5 without ever paying a penalty in Climbing The Roth IRA Conversion Ladder To Fund Early Retirement. This is another very popular post at Root of Good.
Next up was another hard hitter where I showed the optimal income levels to maximize health insurance subsidies under the Affordable Care Act with caveats about making just a little bit too much. Don’t Fall Off The Affordable Care Act Subsidy Cliffs.
Those new to the blog might not realize that Mrs. Root of Good is still working. She took a paid three month break this summer as I discussed in The Sabbatical – A Mini-Retirement. That’s how we were able to take off for seven weeks to bum around Mexico. She also spent the month of May at home chilling with us.
In The Early Retiree’s Weekly Schedule I broke down how I spend my time during a typical week. Some folks aiming for early or traditional retirement are really scared of getting bored when they ditch the job that sucks up 40 to 70 hours of their time each week. Here’s how I spend my time to stave off boredom:
- Work – 13 hours
- Physical Activity – 18 hours
- Fun – 35.5 hours
- Social – 7.5 hours
Next up was a guest post from John C who blogs at Action Economics. John told us about his Semi-Retired Summer. He works mainly during the fall and spring in seasonal nuclear power plant maintenance, and enjoys mostly work free summers and winters. He also has more kids than I do, and a lot of his summer was kid-related.
I shared Why Dropping Out Of School Was A Great Choice For Me. After finishing law school, deciding not to practice law, and then working in engineering for a couple years, my employer asked me to go back to school to earn a master’s degree. That was a poor choice in hindsight, and I wisely dropped out of the master’s program before spending any more time pursuing a degree that wouldn’t have helped me very much.
In Should Our Family Drop From Two Cars To One? I questioned our continued need for two cars since I’m not working and Mrs. Root of Good is slowly leaving the workforce. We still haven’t made any moves to drop to one car but I’ve been thinking more about it lately.
In Celebrating Two Years of Early Retirement, I look back at my first two years of early retired life and finances. In addition to the big Mexico trip mentioned earlier, we also took a major road trip up the east coast of the USA and into Canada during the summer of 2014 to take advantage of Mrs. RoG’s paid five week mini-sabbatical.
I don’t talk about investing a lot here at Root of Good simply because I don’t spend much time in my own life managing my investments. Passive index funds just don’t require a lot of daily oversight. But I did happen to log on to the computer right as the market opened on August 24, 2015 and took advantage of The Mini Flash Crash of 2015, or, How I Made $5,000 in 30 Minutes. Dozens of exchange traded funds were trading 25-40% off of fair market value so I bought everything I could with my cash on hand before the deals vaporized not long after market open.
I show how we save hundreds of dollars by completing DIY projects ourselves instead of hiring them out in How To Save $375 On Air Conditioner Repair in Two Hours. Pretty simple stuff to check if your AC stops working.
In Mrs. RoG’s First Attempt at Early Retirement you find out about the fantastic deal Mrs. RoG worked out to keep her full time pay while working four days per week from home. She actually submitted her resignation in September 2015 but the employer’s counter offer was good enough to retain her (for a while).
In addition to self-paced slow travel trips to places like Mexico and Canada, we also enjoy cruises. A lot. And we always get ridiculously good deals on cruises. In this four part series I reveal all I know about cruises and getting the best deals. And there’s a gratuitous food post for those that enjoy eating.
- Going on a Cruise Part 1 – Overview
- Going on a Cruise Part 2 – Getting the Best Deal
- Going on a Cruise Part 3 – Save on Board and on Transportation
- Going on a Cruise Part 4 – The Food!
With Zero To Millionaire in Ten Years I almost broke the internet. That post went viral, received around 500 social media shares, and got picked up by Business Insider where it’s been viewed almost a million times. To me it’s nothing particularly noteworthy – just the story of us saving half or more of our fairly ordinary (for college graduates) salaries for ten years which brought us to millionaire status and Financial Independence.
To answer some questions and clarify some points raised in that article, I followed it up with How We Reached Financial Independence In Our 30’s. I showed in more detail exactly how we’re able to save half or more of our incomes (hint: low expenses on housing and cars plus low taxes). And I addressed the question of whether our lifestyle sucks. You’ll have to read the full article to find out what I think.
In order to answer another common complaint about early retirement, I pulled together How Early Retirement Affects Social Security to examine the specific impact of retiring after just a decade or two of full time work. If you don’t really understand how the Social Security benefits formula works, then it might be a surprise to find out that retiring early doesn’t reduce your benefit nearly as much as you would think. I’ll be receiving a little over $1,000 per month from SS. If I worked an extra 30 years I could double my monthly benefit. No thanks!
For Thanksgiving, I celebrated with Tis the Season of Thankfulness. I’m thankful for all the ordinary things everyone else is also thankful for: health, family, and friends. I also call out all the incredible technological advances we enjoy today that we didn’t have not too long ago. I’m also thankful for political stability here in the US (and most of the rest of the developed world). It’s a lot easier to plan for the long term when you don’t have to worry about imminent threats of civil unrest and violence, a fact we take for granted.
If you get bored or inquisitive and have some free time head over to the Root of Good Archives where you can find all of my posts since I started this blog in September of 2013.
Update on our 2015 Financials
We enjoyed an $88,000 increase in net worth for the year through November 30, 2015 ($1.437 million at the end of December 2014 versus $1.525 million in November 2015). A rough start in December has lowered our net worth, so there’s a chance we’ll end the year close to where we started the year.
Our expenses have been very moderate, with spending of only $21,436 through November 2015 compared to our $33,400 annual budget. I publish a detailed accounting of every expense we incur, and you can see all of those financial updates here:
- January 2015 – $2,548
- February 2015 – $903
- March 2015 – $2,443
- April 2015 – $4,549
- May 2015 – $849
- June 2015 – $3,089
- July 2015 – $498
- August 2015 – $1,701
- September 2015 – $927
- October 2015 – $1,015
- November 2015 – $2,954
We use Personal Capital to track all of our expenses and income (review here), and it does a great job with very little input from me. For free. You can say I like it a lot. And it’s pretty. Personal Capital also does a great job tracking and integrating all of my investments at multiple brokerage firms.
Where are we headed?
In 2016, I expect Mrs. Root of Good to finally cut ties with her employer and join me in early retirement. The exact timing isn’t set yet, but you’ll know when something awesome happens. Maybe they will double her pay and cut her to two days per week and she’ll work another year (I hope she didn’t read this far down the article).
We don’t have any big plans for the summer of 2016 yet, and it might be one where we mostly stay at home other than a few small road trips. Or we might hop on a jet to a different country on the other side of the world.
2016 will be an exciting year here on the blog. I’m planning to have posts on:
- different choices for withdrawal rates
- our updated and expanded budget
- a series on retirement calculators
- how to optimize college savings and approach student loans
If you want to see anything else on Root of Good, let me know in the comments!
With that, I’ll close this article by wishing everyone a Happy Holidays, Merry Christmas, Kwanzaa, Hanukkah, Festivus and/or a Happy whatever other holiday(s) you celebrate. Root of Good is taking a couple weeks off to tirelessly pursue the goal of doing a whole lot of nothing. See you in January 2016!
How is 2015 treating you? Did you have any turning points in your life this year?