May 2016 Financial Update

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May proved to be another good month financially for us.  Our net worth continued its upward march with a $13,000 addition, bringing total net worth to $1,565,000.  Our income ballooned to $10,826 while our spending increased slightly to $2,979 to almost match our monthly spending target.

Summer sneaked up on us this year.  The hot, humid air that just appeared in North Carolina is a reminder that spring is no longer with us.  Fortunately, we’re escaping the heat by heading north to Canada for a couple of weeks.  Our kids have four more days of school before they are out for the summer, which means us parents get to sleep in seven days per week.

Now for the May numbers!

 

Income

May investment income dropped to just $59.  Since our portfolio is all funds and ETFs that pay dividends quarterly or annually, the months of March, June, September, and December are big for dividends.  We should receive a few thousand dollars during the month of June.  In 2015 we earned a total of $28,527 in dividend income.

Blog income, shown as “other income” in the chart, was well above average at $8,950.  This represents two months of payments from a large advertiser, which means June might be an abnormally low month for blog income.  My early retirement lifestyle consulting brought in $503 in May, more than doubling the revenue from March and April.  I’m still aiming to live off of four percent of our portfolio but this month’s blog income and consulting income way more than covered our living expenses (and total year to date blog/consulting income almost equals year to date spending).  I’m still not convinced that the blog income is a reliable source of funds indefinitely, but it looks like it’ll remain strong in the near term.

Tax income of $640 is our federal income tax refund.  I asked the IRS to apply the refund toward our 2016 income tax liability and they screwed up (which might cost me a little due to underpayment penalties as I file quarterly estimated income taxes).  Before 2016 I didn’t include income tax refunds or income tax payments in these expense reports, but now that we are both retired, I’m including tax payments and refunds as expenses and income since they are included in our $40,000 annual retirement budget.

Travel income of $394 is part of the Barclay Arrival card $400 sign up bonus.  It’s actually 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.  I’ll charge another $100 payment for the cruise and reimburse myself using my last 10,000 Barclay Arrival reward points.  Right now I’m working on meeting the minimum spending requirement for a Citicard American Airlines Aadvantage card for another 50,000 AA miles.  Don’t miss out on travel hacking your way to a free trip.

Deposit income of $279 comes from the cash back rebates from the Ebates.com and Mrrebates.com online shopping portals. 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 like I did.  I try to do all of my online shopping through one of these portals and the cash back adds up fast.  I finally 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.

may-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 May expenses:

may-2016-expenses

We almost hit our target budget of $3,333 per month (or $40,000 per year) in May with $2,979 of spending.

The biggest expense this month was our home, auto, and umbrella insurance policy premiums coming due for the year, totaling $1,022.  We pay:

  • Home policy – $589 per year
  • Auto policy – $272 every six months
  • $1 million umbrella policy – $162 per year

Grocery spending was slightly higher than average at $601 for the month.  We stocked up on some staples at the twice per year sale at our Food Lion grocery store ($0.25 off all store brand items), so that pushed our monthly grocery bill up a bit.

Pork shoulder on sale at the grocery store? Why not make eastern NC style pulled pork BBQ?

Pork shoulder on sale at the grocery store? Why not make eastern NC style pulled pork BBQ?

Home maintenance was a big spending category in May.  I had to call a plumber when a routine drain cleaning (pulling off the P-trap to remove a clog) went sour.  I twisted the pipe leading into the wall drain too hard and sheared the pipe in two.  Then I couldn’t get the pipe out of the wall drain.  Eventually I gave up and paid the $89 our neighborhood plumber charges for a house call (even though it took him all of ten minutes to remedy my botched job including going slowly and showing me how to do it right next time).  My first big DIY fail in a while.

It wasn’t a complete bust though.  He explored inside and underneath the house and provided some good tips on other plumbing issues I have (such as the busted pressure reducing valve in the crawl space).  I also got a quote for replacement of three toilet shut off valves (the joys of owning three toilets…) and the hot water shut off valve in the kitchen.  The 44 year old original valves that came with the house were worn out and wouldn’t shut off completely.  The plumber came back a few days later and charged $225 for replacement of those four shut off valves, three of which required a blow torch – something I’m not skilled at.  Not a bad price to remedy what could be a huge inconvenient mess without operational water shut off valves.

He also quoted $269 to replace the pressure reducing valve or $389 to replace the PRV and relocate the main house shutoff to the other side of the crawl space where I could shut off the main water supply by simply reaching an arm into the crawl space.  After researching the PRV assembly I realized I could easily remove the PRV and install a new one since it’s a matter of unscrewing the old PRV and screwing on the new PRV then tightening the bolts holding the PRV on.  I found an exact match for the old valve, a Watts 3/4″ Pressure Reducing Valve for only $72 at Amazon, so I saved almost $200 versus the plumber’s quote for parts and labor.  I also had to buy 12 and 18 inch adjustable wrenches for $12 total to complete the job.  Without doubt, those wrenches will come in handy the next time I work on the plumbing or the car (that’s June’s DIY project).

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The 44 year old pressure reducing valve I pulled out.

A quick note on pressure reducing valves.  If you are on municipal water service, you receive water at whatever the municipal system provides it.  In my case, my water pressure was 110 psi.  That’s almost double the 60 psi recommended for houses.  High water pressure can cause leaks or damage toilet fill valves, faucets, hot water heaters, and clothes washers.  High water pressure also leads to higher water use since turning on a faucet “full blast” (as my kids love to do) leads to a much higher flow rate.  The pressure reducing valve limits the pressure coming from the municipal water supply to a level that’s manageable for common household plumbing fixtures and appliances.

After installing the pressure reducing valve, we immediately noticed the extremely noisy toilet fill valves became barely audible.  We no longer hear the hiss of the ice maker refilling.  Water pressure in our sinks and showers is still adequate.  In hindsight, high water pressure explains all of our busted garden hoses that exploded or started leaking, the cracked fill valve on our dishwasher, the water hammering, and the hard to fix leaks from plumbing fixtures.

I’m glad I called the plumber since the pressure reducing valve was an issue that I didn’t know existed.  It makes perfect sense in explaining the occasional plumbing issue we’ve experienced over the years.  I’m hoping to experience a noticeable reduction in our water bill.  At the least, we’ll save money on repairs, extend the life of appliances, and enjoy quieter water throughout the house.

You don’t have to spend $89+ on a plumber to check your water pressure.  Water pressure gauges are extremely cheap.  This one is $9 at amazon.  Buy it and screw it onto your hose connection outside your house or to your clothes washer cold water connection.  If it’s over 60 psi, you may want to look into a pressure reducing valve.  You may not have one, or it may have failed over the years.  The PRV is usually located at the beginning of your clean water plumbing where the municipal supply comes into your house.  If you’re on well water you may not have a PRV (I’m guessing).

Home improvement 101 is over.  Back to my financial update.

Rounding out the home maintenance expenses was another $50 for some weed killer spray, fire ant killer, and some plumbing supplies to replace the faucet for the kitchen sink (my next plumbing DIY project).

diy-roof-repair

Another DIY project in May. Repairing the leaking roof vent pipe flashing.

The $394 travel expense was discussed under “Income”.  It’s another payment toward our December 2016 cruise and I used Barclay Arrival card reward points to pay for the $394 cruise expenditure.

$132 for utilities is our natural gas bill and our water/sewer/trash bill from the city.  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.  Unfortunately I haven’t figured out a cost effective way to eliminate electric bills completely without dropping tens of thousands on a solar panel array.

Healthcare spending totaled $131.  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 $6 was our share of the biopsy from Mrs. Root of Good’s minor surgery on her arm last month.  The biopsy was negative as expected, so no worries!

Gifts of $114 included $90 in cash to our son for his birthday.  That’s the main way our kids get spending money right now.  Mrs. Root of Good and the oldest daughter are assembling photo books to give to her fifth grade friends as they part ways and head off to different middle schools.  We spent $24 for photo prints for that project.

A gift for my neighbor. Assembled her Gorilla garden cart.

A gift for my neighbor. Assembled her Gorilla garden cart.

General merchandise of $52 was a run to Walmart for miscellaneous stuff around the house.

Entertainment expense of $38 includes a $1 computer game for me and $37 to pay for the rest of the year for our half of the family Netflix account shared with my parents.

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?

Not shown on the expense summary graphic (but included in total monthly expenses) are:

  • $17 on restaurants – $10 for donuts, $6 of Chinese dumpling take out, $1 Outback steakhouse blooming onion
  • $12 for automotive – 2 cans of r134a refrigerant – oops, another DIY fail – more on this next month!
  • $4 for electronics – random USB cables for the kids’ tablets; they consume cables routinely by being rough on them

And that’s how you live an okay life on just under $3,000 for one month!

Free 15 cubic yard load of white oak hardwood chips. Tree companies routinely give this away for free. Just call them.

Free 15 cubic yard load of white oak hardwood chips. Tree companies routinely give this away for free. Just call them.

 

Year to Date Living Expenses

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At $20,044 year to date spending, we have exceeded the $16,667 budgeted for the first five 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 we’ll be back on budget for the year.

I don’t expect any large expenses in June, so there’s a good chance we spend well under our $3,333 monthly budget.

July and August should be fairly low cost months too 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:

In case you think all I do is DIY. I also "volunteer" (which is more fun than work).

In case you think all I do is DIY. I also “volunteer” (which is more fun than work).

Net Worth: $1,565,000 (+$13,000)

The headline number keeps going up and up.  Every time it does this I expect it to drop the following month because that’s how it goes – up and down, up and down, like a ride at the fair.

may-2016-net-worth

I just celebrated my 1,000th day of early retirement at the end of May.  During that nearly three year period, our net worth has increased by a few hundred thousand dollars.  I’m not expecting that to happen over the next three years since Mrs. Root of Good is no longer working.  However, if the blog and consulting income remains the same as it has been over the past year, we will only have to dip into our investment portfolio a tiny amount to fund our living expenses.

No matter what, I don’t think we will run out of money in early retirement even if my blog income dries up completely.  We’re spending a very conservative 3-4% of our portfolio value each year, which should last us indefinitely.  In the worst case we would spend most of our portfolio by the time we hit our 60’s at which time we would start drawing our $24,000 per year Social Security benefits.

Potential encore career if this whole early retirement thing doesn't work out.

Potential encore career if this whole early retirement thing doesn’t work out.

Now it’s time to get back to enjoying the freedom of early retirement.  And the carefree days of summer are a perfect symbol of that early retirement spirit!

 

 

Still riding the market up, up, and up?  How did you do financially in May?  

 

 

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100 comments

  • Nice job on May! Even if the blog never becomes a reliable source of income, strong months like May make it a little easier to leave money in the market to compound for longer!

    You look like a natural in teh astronaut suit. I think it is a perfect fit!

    • The weightlessness makes me queasy so I’m unfortunately probably not a great candidate for astronaut service (not to mention the physically demanding element of it!)

  • Pretty nice month and solid blog/consulting income! Definitely sounds like it was worth having the plumber over, using a blow torch would be a recipe for disaster for me! Thanks for the update.

    • I don’t regret it, though I felt silly after seeing how he muscled that pipe loose. I didn’t have the pipe wrench (I do now though!) and didn’t think about crawling under the sink to get better leverage on the pipe. At the end of the day, I got that pipe problem and all the busted shutoff valves fixed for just over $300, and it’s in my long term house repair budget, so I can’t complain too much.

  • Thanks for sharing such detailed posts. Being able to really “zoom in” and see where money goes is really powerful. We are DIY folks ourselves for the most part (although we do know when to call in help!) I am really trying to educate myself much more on investing/dividends, etc. as we have been on “auto-pilot” on this for many years (and an expensive pilot…) Time to get more reading done!

    • Number one rule – keep it simple. Come up with a reasonable asset allocation, figure out the cheapest way to buy those funds/ETFs that you need, and buy them! Then you get to sit back and rebalance occasionally.

  • I think its great the amount of DIY you do even with your net worth where it is. I try to do as much as possible myself also. Some things arent that hard to do with a little effort and it seems silly to pay someone like $300 to fix something when you could buy a part for $20 and fix it yourself. Part of my motivation is you never know when things are going to change. One of my sayings is “Things are good and we need to keep it that way.”

  • Wow, great May. That’s some really serious blog income!

    What are you going to do with those oak wood chips?

    Don’t get discouraged by all the DIY difficulties. That kind of thing happens to me all the time!

    • I have the same wood chips question :). Great post! I look forward to these every month.

    • Fill a big ditch right behind the wood chip pile; landscaping ground cover for some planting beds; burn some; let kids climb on it; give some away to family, friends, and neighbors.

  • Wow! Living the dream Justin! Your blog income is killing it, Even at half what you brought in this month you are still well above yearly expenses. May was a rough month for us on the financial side, Mrs C’s van died and we had to replace it (with cash of course).

    • Yeah, buying a new(er) car will do that to you. 🙂 We’re hoping the current minivan lasts us till the oldest graduates high school (7 years).

  • Still looking pretty solid ROG! We had to call a handyman our to fix our clothes dryer this month. Mr. TJL “watched” him real close though so we might be able to fix stuff like this in the future. Turns out it was three beads and a rock stuck in the drum…kids.

    • Just a quick note – there are some great videos on YouTube on fixing things like dryers. My husband was able to take ours apart after watching a few videos (they only have a few parts) and he ordered the parts and fixed it for about $30.

      • Agreed. When my dryer belt broke and I bought a new belt off Ebay for $5 then watched a Youtube video that showed me how to fix it.

        • That’s great. I think washer/dryer repair are the “low hanging fruit” of the appliance repair world. And usually you can get by for a week or so with your washer or dryer out of service (finish the wash at a laundromat or at family/friends; air dry the drying).

    • So far I’ve avoided appliance repairs by DIYing from watching youtube videos. Washer and dryer stuff is usually very easy. Our dryer thermal shutoff has burned out a couple of times (usually caused by poor air flow from a clogged filter 🙁 ), and that means a $5-6 part from ebay, 30 minutes to pull out the dryer, take off the back, replace fuse and thermal cutoff, reassemble.

  • Tough luck on the pipe break, I haven’t had a DIY fail in awhile, but they have happened in the past – I have heard that some people accidentally flip the kill switch on their furnace and get charged for the full hour to have the repair man come flip it back on

    Blog income supporting your family has got to feel pretty good – our May was pretty good, debt went down and net worth went up!

    • The plumber felt sorry for me I guess because he talked himself down from $114 ($89 + parts I guess) to $99 to $89. He threw in the parts and supplies for free (though I doubt the p trap kit and supplies were more than $10-15 at Lowe’s and maybe less at a wholesale plumbing supply in bulk quantity). He knew I knew enough about plumbing to know the fix wasn’t more than a 10-20 minute DIY fix if everything went well.

  • Good tip on the free mulch. I just filled out a form on this site – lets see if something actually comes out of it: https://freemulch.abouttrees.com/#!/home

    • Hope that works. If not, ask around for a local tree company and call them. Most places are dying to ditch those wood chips (at least here in the heavily forested Raleigh area with tons of trees).

  • The markets were kind in May. We spent a week in and around San Francisco without blowing the budget, which I wrote about last week, and Part II comes out tomorrow).

    It’s great to see your wealth only grow in retirement. I hope to create a scenario that makes a similar outcome likely for us as well.

    Cheers!
    -PoF

    • I’ll have to check out the “SF on a budget” because my impression is that it’s crazy expensive. My facebook friends out there share their drinking and eating at restaurants and the prices appear to be double what we pay in Raleigh ($4 tacos instead of $2; $8 for a microbrew instead of $4).

  • Justin,

    Nice, looks like you are keeping busy, which is awesome. Giving back to your community is something admirable.

    I particularly enjoyed the part where you are talking how you have three different streams of income for retirement:

    1) Dividends and Capital Gains
    2) Your Blog income
    3) Your SS income in your 60s

    Of course, in some cultures and in some ages, the children were expected to take care of their parents in old age. So you have that portion covered as well 
    Dividend Growth Investor

    • The multiple income streams have worked out nicely, and very unexpectedly in the case of blog income. I never anticipated making anything significant from the blog, and never even thought about the early retirement lifestyle consulting gig until many folks kept asking me about it.

      And knowing we’ll at least be living well above the poverty level in our mid-60s with SS helps us feel more free to spend our 4% per year today.

  • Congrats an a fantastic earnings month. You blog revenue is very impressive.

  • Lots of good DIY projects!
    I recently did some soldering on copper pipes with a blow torch for the first time and it wasn’t a big deal. I may have singed some drywall, but overall, it was fine.
    I was a little intimidated at first, but after doing it, I now have much more confidence to do it again. Next time I encourage you to try it yourself.

    • I might give it a try. In this case the toilet shutoffs were in very tight spaces, but the plumber managed to “hug” around the toilet with one arm on each side of the toilet to get the job done. I’m not sure I’m that coordinated, especially with a blow torch swinging around. 🙂

  • Another great month, Justin. Congratulations on your continued increase in net worth.

    I liked your comment on the three bathrooms. Larger houses do cost more in maintenance. We have four bathrooms, two furnaces/AC units, and two water heaters. Our costs went up here in June because the electric water heater in the crawlspace gave up the ghost, after 15 years in this house as the original (try to get 15 years out of a new one.) That one is a bear to replace so I paid for it, and the guys that did it worked quite a few hours to get it just right. It was definitely worth the cost. And since the gas water heater in the garage is also 15 years old, we will replace that one as well. Yep, large(r) homes can drain the wallet, but doing as much DIY as you can does lower the cost. And since we are currently traveling about 4-5 months out of the year, better to have everything up to speed to forestall something major occurring.

    Continued best wishes to you and your family.

    • I always knew the larger house equals more money thing, but it really hits home when you’re listening to the plumber add up to his $225 quote based on doing 4 shutoff valves. I know our siding and window replacement job in 2014 was higher on our 1800 sf house than it would have been on a smaller 1200-1300 sf house here in the neighborhood.

      You have a point taking care of potential issues when you travel a lot. That’s one reason I went ahead and did the toilet valves. At least if someone is house sitting for us (or possibly renting for us later on), or even checking on the house occasionally, it’s easy to say “turn the shutoff valve 1/4 turn clockwise to shut it off and we’ll fix it” instead of “crawl to the other side of the crawlspace and feel around for the main shutoff (as the floor upstairs is flooding!).

  • Nice job on that blog income!

  • Sounds like the plumbing issue actually saved you money in the long run from making some repairs now that could have cost you much more later. Nice job!

    • That’s my thinking. And having an expert in the house tipped me off to the pressure reducing valve issue, which will definitely save me $ on the water bill and reduced long term maintenance costs.

  • Blog ( and consulting) income enable you to put cash in the nest at and not withdraw cash from the nest egg! That mus be a great feeling.
    The volunteer work sure looks like great fun! I do some at the school of my kids as well… IT is satisfying

    • Now I have the problem of what to do with all this cash. The money market plus checking account balances are once again over $30,000. The good news is that all this cash makes end of year tax planning a little easier since I have the liquid funds available to max out the solo 401k again (though I have all this blog income adding on to my AGI, making Roth Conversions difficult). A good problem to have I guess. 🙂

  • We had similar plumbing issues with our half bath toilet. It required a blow torch too, but the mister used to do underwater welding when he was a commercial diver on an oil rig, and he still his protective equipment. We saved a few hundred in costs when he installed the new toilet and fixed whatever it was he had to do to the pipes.

    • Very awesome job at converting on the job skills to DIY projects at home. I’ve done that to a certain extent from learning tons of stuff in the civil/construction engineering world which makes me more educated when it comes to home repairs/upgrades and the various systems in our house. Running a billion dollar project helped me with the long term capital replacement budget for our house (just take a few zeros off the house budget 🙂 ).

      The good thing about having the shutoff valves working is that replacing the fill valve in the toilet, a cracked tank, or the whole toilet will be much easier now.

  • Great month, with the blog and 500 on early retirement income consultancy! 🙂
    is the PR of last month already paying off on traffic for the blog? or, you’re counting on this for this month?

    Cheers!
    Erik

    • The higher than normal income was mostly due to the good PR from the past couple months. Good April = more revenue in May since my payments lag a month after advertising revenues are earned. I also received 2x payments from one affiliate advertiser in May, so June will probably be low without that payment hitting in June.

  • Making money doing what you love. All gravy now with that spending!

  • Another great month Justin! Your blog income looks awesome and your expenses are quite low when you consider all of the insurance premiums you paid for last month.

    It’s nice that you can take advantage of your extra time in ER to take care of DIY stuff around the house.

  • Wow, great job on income and expense. Really awesome blog income. Busy month for you, a lot of DIY is a great way to keep busy.

  • I live reading DIY stuff like this. The most plumbing experience I have is dealing with plumber’s butt on guys with saggy jeans! Nice work on the blog income. Keep up the great work!

  • Careful with the wood chips. I put some fresh wood chips throughout my raspberry patch t cut down on weeds and to make it look nice…oppps.

    Pro Tip…fresh wood chips remove nitrogen from the soil as they break down.

    • I’m not sure if they remove nitrogen over the long haul according to this article. I get that they may initially pull some N from the soil to decompose carbon, but then the microorganisms that decompose the wood chips die and return to the soil.

      Overall, the wood chips do a good job of blocking weeds and also help insulate the ground in summer and winter, and keep the soil more moist in summer when it’s dry. I’ll have to keep any eye on the plants though to see if they need extra fertilizer. I’m more curious about the impact of the tannins in the oak chips as the water runs through them. I can’t recall any negative impact in our past usage of oak chips (last time it was a load of live oak chips).

  • I love the variety of things you do for your family and to keep your time occupied. It’s wonderful to know that life can be just as full without a “job.”

    My May was pretty great. I made it through two months of tracking my net worth and had a pretty significant difference. The power of data to change behavior!

  • Thanks for sharing. You continue to inspire and show me how it can be done!

  • We went solar about 15 months ago and I strongly recommend it for many people… especially those who have the cash to pull it off such as yourselves. It wasn’t tens of thousands for us, but around $16,000 after subsidies and state grants.

    In my research, the main factors are:

    1. Your state – This doesn’t mean living in a sunny state such as Arizona. Even in Rhode Island solar makes sense for us. The price of electricity in your state is a HUGE factor. If your electricity is cheap, it probably doesn’t make sense. Just as huge are the state subsidies for solar. This can bring the cost of a $33,000 system down to $16,000, such as the case for our system.

    2. Your home – You want to make sure that your house isn’t blocked by trees and that the panels will be facing in the right direction to maximize sunlight.

    If the stars align (and it’s really not that difficult), you can recoup your investment in 7 years. That was worth it to me, because I didn’t see our family moving before then. Even if we did, it would be a significant asset in selling our house… though we’d probably rent it (and get a premium due to the reduced electric bills).

    I recommend that you DON’T lease a system. I think these companies are basically playing arbitrage, taking the subsidy to use your house to rent electricity back to you at a higher rate than if you bought the system outright.

    I have much more information on my site, but I’d be happy to talk with you about it if you want to shoot me an email.

    • We have fairly cheap electricity – $0.10 per kWh or so. We also have a decent roof completely unobstructed by trees.

      I researched it many years ago while still working (while we actually could have benefited from federal tax credits) and it could have paid back in as little as 5 years with all the credits and subsidies and the premium they would pay for solar energy ($.20 per kWh I recall).

      Today it’s a different story. I don’t think they pay the 20 cents per kWh any more. Fed tax subsidy is nearly worthless and we don’t hardly pay enough state taxes to get the full state tax subsidy over two years.

      I’m also not convinced that a PV solar array on our house would increase the value significantly given the neighborhood. It might be a liability (like a pool) that buyers don’t want or that might limit our range of buyers to a smaller subset that would be willing to pay for the array. I think we’ll be living here in 7-10 years but who knows?

      Our electric bill is only about $1,000 per year so spending anything over $10,000 out of pocket (net of subsidies) to get rid of the bill doesn’t seem like a great ROI given the potential for maintenance costs over the years (issues with panels, inverter, grid connection, etc).

      Maybe some day though! I’m sure the systems and components will only get cheaper over time, and might become simple and easy enough to DIY (plus some minimal $$ for an electrician to tie it all in). I was tempted about 5-6 years ago because it would have paid off quickly but I didn’t have time to pursue it then.

      • It’s hard to argue with $0.10 electricity. I think after solar we’re effectively locking in $0.06 for the next 20-25 years and we have extremely favorable tax credits and such.

        I can definitely why it might not make sense to you.

        If we didn’t need a SUV car for the kids (I don’t know how you got by on such a small one), I’d go electric and eliminate our gas bill too.

        We have ductless mini-splits for air conditioning, but they can heat as well. Since they use electricity we can save a little on our gas heating bills too.

        • Where I live here in TN, my kWh cost is just over $.07. No solar company will touch our area; they can’t compete so you don’t see very many installs.

        • I don’t understand how anyone needs an SUV or minivan for 2 or fewer kids. 🙂 Other than hauling big stuff (which we did today), the minivan is bulkier and less fun to drive than a sedan and doesn’t offer an enormously larger amount of trunk space compared to a mid size sedan (like an accord). We do enjoy the 7 seat capacity so we can haul a couple extra friends or family around town or on trips.

          As for the solar panels, I think it’s the cheap electricity that makes it not as worthwhile here. Hardly worth the hassle or risk compared to earning 7% in the stock market over 20 years.

          • I don’t know if it is “need”, but it certainly becomes easier. We have 2.5 kids (the 0.5 is a dog who is the combined weight of both kids.) With a double stroller in the mix, the Subaru Forester can get a little cramped.

            It gets to be more of an issue if we are flying somewhere and have 3-4 suitcases added to the mix.

            • Those double strollers are killer. We bought one (used off craigslist of course!), used it maybe 2-3x and then gave it away. Too bulky to haul in and out of the trunk. 🙂

  • Great job on the blog income!
    My net worth went over $80k for the first time last month! Even though I have many years until retirement, I still look forward to the days when I can DIY stuff around the house, and volunteer for a charity I love. I’m totally jealous of how you’re livin’ life!

  • So inspiring! Thanks for sharing your numbers. As far as solar panels go, we put them in a year ago and have been very happy. Between the national incentive and our state incentive, I calculate that our initial investment will be paid back in 5 years. After that, we continue to save money every month on out eclectic bills and the state continues to send us a check. So the panels will actually make us money. I’m sure your state is different but look into it.

    • I’ve looked into it and so far it’s not a great deal for us in Raleigh (cheap electric and I can’t use the federal tax credits). See my reply to LazyManandMoney for more details.

  • Nice update! We also had a great May numbers-wise… it’s definitely feeling like things are inflating again with the amount we’re up on the year (combo of markets and saving like crazy people). But who knows… maybe it’ll stick and we’ll be extra happy. 🙂

    And nice job on the plumbing DIY. I feel your pain on hiring the pro (we just had to shell out $260 to fix a leaky showerhead which was actually a bad mixer/pressure balancer/valve, and it actually took an extra visit to get it completely right — but that visit was free, thank goodness). But at least in your case, it sounds like he might have saved you money long-term by pointing out the pressure issue that was giving you lots of plumbing pain.

  • That is the way to go. Great you had a great May.

    I got interested in “umbrella insurance policy” as you mention it.

    Can you expand on this?

    • We have a million dollars of umbrella coverage. At $162 per year it’s a good way to avoid a catastrophic lawsuit for any injuries caused while someone is on our property or while we’re driving our car. We have $0.5-$1 million that could potentially be lost in a lawsuit so the umbrella is a cheap way to protect that against all but the largest lawsuits.

  • Congrats on another great month!

    I am very impressed with your blog but haven’t seen a lot on your plan for your children’s college fund?

    Do you utilize 529s at all?

    • We have some 529 account balances but no longer contribute due to the elimination of our state’s tax credit for 529 contributions. We’ll fund at least 4 years tuition and cobble together funds for room and board from kids’ working, scholarships, loans, grants, etc.

      • With your Roth conversion ladder strategy, is the theory that you will have tax-free growth either way but more ability to control the funds with the Roth? It seems the two biggest barriers that most people have with early retirement is college and medical insurance. Your strategy of utilizing the ACA subsidies seems very effective, but I would love to understand your strategy on funding college for multiple children in early retirement.

        Great blog, great inspiration!

        • Yes, the Roth Conversion Ladder lets me keep overall income tax low since I can control my AGI each year, and therefore my tax burden.

          For college, we’ll pay for tuition, maybe some room and board. The rest will come from student loans, kids working during HS and college, grants, scholarships, and if necessary our investment portfolio.

  • Man, you guys are continuing to kill it over there! Well done on a very lucrative month – those are always nice to have every once in a while (okay, maybe *every month*, too). You’re hugely inspiring, Justin!

  • It is lunch time here and that pulled pork made me hungry. Gotta go! 🙂 Thank you for sharing the income updates and showing lots of exciting activities. Financial freedom rocks!

  • The Index kings are winning again. Makes life quite enjoyable, I am certain you are sleeping well at night. I get this question a lot…Also I myself am wondering your opinion. When it comes to someone on the journey to FI what is the proper amount to keep in Cash (I myself hate cash and think 5-10k is a good number)? I would love to see a post on this topic.

    Thanks for the input, congrats on busting through, year 8, 9, and 10 were huge for you and your family.

    • It’s really what you are comfortable with (otherwise you’ll sell at the bottom and lose BIG TIME!!). I usually carried $3k in checking/savings since that’s all we needed to cover the cash flow for 1 month until the next paychecks rolled in. Of course we always spent just one paycheck so no real need for an emergency fund (we could always cash out some stocks and/or borrow a margin loan short term or get a 0% credit card balance transfer offer in a real unexpected emergency).

  • Cool thanks man!

  • Congrats on a great month! Personally, May was ok (I think almost by accident), but I’m anticipating June to be a huge disaster: medical bills, car/home repair, reduced savings, and the resemblance of a social life in a big city.

    Plus, the market correction has to happen sometime…

  • Just came across your site for the first time. Great post! I’ve been reading a lot of PF blogs and your blog came up a lot so thought I would check it out 🙂
    Expected to learn about personal finance but also learned about recommended home pressure systems. Will have to watch my water consumption…

  • Awesome income stream from your blog, and your site isn’t plastered in ads. Very impressive.

  • Mike hopefully the correction is in June, that is not bad news, it would be fantastic…it would be like an early summer yard sale on stocks, etfs, and mutual funds. Grab those deals sir. Stay optimistic buddy!

  • awesome blog income. how do you do it? only with the few adds in the right sidebar? sorry, I am just starting out with blogging.

    The net worth is really impressive. I try to beat this in 20 years ^^

    thanks for sharing!

    best regards from Austria 🙂

    • Mostly affiliate advertisers (you click on a link, sign up for something and I get paid a commission). I’m no pro on blogging or monetizing blogs, but that’s what I’ve done so far.

  • Glad to see you’re DIYing – I love some DIY. May was a pretty boring month on the finance side for me. But on the life side it was quite busy. Work travel can put a damper on the personal life, but at the same time build up some nice airline and hotel points 🙂

  • Really enjoyed reading this post! Thank you for being so transparent with your numbers 🙂

    And I’m on the same page as you…after making a small amount of passive income from writing and coding in retirement, we ended up with more money than before we quit. And this is after traveling the world! So “running out of money” is really an irrational fear you quickly get over once you retire. I’m loving this new life and not worried at all.

    I’m going to check out your “creditcards.com” link. I’ve been Travel Hacking for the past 2 years, but as Americans, you guys have a lot more options than us Canadians. But I guess, I’ll have to grudgingly settle for the trade off of having sweet sweet subsidized Canadian health care. #It’sAHardKnockLife #champagneProblems

  • If all you looked at was the restaurant and automotive category to guess how much you spent, you would already know with 90% certainty you’re extremely frugal. So many people blow their entire paycheck in those two categories

  • Thanks for sharing your journey and your lifestyle. I hope to join you in early retirement one day!

  • thanks for your blog! i have read a lot of FI early retirement blogs and yours is the first where you publicly stated your net-worth and included the value of your house! that what i have been looking for! i grew up a scatter brain and not interested in money other to spend as quickly as i made it. my motto was “make as much as you can and spend it”. till the kids came and i started to care. my motto now is “stretch a cent “. i am working still. work for me is a social activity. i change job every year and work with different groups, teams, projects and fields and thoroughly enjoy it. then leave for something else after a vacation. kids are grown though.
    to all others out there working on their F1, keep on keeping on…it’s doable. listen to justin!!he is sensible!! i truly am not into spreadsheets or strict budgeting or even understand half the connotations and permutations of what you talk about..lol.. i actually did not realize i had passed the 1m mark which was my goal till someone i trusted asked me about my accounts and added it up for me. i am mathematically challenged and i love it..what i did was save more than i make which is always good advice and invest the savings in a passive index account and work 30 minutes from residence and kids school and stop outsourcing everything in my life. other things i did and do that bloggers don’t support include spend for charitable purposes in the 10-12 % range of net income , money gifts to family members, buy new cars and clothes, eat out frequently if my waistline is not complaining. i have been blessed to be a single mom and love a simple life and enjoy what i do for a living..i actually plan to work till retirement age. i will keep reading your blog as i have so much to learn starting from how to figure out the return on my investments and my asset allocation.
    thanks so much for writing!

    • That’s awesome! How cool to wake up one day and realize you’ve surpassed the $1 million mark without knowing it? For me (and many readers) it was a very slow, gradual process of watching the net worth creep up over time.

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