Celebrating Two Years of Early Retirement

two-years-early-retirement-mexico

Wow, two years into early retirement.  What have I accomplished?  Everything and nothing.

When I entered early retirement by ditching the working world, I was still focused on keeping busy.  Productivity, accountability, setting goals.  All stuff you have to do when you’re on an annual performance review cycle.  I shared my early retirement to do list in my “First Month of Early Retirement” post almost two years ago:

  1. Ebay a bunch of stuff
  2. Learn a foreign language or 3
  3. Investigate starting a blog and/or a Youtube channel
  4. Get more exercise
  5. Cook even more than I already have been, and perfect some new dishes
  6. Hang out with more people more often
  7. Play more video games
  8. Read more books

I’ve completed all of these action items (except that Youtube channel!), so I get a gold star for entering early retirement correctly, right?

That list is a pretty good summary of typical things I’ve done these last two years.  I pulled together a weekly schedule that shows how I routinely spend my time, although I don’t strictly follow any schedule day to day.  That weekly schedule includes blogging, reading, playing video games, socializing, and spending time with the kids plus a little housework that has to get done.

early-retirement-daily-schedule

It took about six months before I really got into the early retirement groove and started relaxing.  I ditched any notion of having to accomplish something concrete in early retirement.  So far, I’m doing a great job of “doing nothing”.

 

Retiring early to travel the world

On top of all these routine pastimes that keep me busy and entertained on a daily basis, I’ve also fulfilled another early retirement goal by taking a few major trips abroad.  Last year we set out on a five week road trip from North Carolina to Canada.  It turns out that traveling with a two year old can be exhausting, so we returned home about half way through the trip.

Here’s a summary of the blog posts from the Canada trip:

A year later, a year wiser, and with a toddler a year older, we set out on another grand adventure.  This year we spent seven weeks in Mexico.  Join us on the journey:

 

Just a bug or The Most Interesting Thing In The World to a little kid?

Now that we’re official battle-hardened family travel veterans, we can share a few things we learned about traveling with young children:

  • Slow travel is the name of the game.  Take it slow and easy.
  • Plan plenty of “do nothing” days in between the more hectic days of touring, sightseeing, and traveling between cities.
  • If the kids want to take a detour, go for it.
  • Take breaks for water and snacks frequently.
  • Remember the reason you took the trip – relaxation and fun for the whole family

 

 

Keeping finances on track

After two years, we are $235,000 wealthier than when I left my job.  Around $120,000 of that net worth boost came from Mrs. Root of Good’s salary since she continued working even after we reached financial independence (more on that decision below).

The other $100,000+ of net worth growth came from investment gains in excess of our annual spending.  In other words, even if Mrs. RoG didn’t work at all these past two years, we would still be $100,000 richer today than when I quit working.  That’s the true test of how well our early retirement financial plan worked these past two years.

As I write this, we just suffered through one of the worst weeks in recent stock market history.  Our net worth dropped almost $100,000 over the past two weeks.  Are we worried?  Not yet.  I don’t think we will run out of money in early retirement, so these fluctuations, while volatile, aren’t that scary.

net-worth-two-years

In 2 years: Net worth +$235,000 to $1,462,000.

We’ve managed our expenses incredibly well.  Better than I ever expected.  For the first seven months of 2015, for example, we only spent $14,883 which is $4,000 under budget compared to where we should be based on our $32,400 early retirement annual budget.  And that’s after spending almost $4,500 on a seven week vacation in Mexico!

july-2015-ytd-expenses

In 2014, we came in just $2,400 over budget in spite of spending $8,700 on major renovations to our house including new siding, new windows, and a major roof repair.  We’ll undoubtedly have repairs to our home and auto over the next several decades of early retirement, but those repairs won’t typically be as expensive as the 2014 repair bill.

cat-food

No need to raid our cat’s pantry just yet.

Something surprising happened after I retired.  I used to check our finances and investments almost daily.  Knowing how we were doing kept me motivated toward our early retirement goal.  Every $10,000 or $100,000 of growth meant we were getting closer to the goal.

Now that I’m retired and the victory flag is firmly planted, I let the investments do their job of growing long term and don’t routinely check the account balances.  Curiosity still gets the better of me occasionally and I’ll log in to Personal Capital to see where the totals are.  But I rarely make any changes to our portfolio.

In almost eight months of 2015, for example, I sold one investment to fund our mortgage pay off and I rebalanced the portfolio once near the beginning of the year to get us back to our asset allocation.

I figured I would worry about finances more in early retirement, when the opposite actually happened.  Maybe it’s because the net worth keeps growing?  I might feel different if we were sitting on a few hundred thousand dollars less than what I started with two years ago.

What’s next?

One thing is certain – I don’t miss work.  From September through May, I still have to wake up with an alarm clock so I can walk the kids to school, but I don’t mind that at all.  I’m working for me and my family and not for The Man.

But if I ever do get bored, I can always polish the resume and dust off my interviewing attire.  Boredom = unlikely.

Mrs. RoG still works full time right now.  The plan was for her to work “a few more months” after I quit working.  Then she received another month block of vacation time.  Then it was bonus season.  And she got a raise.  Then she negotiated an additional five weeks paid time off on top of her regular vacation time and holidays.  After working four day weeks and burning up most of her vacation days last fall, her tentative plans to walk away from work fell through again.

Eventually it was the start of a new year and with that another month allotment of vacation time.  Then bonus and raise time again.  As if her employer wasn’t generous enough, she requested and received a paid three month sabbatical for May-August of this year.  We traveled the world and Mrs. RoG learned to swim.  Very successful sabbatical if you ask me!

Today we arrive back at the crossroad where “quitting work” intersects “easy money and lots of time off”.  It’s not an easy choice to walk away from great benefits and pay at a job that has flexible hours, allows telecommuting, and comes with mostly reasonable coworkers and managers and a 40 hour work week.

When is Mrs. RoG going to quit for real?  In “a few more months”.

In the meantime, I’m holding down the fort at home until she hangs it up for good.  A combination of stay at home dad, travel agent, chef, handyman, and chauffeur.  Which is probably how I’ll spend the next decade even if Mrs. RoG quits tomorrow.

I wish I could tell you what I’ll be up to in five or ten years, but I can’t realistically forecast that beyond a year or two out.  In two years, our youngest child will be in kindergarten, our oldest two kids will be in middle school.  Mrs. RoG will almost definitely be done working.  We’ll probably go on at least one extended international trip in the next two years (Germany? Spain? Argentina?) and a few smaller vacations.  If I had to guess, we’ll still be living in our same house in Raleigh.

 

 

What do you envision for your first two years of early retirement or regular retirement?  

 

 

77 comments

  • Congratulations on your successful transition to retirement! My question though is what on earth does Mrs. RoG do for work that allows her such generous leave?! A month of paid vacation is something most of us can only dream about let alone a paid three month sabbatical! I don’t blame her for continuing to work as long as she likes what she does.

    • She’s in investment banking. Hard work pays off. They want to keep her on staff so they’re flexible where they can be. She’s been there 10 years, so it took a while to get to this point.

  • Don’t forget you are also an awesome adviser on:

    Projects around the house
    Technology
    Car related
    Finances
    Travel
    Child raising

    All for free! This is greatly appreciated by those who have received this! Glad you have the time to do this and don’t mind doing it.

  • Also a great advisor on retirement! I certainly used your advise on this one!

  • Paper net worth will drop further today, as will mine. A decent correction has been a long time coming and it’s really a good thing for those of us still adding new funds to the markets and even dripping new shares. My portfolio is getting whacked but I will be adding over $1.5m of new money over the next ten years so record high markets are not what a buyer should want. If Honda Civics suddenly went on sale everyone would be racing to the dealerships. We need to think the same way about our stock and ETF buys.

    • The market drop is GREAT news for anyone still working and plowing new money into the markets. We are spending roughly what our portfolio yields in dividends, so unless they drop drastically, the downturn doesn’t really mean we’ll be selling at a loss for some time to come. Add to our cash flow some level of income from this blog, and we may not have to sell any shares for at least a few years since I have a year’s worth of cash on hand.

  • Great summary of your first 2 years post retirement. I’ve been retired for 3 years now and I agree with you, boredom is self-inflicted. If you keep busy with things you love, you are never bored.

  • What a great post and I’m in a similar predicament as Mrs. Budgets would like me to “retire” next year to pursue jewelry making full time. I’ve been at my job almost ten years now and if Mrs. Budgets has her way, I probably wont make it to ten years. We plan to use up all my vacation time by end of the year, wait for the holiday bonus, then I will drop the BAD news to my boss. Company has been good to me, though not as of late, I plan to leave on a good note by giving them two month notice.

    In first two years, I want to work on my jewelry making skills by taking classes and attending more art festivals to sell my work. I wish I could include as many hours on video games and Netflix but Mrs. Budgets is planning to sell the PS3 on E-bay. 🙁

    • What!?! Selling the PS3 on ebay? Maybe she’s going to surprise you with a nice new used PS4 off ebay. 🙂

      • I highly doubt that. She kind of nudged me to sell all my cycling gear plus a nice road bike which I haven’t been on in a few years. It worked out since I put that money toward the jewelry side business, which is where I’m putting all my focus at the moment.

        • Got to have priorities, right? 🙂 You can always pick up a used playstation 5 in another 5-6 years.

          • Exactly!

            Love your blog. I just started reading blogs starting this past week. Mrs. Budgets is in charge of the website and does majority of the work. She loves it so I help out when needed. But what a community! I didn’t realize people put it all out on the tables minus the dirty laundry of course.

            Look out for my comments and look forward to reading future blog post from you here on out.

  • Been 18 months since I retired, albeit not at the early age that you did. It has been a great ride and I would not trade it or the experiences over these months. Like most I am getting killed in the market, but hopefully we will come out whole on the other side. Keep enjoying life as you have been; if nothing else it pisses off the naysayers when it comes to early retirement.

  • “I sold one investment to fund our mortgage pay off”

    I can’t find a post about that – sounds like you paid it off early. What prompted you to pay it off rather than keep the low interest rate payments?

    • I knew this crash was coming. 🙂

      Nah, I just wanted to clear that small mortgage off the balance sheet. It only had $27000 remaining, so I took some cash on hand and ditched a stupid investment I bought on a whim to raise another $11000 or so. In hindsight it was a genius move, because I sold it near the high and today that investment sits 8% lower than where I sold it. I figured I’d end up selling at some point in the next two years to help pay off the mortgage, so might as well do it while the investment was nice and plump.

      I didn’t write a post about it because it was mostly a non-event in our finances. I sort of try to time the market to a certain extent. I’m hoping to raise cash while the markets are booming and live a while on the cash while the market is in the crappers.

      • Glad it was a non-event. I’m kinda bummed there wasn’t a story behind it, but on the other hand it’s kinda nice to just not worry about money, and to get rid of a recurring payment. I did the same when my car loan had about a year of payments left.

        • I guess it might be interesting and motivating to some, but it was really just shuffling cash from one part of my balance sheet to the another.

          I think we had over $40,000 in cash and was only getting 1% on it at the credit union (then paying tax on the interest!), so I figured I could move it to the mortgage balance and get 2% tax free.

          And now I don’t need to worry about moving cash from one place on the balance sheet to the other. 🙂

  • It’s been great learning about your journey Justin! Definitely a big motivator. Currently I think the first two years will in some way, shape, or form involve an RV and exploring what North America has to offer. I assume at some point I’ll want a permanent home, but that could be 2 years after FI, or 12. Who knows and who cares? As long as I’m enjoying myself, I’ll keep on going down the path that seems most interesting and fulfilling. Seems like you’re doing quite a fine job of this.

  • Congratulations on your 2 year retirementversary.

    Your annual income needs in retirement could be satisfied merely by living off your dividend and interest income, which is more stable and less likely to fluctuate like those crazy stock prices these days. Therefore, I think your portfolio has a much better staying power than most others. I mean you can just own VTI or SPY, and live off that 2% yield forever. ( I know you own other stuff too)

    Plus you have extra income, which even at $1000/month is equivalent to $400,000 in assets at 3%.

    If the stock market keeps going down, would you consider getting more work (p/T or consulting or temping), so you can beef up your savings further? This is one of the reasons I may keep doing what I am doing for a few months/a few years longer than I need to – the other being I may end up being in your Mrs ROG shoes ( figuratively of course).

    Best Regards,

    DGI

    • Retirementversary, nice I like it!

      It’s very comforting to know we could live off just the dividends. And the extra blog income provides another margin of safety, though I expect it to be more volatile than our dividend income.

      As for working more if the market keeps dropping, sure at some level I might try to earn more money. If the market is down but the engineering job market is on fire (which it may be here in Raleigh given political forces wanting to spend billions on infrastructure) I might even consider a plum full time or flex time offer if the price and terms were right and the people were cool. I’m not expecting that to happen though. More realistically, I might pick up some more freelance work or focus more on other parts of monetizing this blog since that probably has a better ROI for hours of effort than going back to work for The Man. Or maybe I’ll start my own consulting firm??

      • I like your schedule of weekly activities posted above, very Ben Franklin like. Perhaps consulting in the areas of lifestyle design could be an opportunity to be the man 😉

        • I’m really tempted to throw up a “consulting” page here at the blog just to see if I can get any easy gigs and maybe help people while getting paid. I tend to shy away from the lifestyle coach segment of advice, but there’s a market for it and a true need for some.

          What’s a fair price? $99 for an initial 1 hour consult and a half hour follow up a week later to check on progress? Halfway serious inquiry. 🙂

          Edit: Early Retirement Lifestyle Consulting Services are now available!

          • That price sounds right to me. Both my husband and I are “on board” with the goal of financial independence, but we aren’t exactly “on the same page” with what that needs to look like right now. Seems like a 3rd party who has navigated these waters would be a lot more valuable than a traditional financial advisor who is going to tell us to invest 10% and that I’m ridiculous for wanting to cut back on convenience items when we can afford them. I hope you put up a page! 🙂

            • Thanks for the feedback! I’ll look into it and see if it’s something I can do. I’m not sure about the licensing laws and whether talking about lifestyles, budgets, finances, etc would cross the line into some type of regulated financial advice that I can’t legally provide. And if I do launch these services, you’ll be the first to know!

          • I think that Amy is on to something – see if you can get a license and provide financial planning advice to people on a fee only basis. Maybe become a CFP. It might cost time and money, but it could be an “investment” if you are interested in going this route. Or I wonder what is the most you can do legally without getting an actual certification..

            The thing is, you are more qualified than most financial professionals, since you have achieved your goals. Imagine the tagline ” retired financial adviser consults clients on how to achieve retirement on their own terms”

            • I’m sure I could make decent money at it. But it’s too much like work. Getting the CFP license is a huge challenge and requires a few years of apprenticeship I believe. I have the law degree and law license to take care of most or all of the education part of the CFP license, but the rest of the process is a lot of work.

              But I’d love to provide consulting for a few hours per week on a fee only basis. I’m just afraid of the regulatory environment and any potential liability if someone screws up their finances or investments and decides I’m at fault. 🙂

          • I don’t know the law around this but it seems like as long as you classify it as “for entertainment purposes” and make it clear you’re not a CPA… as long as you can find a loophole that makes it legal to provide the service, then you’re good. I’m pretty sure there are plenty of non-CPA mommy bloggers who are willing to offer budgeting consulting. I’m a data point of one, but I’m drawn to this because it’s a solution to my problem, not because I expect someone with a certificate to keep me from being responsible for my financial decisions.

            • I could probably swing it, but the former lawyer in me says make sure I’m not liable if something goes wrong, and that I’m not accidentally committing a crime by providing advice without a license. Just need to think about this a bit… 🙂

  • Congrats on the 2 year mark and very inspirational for us working toward our financial independence. Impressive that you continue gaining your net worth. Are you investing mostly in stocks right now? Or are you investing in bonds as well?

    • Almost exclusively stocks (via ETFs and mutual funds). I have one small individual bond and I did have about a year’s worth of cash this morning until I dumped 2/3 of that into the market on some Flash Crash stuff (up 25-30% so far). So I’m getting hammered right now, but don’t need to sell anything to survive for the next year or two (other than the stuff I bought today).

  • I hope I can make a smooth transition like you have. Though I have several years left in the workforce, I will still be able to enjoy some more time with the kids when they are still in grade school.

    I definitely hope to enjoy some extended travel time in the summers, too.

    • Awesome! Having the summers off is pretty cool. It’s like being a kid again. Well, the whole early retirement experience is like being a kid again.

      Though next summer we might just hang around home like lazy bums. I think the kids are wanting a lazy summer devoid of any traveling.

  • Yup, I checked: still jealous of your weekly schedule, and still a few years away from early retirement. congrats on your past 2 years!

  • Congratulation! I think you are doing it right. You are relaxing and enjoying life. I with I could be more relaxed like you. Your weekly schedule looks great. Great job on the net worth as well.

    • There’s always time for reform, Joe! 😉 Hopefully once your kiddo is in school (next year??) you’ll have more free time during the day to kick back and relax.

  • I’m closing in on three years FIRE. Loving it. I have a lot less structure than you do but then I don’t have to get kids fed and back and forth from school. I’m also down about 6 figures in the recent volatility. Somehow, its just not such a big deal. This too shall pass. Knowing you can go over a decade even after watching your stash decline gives you peace of mind that you have time to adjust things appropriately.

    I need to try your slow-travel approach sometime. Have enjoyed reading about the Mex trip immensely.

    • We’re all taking a hit in the market, but I expect we’ll all be just fine long term.

      Definitely give the slow travel a try. Very enjoyable and more relaxing than a regular whirlwind vacation.

  • Congrats on the anniversary. Hope to see some new items on the list soon.

  • Congratulations on 2 years! This is great to hear how your retirement experience has gone so far from a financial perspective. I definitely enjoyed the Mexico trip articles. BTW – I would pick the ocean white fish and tuna dinner if it came down to it for me. 🙂 (just saying)

    The statement of yours is insightful: “Today we arrive back at the crossroad where “quitting work” intersects “easy money and lots of time off”. It’s not an easy choice to walk away from great benefits and pay at a job that has flexible hours, allows telecommuting, and comes with mostly reasonable coworkers and managers and a 40 hour work week.”

    We are at the same crossroads you are facing right now. I believe the decision time is drawing near for us!

  • Congratulations on a wonderful 2 years!

    I’m curious which 2-3 languages you have been studying. (Guessing Spanish is one?) We’re quite a ways away yet, but that’s something I am looking forward to as well.

    • I started out learning French right after I retired (building on a semester of French I audited in college). Came in useful while visiting French speaking Montreal and Quebec City. And helping out some French tourists in Mexico. 🙂

      Then I switched to German sometime in the last year. My hope is to spend an extended period in Germany at some point in the next few years.

      Once we finalized plans to visit Mexico, I switched to Spanish (building on 10 years of Spanish from 6th grade through college, including a BA in Spanish Language and Literature). And then I spent 7 weeks of immersive learning in Mexico which greatly increased my fluency versus what it was a year ago!

  • Congrats Justin! Sounds like you’re settling in nicely to the life you imagined. I only hope to be so lucky! I think the key is to keep pushing yourself and updating your goals. If you always have something to strive for, you’ll never get bored!

    -DP

  • Congrats on hitting 2 years of freedom. It seems like you guys put a higher emphasis on travel during early retirement. I think it takes great courage to take the plunge at such an early age, and it has been working well on your end. Good luck.

    • We definitely picked up the traveling. That’s also in part because our youngest is more able to travel now than he was a few years ago. But having ample time off work (or unlimited in my case) certainly made traveling easier. Way easier to get cheap tickets and accommodations when your travel dates are flexible.

  • Thanks for the update. Keep on keeping on. Also, thanks for not letting the blog drop by the wayside. Those of us still on the way appreciate the inspiration 🙂

  • I think you will be surprised at the lack of educational requirements to be a financial guru. Currently there are no fiduciary responsibilities for giving financial advice. The government is looking to change that but is facing and uphill battle from wall street, financial firms and banks. Pretty much anybody can hang a shingle and there are few regulations to prevent it. Not sure if this is true in all states but in Florida it is very common.

    • That’s good news for people like me who just want to do something small. Lack of regulation is really bad news for consumers who can’t determine whether they have a good or bad adviser.

  • It’s great to see you are enjoying ER and taking life as it comes rather than forcing it.

    I envision the first year of our ER to be visiting a lot of friends and family, staying close enough to our home base so we don’t get to scared;

    Year two I expect us to take a few longer trips and get the travel bug fully out of our system. I say all this without kids and just our puppy to take along with us, many things can change and that’s what makes it all so exciting!

  • Congratulations on your early retirement anniversary! I was off for one year on maternity leave and I didn’t miss work at all. I can’t wait to retire one day.

  • Congratulations!

    Thank you for continuing to be an inspiration.

    My family thinks I’m crazy for wanting FIRE, but they are all type A, can’t be still for more than five minute types while I have always been more than happy to relax, enjoy my leisure, and do things on my own pace. I’m still hoping for FIRE @ 35, but realistically looking at FIRE by 40. I’ll have plenty of time to demonstrate the lifestyle suits me.

    • You’re only responsible for the way you live your life, and your family can worry about theirs! After a few years of seeing the advantages of your early retirement, maybe your family will get the bug, too. 🙂

  • Congratulations, Justin!

    I find myself in the same position your wife is in. I keep making crazy demands from my employer and they keep agreeing so work keeps getting better and better! It almost doesn’t even feel like I work anymore, actually, since I do it 100% remotely now. One of these days I’ll just have to pull the plug but there’s no rush now.

    Is there enough time on your early-retirement schedule to make the 2.5-hour drive down to FinCon this year?

  • Congrats, and sounds like a great life you’ve carved out. I think your investments will hold up too and you won’t run out of money. But if not, as you say, resuming paid employment wouldn’t be the end of the world! Best of luck in year 3!

  • I love seeing your early retirement schedule. At first glance it looks jam-packed with activities, but a second look shows that it is filled with your priorities: scheduled relaxation/adventuring, family time, and socialization.

    A few months ago I took a mini-retirement to do some traveling in an RV. After I was done with my trip, I felt like my days were aimless and unexciting. Once I started making a daily schedule for myself, even if it was just telling myself to work in some time for friends, meaningful work, or exercise, I started to really get into the groove and feel motivated. I think in early retirement, scheduling is HUGE for making sure you don’t feel useless or goal-less.

    Huge fan of your blog, can’t wait to see what you do next in early retirement!

    • Wow, that trip sounds like a huge adventure!

      As far as schedules, I don’t stick with the one I posted here that closely. But it’s a great tool to glance at if I start feeling bored and need a reminder of all the fun things I enjoy. It’s more like a menu from which I can select a tasty new activity to keep me engaged.

  • My husband and I are on the road to financial independence. However it is amazing how much you have acquired when it comes to your investment portfolio. We are novice investors. Is there any advice you can give to help us bolster our investment income. We are doing all the other stuff, paying off house in about 3 years, paid off cars, paid off student loans, 401K maxing etc etc.

    Thanks for your time.

    • No specific advice other than keep saving, keep investing, keep your investment costs low. It’s really hard to beat the market averages over time, so I’m a fan of index funds (that typically come with very low investment fees).

  • My friend and I would love if you had a consulting “lifestyle” page up here. We would like more in-depth insight’s into the how. Please do email and let us know if you decide to go that route.

    thanks

  • You are killing it! I say let your wife keep working as long as she’s happy. You’ll likely have decades to spend in retirement together so no need to rush it!

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