May 2015 Financial Update
May has come and gone. Financially we are much better off with a huge amount of income during the month and only a tiny bit of spending. Our net worth continued its upward march and currently sits at $1,550,000.
In one week we leave for our seven week summer trip to Mexico, where pesos are cheap and the tequila is strong. The favorable exchange rate combined with generally low prices in Mexico should let us continue our low spending ways in June and July (especially since we have already pre-paid all lodging expenses for the trip).
May didn’t offer a lot of investment income, with only $46 of dividends and interest. June should treat us a lot nicer since our funds pay out at the end of each quarter. These June dividends will be really sweet because we’ll be thousands of miles from home living it up while we still have a fire hose of truly passive income flowing into our accounts.
Blog income, shown as “other income” in the chart, dipped to a very low $286 in April but roared back in May at $6,569 for the month. This is due to receiving two months worth of income in one month and a steady uptick in traffic throughout 2015. June will also be a very good month for Root of Good income, although I won’t get any paper checks deposited till July or August since we’ll be out of the country and not opening any mail. Good thing I don’t need the cash immediately!
Freelance writing income was $250.
I expect to make around $600-800 per month over the long term from blogging and freelance writing. Year to date, this income source is running closer to $2,400 per month so I might have to adjust my expectations upward. But summer is usually the slow season for blog traffic and revenue, and I might not be posting as much while I’m on vacation.
The “deposits” income is $21 for cash back rebates from the Ebates online shopping portal. I’m all about sharing the wealth, so if you sign up through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card. I got a $10 Walmart gift card very quickly after making my first purchase using the same promotion. I love me some cash back portals because they effectively offer an extra discount of a few percent on top of credit card cash back, coupons, and sales at common online retailers where I already shop.
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).
At $849 for May, we significantly under spent our target of $2,700 per month (1/12th of our $32,400 per year early retirement budget) by almost $2,000. That’s in spite of prepaying some utilities to meet the spending requirements on credit cards (to get massive sign up bonuses!).
Travel expenses of $232 made up our highest category of spending for the month. We spent $200 to reactivate Mrs. Root of Good’s United MileagePlus frequent flyer miles that I negligently allowed to expire last year. That’s a small price to pay for getting back the 88,000+ miles that expired (= a free round trip to pretty much anywhere in the world). It would have cost $500 to reinstate them under normal conditions, but they offer a special “credit card challenge” that basically requires you to sign up for the Chase United Mileageplus Explorer card and pay “only” $200. A side benefit of being “forced” to sign up for this card was the 50,000 bonus point offer. The life of a credit card hacker…
The bulk of the expense for our Mexico trip has already been paid in the past few months. We projected the total cost for the seven week trip at $7,000 to $8,000 (full trip budget). We had to spend an extra $32 in May to find a new apartment for our two weeks in Mexico City. Our previous booking cancelled on us at the last minute, so we had to scramble to find something. Most of the inexpensive places were unavailable at the last minute, however we found a nice two bedroom apartment one block from the subway station for only $32 more than our previous booking. Airbnb treated us right and offered an additional discount for the trouble of the last minute cancellation. In some ways, this new apartment is an upgrade so probably worth the $32 extra cost. You can also get $25 off an Airbnb rental using this link.
Our utilities came in at $180 for the month. I prepaid our water bill a bit so we hopefully won’t owe anything while we are away. I also wanted to meet our $2,000 minimum spending requirement on the Chase United Mileageplus Explorer card before we depart for Mexico so we can get the 50,000 bonus points (= how we fly for free). Check out all of the current credit card deals if you want to cash in on free travel too!
Grocery expenses were well below average because we were busy cleaning out our refrigerator and freezer so my house sitting brother in law will have room for his groceries in our fridge. We simply didn’t buy a whole lot at the grocery store other than fresh fruit and vegetables.
To round out our tech gadget purchases for our Mexico trip, we bought a third Kindle Fire HD 7 (4th generation, 2014 edition). We picked up an 8 GB model for $65 on ebay. It looks brand new and is about half the price of a new one at Amazon. One of the tablets we bought in April died but was still under the 30 day warranty from the ebay seller so it’s currently in the return process that will hopefully result in us receiving a new (used) tablet in the next week before we leave on our trip. Otherwise one of our three kids will be very very bored at times. As I mentioned last month, we’re really pleased with the tablets and the interface. Not bad for a Netflix/youtube player, an e-reader, a gaming machine, and a videochatting device that cost $70 or less.
Dining out was $58 which was mostly a bunch of take out pizzas for the family.
I returned to my DIY roots and fixed our air conditioner for $25 (included in Home Maintenance). The AC was coming out of the vents but it wasn’t cool at all. I checked the outside compressor and it was sitting there in the sun not moving at all even though the indoor temps kept climbing and the thermostat indicated the AC should have been running. I jumped on the internet and youtube and after about an hour of watching and learning, I figured out it was probably a failed capacitor on my compressor unit.
The fan would run when I “stick started” it (literally using a stick to spin it around a bit until it starts). I pulled off the controls/electronics cover on the compressor unit and noticed the tell-tale sign of a bad capacitor. The top of the capacitor was bowed out in a wonderfully convex shape. Wonderful in the sense that it meant a cheap and easy fix to my AC problems! Just not a quick fix because it was Sunday and none of the local industrial supply houses are open on Sundays.
But first thing Monday morning we were out the door on a four mile round trip hike to Grainger Industrial Supply to pick up this beautiful brand new 45/5 microfarad, 370 volt capacitor. It was $25 but available immediately at Grainger, whereas the same part at amazon was only $10-15 but wouldn’t have arrived for a week or so.
With temperatures forecasted in the 90’s for the week, I quickly found our family’s price for comfort. About $10.
Soon after realizing my price point for cold air, the thrifty Frugalwoods folks published an article bragging about not using their air conditioner yet. Of course they are five hundred miles north of us in Boston – the city that still has a three story pile of snow from winter road scraping. I wouldn’t need AC either if I lived next to a three story snow mountain. I’m smiling as I write this because our winters here are awesome enough that it’s worth a couple months of heat and humidity in the summer. And hey, Raleigh is some cheap living too!
The couple of hours I spent troubleshooting and repairing our AC unit saved us $200-300 versus what an AC repairman would charge. And now I know how easy it is to pop out a blown capacitor and replace with a new one (10 minute job if you have the spare part handy).
Closing out the spending report for the month, we spent $46 for two pairs of athletic shoes for Mrs. RoG and one of the kids. They match. And they also wear about the same size shoe. It’s hard to trot the globe in worn out shoes, so I could almost classify this expense under the “travel” category if I wanted to get really creative. But I don’t.
At $11,295 year to date spending, we are a couple thousand dollars under the $13,500 budgeted for the first five months of 2015. Our spending for the year as a whole should be roughly within our budget and possibly below budget as long as no major unexpected expenses pop up later in the year.
Monthly spending for 2015 to date:
Net Worth: $1,550,000 (+$17,000)
We just finished up month #3 as proud members of the $1.5 Millionaire Club. The duties of membership are quite rigorous but so far we are managing these burdens in a conscientious manner.
Every month it feels like we’re at the top of a bubble that’s about to deflate and then the month ends and we’re still wealthier than we were last month. It won’t continue in a relatively straight line forever, so perhaps June will be that month that looks like a bump in the road a few years from now (but feels pretty ugly as we experience it in real time).
That’s not a forecast or a market call, just a realization that in the history of the markets, there are ups and there are downs. We’ve had a healthy dose of ups lately.
We spend so little that a $17,000 gain (or loss) doesn’t really impact my perception of whether we’ll be able to keep living our current lifestyle next month or next year. I don’t think we are likely to run out of money any time soon, so I’m not obsessing over huge short term gains (or losses) in the stock market. Wealth is created over the long term.
How did you do in May? Still riding the bull?