August 2014 Financial Update

Wow, what a month!  The markets started off August with a whimper and closed out the month with a bang. The steady rise in the stock market throughout August made us wealthier by $33,000.  We spent the month at home in Raleigh, and kept our spending in line with our budget.

$2,523 in total income during August barely covered our monthly expenses of $2,463. The months in between quarter-ends will always be lighter on the income front since our dividends are paid quarterly.



Blog income, shown as “other income” in the chart dipped to only $400 in August.  This was much lower than the $2,125 earned in July.  The lower August blog earnings reflects some payments being received in July instead of August.  September will likely be higher than $400.  Long term, it looks like $600-800 per month is a reliable guess for income from this blog, subject to normal monthly fluctuations.

I didn’t receive any freelance writing income in August, however I’ve already received one payment in September for work completed in August and I may receive another payment in late September for other August work.

Mrs. Root of Good is still working, hence the salary income.  Mrs. RoG went back to work full time in early August after having the month of July and part of August off for her negotiated fully paid sabbatical.  She is mulling over when her last day of work will be, and mentioned to her boss that she might not be here past the end of the year.  She’s exhausting her vacation time right now since they don’t pay for unused vacation time for employees that quit.  Will she make it into 2015 and take advantage of another month of vacation time and a 2-3 month paid sabbatical?  Time will tell!

After a strong month of investment income in June and July (over $7,000 total), we received a paltry $80 of interest and other investment income in August.  Our biggest months of investment income are ahead of us in September and December.  We’ll likely surpass our $22,300 of dividend income during 2013.

“Deposits” of $32 were from my Mr. Rebates account.  I try to go through the Mr. Rebates shopping portal for all of my online purchases and pick up an extra 2-6% on just about everything I buy online.  In dollar terms, I get a buck or two for smaller purchases of a few items, $4-5 for reserving a hotel room for a few nights, and $20 or $30 if I buy something significant like a television or computer.  I shop at whatever online retailer provides the best deal, and I just remember to click through Mr. Rebates right before I check out.  10 seconds of work for a buck or $30 is a great use of my time I think.

The “Travel income” of $482 reflects the refund of our Quebec City apartment rental.  The apartment didn’t work out for us so we canceled and received a full refund from AirBnB.  I talked about the apartment in our Quebec City trip summary, but I’ll mention it again here.  The apartment was really dirty, and we cancelled and received most of the refund immediately.  Then I complained to AirBnB and they refunded the entire amount of our rental and provided an extra $150 credit toward future travel.  They seem to go out of their way to make things right.  I saved $25 on our reservations through AirBnB and you can too through this link.

In September, we’ll have a good bit more “travel income” in the form of $525 of statement credits that paid for our last minute cruise to Mexico, Honduras, and Belize.  If you want to get your own $400-500 of travel credits, sign up for the Barclay Arrival Plus card.  Our travel credits almost paid for one cabin on our seven night cruise (we booked two cabins for our family so we can spread out).




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).



Now let’s look at August expenses:


At $2,463 for the month of August, our expenses are almost in line with our budgeted $2,667 monthly spending.

The biggest category of spending this month was healthcare.  Or more accurately, dental care.  With dental insurance, two new crowns cost almost $800.  We budget for expenses like that since they come up very infrequently but will recur over our lifetimes (crowns don’t last forever says our dentist).  Eventually we won’t have dental insurance once Mrs. RoG leaves her job, so we might consider medical tourism to get medical and dental work done overseas at a much cheaper price (without sacrificing quality).  That might be a hard sell for Mrs. RoG though!

Our annual car inspections, auto property tax and auto registrations all came due in August and totaled $219.  I used a coupon to save $26 off the inspections.

The grocery and restaurant spending of $432 and $92 is roughly in line with our historical spending patterns.

The “online services” of $203 is for three more years of Hostgator web hosting (use coupon ROOTOFGOOD25 to save 25% off all hosting fees!) and annual domain registration fees.  Overall I have been impressed with Hostgator service during my first year.

Yes, Root of Good is about to celebrate its one year anniversary, and I’ve made a (small) financial commitment to keep it going at least three more years.  I gladly paid the $203 now that I know revenue generated from the blog can way more than cover the expense.  Having a hobby that pays for itself is kind of neat.

We also went on a spending spree of personal consumption in August.  We picked up a new Night Therapy king size 13″ pillow top mattress for $367 from Sleep Revolution.  It’s pretty similar to the $800-1,000+ models we tried at the mattress stores, just without a brand name attached to it.  The reviews were awesome and it turned out to be a nice, comfortable mattress.

I decided it was time to upgrade phones (for the second time this year) after my previous phone developed a problem in the USB charging connector.  Always seeking out value, I went with the two year old Samsung Galaxy S3.  It was $98 at eBay and very lightly used (always kept in a case by the previous owner).  This phone is light years ahead of my old Evo 4g phone.  The battery lasts a lot longer, and the screen is beautiful.  Even though the Galaxy S5 has been out for a while, the S3 still does everything I need it to do at a very fast pace.  Hopefully it will last me a while.  I activated my phone on the free Freedompop service and it’s working well enough so far (almost exclusively used for data).

I closed out our August shopping spree with the purchase of a very lightly used Playstation 3 that came with four games for $125.  I could barely tell the Playstation was ever used.  The previous owner was a 30-something neighbor who is a kidless professional that liked to knock off bad guys in his spare time.  This Playstation is in mint condition and even came with the box.  I bought two more games digitally from ebay for $4.  I am once again behind the times because the Playstation 4 has been out for a while.  However the Playstation 3 is pretty awesome so far and I have a huge choice of games that are in the $5-10 range.

It’s a little amazing that we can fund all of our regular monthly expenses and pick up all these consumer items for under $2,500.



We budgeted $32,000 per year for retirement, so eight months of spending should be $21,333.  At almost $17,374 year to date actual spending, we are roughly four thousand dollars under budget for the year.  September will be a bit expensive since we booked a week long Caribbean cruise.  I’m not sure of the timing yet, but I need to take care of some major home maintenance items like a new roof and new siding in the fall.  This might cost $10,000 to $15,000 depending on the options we choose (or way less if we DIY).  We’re sitting on around $40,000 cash right now, so it makes sense to knock out big budget repairs with the stock market being so high right now.


Net Worth: $1,458,000 (+$33,000)

Getting $33,000 (+2.3%) richer in August felt good.  After losing $19,000 in July, it’s a nice bounce back.  The stock markets really went on a tear in August.  Since I generally do very little to my investments other than rebalance occasionally to maintain my asset allocation, I didn’t panic in July and sell everything (OMG!) and as a result I remained fully invested and I enjoyed a nice plump juicy return-laden August.  Who knows what September will be like though, right?

I remember a particularly ugly September back in 2008.  It was the last week in September and we were vacationing at an oceanfront beach house with the family.  We like to go to Topsail Island around Surf City, North Carolina.  It’s really quiet down there since the island is only a block or two wide in many places.  And it’s even quieter in the off-season that starts in September.  There’s not a whole lot to do other than relax and enjoy the maritime scenery.

Except this week in September, 2008 was a little different.  The stock market was doing somersaults every day.  One day while I was taking a break from the sand, sun, and surf I logged on and found out the S&P 500 had dropped over a hundred points for a 9% loss in one day.  Oh well, not much you can do when that happens other than go back out to the beach and enjoy the rest of your vacation.  Fast forward six years and the S&P 500 has almost doubled since that ugly day in September.  Sometimes it literally pays to do nothing when it comes to managing your investments.

I doubt we’ll have another 9% loss in a single day this September, but being a student of the history of the market makes it easier to stomach horrible (temporary) losses and stay the course.  Good thing I kept saving and investing money back then!

The $33,000 increase in net worth this month equates to roughly one year of living expenses for us.  It’s a little disorienting to think we can make or lose the amount we spend in a year without a ton of volatility in the markets.  But that’s what investing in the stock market is like if you pay attention to daily or monthly fluctuations.  It moves, but generally goes up over the long term.



We are approaching the $1.5 million milestone.  It won’t really buy us anything beyond what we can afford today (it’s only an extra $42,000 after all), but there’s still some psychological effect of reaching those big round number milestones.


How was your August?  If you experienced a big increase in net worth, do you feel richer?  Are you planning on spending more money?



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  1. August was good, just another month of accumulation. They sort of blend together at this point. We’ve optimized to the max, and now we’re just executing the plan. 🙂 I make it sound boring but I actually love it when a plan comes together!

    I think after a while, I don’t feel any richer with additional net worth increases. I remember a long time ago when I crossed 100k… that felt special. I imagine 1 million will feel similarly surreal. Not going to change our habits though. We don’t spend a lot of money by nature.

    Glad to hear you are happy with an online mattress! We love ours (different brand, but still from amazon) and people can’t believe we spent less than $300 on a king sized mattress! We’ve been sleeping on it for over two years and it’s still great. Mattresses are one of the last retail businesses to be disrupted by the internet… but it’s high time! I don’t need a mattress salesman “helping” me pick something out 😉

    1. That’s how I feel – just workin’ the plan. $2 million (if we ever hit it) might feel “special”.

      So far our mattress is pretty awesome. I’m glad we spent the $367 on it instead of $400-500 on a very low end one from the mattress store. We actually bought the top of the line mattress from this particular manufacturer, and could have paid closer to $300 for a 12″ instead of a 13″. I somehow rationalize the extra expense for a mattress since we do spend roughly 1/3 of our life on it.

      Shopping for the mattress was frustrating since all the brands and models are different between the different retailers. You’re right, once people figure out that you can pay half or a third of the retail price by buying online, it’ll put a lot of pressure on the conventional retailers.

  2. Awesome, 3 more years of RoG! I just renewed Action Economics domain and hosting for a second year as well, GoDaddy didn’t offer any really enticing price break to register further out. I’m sure it’s really difficult for Mrs. RoG to make that call, I guess it all hinges on how enjoyable her job is in the meantime. Turning down 4 months worth of “free” income would be a difficult decision, of course that’s what building wealth is all about, having enough money to be able to make those calls!

    1. Hostgator has a steep price curve where if you renew for a year, there’s a quantity discount, and at 2 years, and another smaller one for 3 years. The difference between 2 and 3 years was only an extra $36.
      Yeah, she’s taking it a day at a time, a month at a time. Lately she’s been taking most Friday’s off, so that helps make the job a little easier.

    1. I’ve seen the market go up and down enough that I know not to worry too much. If I don’t like what the market is doing today or this month, I can just wait till next month and it’ll be doing something else.

  3. Very nice reading these income reports – i’m gearing up for an early retirement (hopefully by my 40th birthday, in 10 years) and it’s good to see what your major cost centers are.
    You mentioned living in NC – do you do any gardening/hunting to keep your grocery bill down?

    1. We do a tiny bit of gardening. This year it was watermelons, pumpkins, and bell peppers. So far the pumpkins and peppers didn’t produce anything (we’re doing it wrong I guess). We do have about 3 watermelons that might turn out to be decent and I guess it’s time to pick them. I also have a small amount of green onions in pots that are more of a convenience since I can cut a few stalks as necessary and not have to buy a whole bundle (or run down the street to get that bundle!).

      We also planted raspberry, blackberry, and blueberry bushes this year that yielded a tiny bit of fruit, and will hopefully provide a lot more next year.

      We have lots of pretty roses, flowers and ornamental trees! Can’t eat them though.

      I don’t do any hunting (other than bargains in the grocery store!). We live in the city here in Raleigh, so it would be a bit of a drive to get to wherever hunting is allowed (no clue about where that might be or what is in season right now).

      Do you live in North Carolina too?

  4. August was a good month. We went up somewhat more than yourselves because our asset size was bigger, but %-wise probably about the same. Strange outgo last month, though. Due to a hiccup with the bank regarding a mortgage on my daughter’s new house, I had to step in and pay the $200K cost or she would have lost the house auction. It hurt to lose that much of my cash cushion, but she feels she can pay it back within five years.

    Not to rub salt in, but our equivalent vehicle cost for two trucks and two motorcycles is less than $80. We have no inspections or vehicle taxes here in TN, so we only pay registration costs. Sweet (although it does make for seeing some outrageously cracked windshields now and then.)

    1. I’ll take my $200 vehicle taxes and registration over your negative $200k outflow any day of the week! 😉

      I do get a little jealous of the no property tax states. I’m sure many of those states gets you one way or the other. And don’t worry, a good friend from Tennessee has thoroughly salted these wounds of mine with tales of lower taxes over the years.

      We’re actually “lucky” our car tax bill is so low. If we had a pair of new $25,000 cars, we would pay an extra $500 per year. Which makes it slightly more economical to own an older used car here in NC since you save on taxes and insurance.

  5. August was great because I paid over $450 towards my student loans, and this month I’ll get one of the three beasts paid off completely with another $650 payment. I am SO excited for that moment! Only two more to go after that with interest rates at 1.95% and 2.5%. This month – much like last month – I don’t plan on spending any money, as it’s all going towards them loans. I also received my first dividend *ever* in my regular taxable investment account (I finally took the plunge and bought some stock in July) (I’m not counting my 401K stock holdings quarterly dividends) and while it’s only $1.97, I’m still pretty stoked about it! 😀

    1. That’s pretty cool! Instead of you paying someone else interest, someone else is now paying you interest/dividends. Remember that $1.97 dividend you just earned. Eventually it will be $19.70, then $197.00. Watching the dividends and investment values rise over time is very exciting.

  6. Congrats on a great August. You are right about the markets staying invested in the markets despite short term fluctuations. Many people thought the S&P was way overvalued less than 2 years ago when it was in the 1300’s. Now at 2000 the same comments continue to be made. I guess if people continue to predict a 10% correction eventually they will be correct. Unfortuntately for them it may only come after a 50-60% missed rally.

    Keep up the great work!


    1. Thanks! Count me in as one of those that expects a 10% correction sometime in the next year. Or next decade. Who knows, right? Bull markets last a year sometimes. Other times they can last 10 years (with a little choppiness in some months or quarters).

  7. I like your monthly reports 🙂 and you’re so near another milestone! I bet you hit it in either September or October. I can’t wait til we pass the 100k mark; it’ll be waaay in the future I think, but it’s an exciting thought.

    1. I remember it taking years to hit the $100k mark. When you’re starting out, the milestones are very far apart. Eventually, a good year in the markets can push you up another $100k milestone or two.

  8. Justin,

    Another solid month right there.

    Gotta love seeing your wealth continue to grow even with only one working spouse. That’s awesome! 🙂

    Keep up the great work. Hope to join you in Early Retired Land within the next eight years or so, but I’m pretty close now as I get to wake up and essentially live out my dream.

    Best wishes!

    1. We lived off one income while working (and saved the second income). Now we are living off my smallish freelancing and blog income plus dividends from the taxable account and saving all her earned income (or if you ask my wonderful, lovely Rootofgood-reading wife, her income supports our family while I lay about all day). Over time, I expect the investments to grow faster than we spend them (if the past is any indicator of the future). Definitely a reassuring feeling to see the NW grow instead of shrink!

  9. August was good for me too, $27k good to be exact. I think I’ll treat myself to something luxurious with a status symbol or letters! Just kidding, it’s all staying put in the ‘stash as usual.

  10. I was expecting more tooting on the horn 🙂 But in all actuality, there’s really not much exciting about having more safety margin. It’s preferable to the alternative, but can also muddy the water as to where you might actually stand. One of the worst feeling, early on in my investing career, was slowly growing up to a substantial amount of gains, and then seeing it quickly disappear on paper. It was my first experience with paper gains and losses, and it took me a while to get over the emotions involved. The investments had a 30+ year time horizon, so none of it affected my lifestyle, but it was still stressful.

    1. I don’t get too excited because I know the gains can disappear as fast as they showed up (or even faster!). If we lost 25% of our investment value overnight, we would still be around a 3.25% withdrawal rate, so not too much worry these days. And the long time horizon is important. Most of this money in our portfolio won’t be spent for a decade or more.

  11. Wow, you guys are doing so well! Thanks for sharing your net worth too. 🙂 It’s pretty cool to see. I’m looking forward to Mrs. ROG’s retirement too. It’d be very interesting to see how she handles it. Man, living in the more affordable part of the country is very advantages. If Mrs. RB40 ever want to quit working, we’ll definite look into moving. Portland is too expensive.
    Good luck!

    1. Thanks, Joe! It’s fun when the markets go up. NW is just a number, it’s all how you use it that counts.

      I’m looking forward to Mrs. ROG’s retirement too as it will make my own early retirement a little more “real”. And get me out of child care duty occasionally 😉

      The low cost of living here is pretty nice. It lets us retire on less money, and save more money while working. Of course Mrs. RoG has a bit of a commute (30-45 minutes) to get to the Research Triangle Park area where she works (where most of the high paying jobs are in Raleigh-Durham area). We’re close to downtown in Raleigh so it’s still a great location if you like city life.

  12. Congrats on the big market increase. On that dip back in 2008, did you invest a bigger than normal amount or just kept investing normally? If you are willing to invest new money or sell some losers, you can buy some stocks that payout in August to help with the inbalance in monthly income.

    1. We pretty much continued investing as normal. The only thing I did in 2008 was switch to a slightly more aggressive asset allocation (which I still employ today) that included small cap international and international REITs. I haven’t done a detailed analysis, but those new asset classes I added in have done very nicely compared to the developed international funds and large cap US funds.

      As for the uneven income, I don’t mind it. We keep enough cash on hand to cover the months were we get minimal investment income. And now that we’re in late September, the waterfall of dividends at end of Q3 is about to crank up.

    1. Thanks! The NW was looking good in August. September has erased those August gains and then some (with a week remaining!). Like a ball of yarn being toyed with by a cat, my NW tends to get tossed about a bit.

      The blog income has been pretty steady, which is great news!

  13. I think the best part about your spending that I really appreciate is that your grocery bill has averaged $83 per week for a family. That is well below what they feds give out in food stamp for your size family. Yet, I think your eating pretty well. And the consistency of the food spending is nice too.

    Very impressive

    1. I know. I think they give out $900+ per month in food stamps for a family of 5. We spend half to two thirds of that most months and eat pretty well (lots of fresh fruits, vegetables, and meat, and plenty of fancier ethnic specialty foods to increase our average spending). We cook most things from scratch and rarely buy pre-made meals or packaged meals, which drives our cost down. I even include household goods like paper products, deodorant, toothpaste, soap and cleaning supplies in our “grocery” category, which means our actual food expenses are lower than my budget summaries indicate!

      I don’t know if you saw the articles I did in the spring on “One month of groceries” (lots of pics!) or Extreme Grocery Shopping Without Coupons?

      I was behind a lady at Walmart and she had six large bags of frozen shrimp and probably 8 containers of Hagen Daaz ice cream. Then she paid by swiping her food stamp card. I’d probably have to eat shrimp and Hagen Daaz every meal, too if I had to spend $900/month. 🙂

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