August 2016 Financial Update

Now that August is over, we are officially in the last third of the year!  It’s hard to believe the year is already winding down.  August was a decent month financially.  Our net worth crept up another $2,000 to $1,635,000.  Income totaled $5,191 while expenses were $2,817 for the month.

After spending the first part of August on our three and a half week road trip to Canada, we returned home in mid-August to a flurry of activity to get the kids ready for school.  That meant buying school supplies (including a brand new fancy pants TI-84 CE color graphing calculator) and attending two back to school orientations.  Our oldest daughter just entered middle school so now we have twice as many PTA meetings and school events to fit into our not-so-busy schedules.  She’s loving middle school so far!

Here’s what our August 2016 looks like under a financial microscope.



August investment income was $60.  Our portfolio consists of mutual funds and ETFs that pay dividends at the end of each quarter.  September will generate a much higher level of investment returns.  We are well on our way toward matching or exceeding the total of $28,527 in dividend income received in 2015.

Blog income, shown as “other income” in the chart, ballooned to $4,279 in August while my early retirement lifestyle consulting brought in $565.  Blog income was higher than normal because I received two month’s worth of payments from a major revenue source.  The consulting income was also higher than normal and I’m not sure why other than strong traffic thanks to continued good exposure in the media (including this podcast interview with fellow 30-something early retiree blogger Brandon the MadFIentist).

$211 in Deposits includes the cash back rebates from the and online shopping portals. 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.  For example, in August I booked an $810 cruise through Expedia by clicking through Ebates to get to Expedia.  I’ll be getting $81 in cash back once we return home from the cruise in December (more on the cruise later in this article!).  Ebates is a nice way to get a 10% discount on every cruise from a booking site we already use.

The $64 Insurance income is a refund of our auto insurance premiums thanks to removing the Honda Accord from our policy.  We became a one car family when we sold the 2000 Honda Accord in June (after debating whether we should be a two car or one car household for a while!).  Our auto insurance premiums are now $344 per year for a half million dollars of coverage for two drivers.  Given how little we drive on a routine basis, I’d say that’s pretty fair.

The $10 “Entertainment” income came in the form of a $10 rebate check from a liquor purchase.  We categorize hard liquor purchases as “entertainment” whereas beer and wine find themselves in the “groceries” category.  It’s an arbitrary distinction but makes sense when you consider we buy liquor at the state run ABC store whereas we buy wine and beer at the grocery store (and don’t feel like splitting the wine/beer to a separate category called “alcohol” because we simply don’t spend a ton in that area.  Burp.).


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:


After spending a measly $1,190 in July, we seem like frivolous spendthrifts in August because we spent a whopping $2,817 during the month.  That’s cool, we’re still $500 under our budget of $3,333 per month (or $40,000 per year).  The higher spending comes from booking more travel for later in the year and from taking care of business after returning home from our almost month-long vacation.

Travel – $1,144: August represents the second month in a row where travel topped our spending.  That’s no accident since it makes up our single largest expense category in our carefully crafted annual retirement budget at $10,000 per year.  Around $300 of the travel expense covered gas for the van, meals at restaurants, parking, tolls, and other travel related expenses for the nine days of August that we were on vacation.

We booked another cruise for late 2016 for $810.  They are fun.  After our annual turkey-filled Thanksgiving fiesta we will set sail in late November on a five night cruise from Jacksonville, Florida destined for Half Moon Cay, Bahamas (a private island) and Nassau, Bahamas.  On this cruise we’re only taking our four year old son and cruelly leaving our two older daughters at home with Grandma so the girls can attend school (bwahahahahaha).  Don’t worry, our two daughters will join us on an even better and longer seven night cruise later in December (should we even unpack between the two cruises?).

Fun times in the Bahamas on our January 2016 cruise.
Fun times in the Bahamas on our January 2016 cruise.

I think we are done booking cruises for 2016.  Maybe.  Unless a really good deal pops up later in the year.  We are only spending around $5,000 of our $10,000 travel budget in 2016.  The unspent funds will help cover the cost of a potential eight to nine week excursion through Europe in the summer of 2017 (more details on that at a later date!).  I hear Europe ain’t cheap like Mexico.  Or our sub-$1000 3.5 week Canada trip this year for that matter.

Groceries – $816: A few hundred dollars higher than usual in August after underspending the budget by a few hundred dollars in July.  We restocked the fridge and freezer after returning from our trip.  And restocked the pantry and wine cabinet.  We also spent a hundred bucks on massive quantities of heavily discounted toilet paper and did this with it:

At least $100 worth of fun. Plus free butt-wipe material for a six months. Or a year??
At least $100 worth of fun. Plus butt-wipe material for six months. Or a year??

Healthcare/Medical – $249: Health insurance premiums of $125 for our very impressive gold plated silver plan obtained through with some very sizable ACA subsidies. $99 for a routine cleaning, x-rays, and exam from our super awesome dentist that gives great discounts to cash/debit payers. $25 for a few prescriptions.

Home Maintenance – $225 + Home Improvement – $59: Our magical plumber earned a solid $225 this month by replumbing and installing a new shower valve, faucet and supply pipes plus installing a new kitchen faucet.  The shower developed a slow leak that appeared while we were out of town (fortunately mold wasn’t an issue!).

This is all work that I could maybe DIY but choose not to.  My track record on plumbing jobs is pretty poor so I probably saved myself a few bucks by outsourcing the task.  $59 was most of a new shower valve and faucet from Lowe’s (the remainder came from gift cards purchased over the past year and recorded as “home maintenance” expenses at the time). Of course I purchased a $15 off $50 Lowe’s coupon from ebay for a buck which saved me $14 on the purchase.

I spent the several hours of the afternoon while the plumber was here profitably researching our summer 2017 Europe trip.  I don’t regret the $225 expenditure a bit (really more like $150-175 after factoring in cost of supplies and special tools).  It’s taken me a while to get to this mindset of outsourcing tasks I really don’t enjoy or don’t excel at.  But I think I proved my mettle in this situation by putting the wrench down and picking the phone up.

Restaurants – $81: Two visits to the Chinese restaurant plus a birthday pizza party for the 10 year old and half a dozen of her friends (and a half dozen of our friends!).

Utilities – $72: Water, sewer, trash, and natural gas bill.  These bills were much lower than normal because we were out of town during most of the billing cycle.  All told, we saved about $200 on utilities during the 3.5 weeks we were out of town.  The electric bill doesn’t make a showing in this expense report because we still have a credit balance from pre-paying the electric bill in the spring to meet credit card minimum spending requirements to qualify for sign up bonuses (gotta love credit card travel hacking!).

Clothing – $56: Back to school clothes.

Education – $46: School supplies.

Internet (“Cable”) – $34: 50/5 mbit service.

Root of Good hosting fees – $27 (not shown in the summary chart): Once per year domain name registration and privacy protection service.  I paid about $60 per year for 3 years of hosting and things are working quite well for me at Hostgator.  I like Hostgator and recommend them if you’re thinking of starting a blog.

Gas – $0: Other than refueling during our road trip (which gets included in the “travel” category), we didn’t spend anything on gas in August.  The van is below a quarter of a tank so I expect to drop $30 or $35 on a full tank in the next several days.  That should last us the remainder of September.


Year to Date Living Expenses


At $26,538 year to date spending, we are once again below our annual spending target of $26,667 budgeted for the first eight months of the year by about a hundred dollars.  In spite of the $8,200 minivan purchase in March, we managed to get our year to date spending back in line with our annual target.  I guess we’ve been lucky that we haven’t suffered any large unexpected expenses.  That’s mainly because we included the routine “unexpected” stuff when we developed our first annual early retirement budget over two years ago.  Unexpected expenses are highly predictable over the course of a 40+ year retirement.

September should be a relatively low expense month other than $600 in estimated tax payments to North Carolina and the IRS.  The weather cools off here in Raleigh and almost all of our favorite outdoor activities are free or very inexpensive.  Now that the oldest two kids are back in school full time, we are back to our school year early retirement weekly routine.

Monthly Expense Summary:


Net Worth: $1,635,000 (+$2,000)

At +$2,000, it’s a small gain, but a gain nonetheless.  August started with a slight drop in the markets before a strong recovery that fizzled out a little toward the end of the month.  September is already shaping up to be a great month.

It’s a bit scary watching the investment portfolio climb month after month because these things rarely go up in a smooth line.  I’m expecting a dip at some point but not doing much about this “knowledge” because I don’t know when this dip will happen, how severe it will be, or when the market will recover.  If I knew any of that, then Bernie Madoff’s investors would have invested their billions with me for a guaranteed 12%+ annual return.


In a way, I am doing something defensive during this time of perpetual market gains.  In portfolio news, I just sold $15,000 worth of a junk bond I bought many years ago at a steep discount to par.  I sold it at 99.8% of face value (the theory being “get out while the gettin’s good”).  That pushes our cash on hand to roughly $50,000.  That represents about two years of core living expenses.  Add to that the $8,000 to $10,000 in taxable dividends we get each year and we’ll be close to two years of our full-of-fluff $40,000 annual budget.  And then there is the $2,000 to $3,000 per month that this blog and my little Early Retirement Lifestyle Consulting brings in right now.

To summarize, I might need to figure out a strategy for all this cash on hand.  It’s invested at 1% in a FDIC/NCUA insured money market at my credit union right now.  I could move some of it to 1.75% four year CD’s (with 90 day interest loss for early redemptions) at the same credit union with near-zero effort.  I’m thinking that might make sense.  Bond fund yields don’t seem too exciting right now with the Vanguard Total Bond Market Index Fund yielding 1.88% for a fund with an average duration of 5.8 years (that translates to a non-negligible loss of principal if interest rates increase).

I guess this “too much cash” is a great problem to have.  At these recent market highs, we have almost $1.5 million invested in equities, which means our overall liquid net worth is 97% equities and 3% cash.  That’s very aggressive overall.  I’m in no hurry to redeploy any of the $50,000 cash because it feels nice and comfy as a security blanket since we have no bonds in the portfolio at this point.



How was your August?  Did you see big gains or a smaller steady rise in net worth?  Any big shifts in spending if you (or your kids) are headed back to school?



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  1. Love the tp fort! A wise investment, always gonna need that 🙂

    We also have travel as one of our biggest expenses, and are considering Europe for next summer as well. We have travel vouchers from Delta we need to use anyway. We really liked southern France and are thinking Spain might be cool next. With 8-9 weeks you should be able to see a lot of places.

    1. If the zombie apocalypse hits, we’re set with plenty of food and TP (and a baseball bat).

      I’m thinking of spending relatively more time somewhere in southern France (Toulouse? Lyon?) and less in Paris. Less $, less crowded. Spain looks very appealing. Lower COL than France I gather. If you want cool, visit southern Spain early in summer because it gets hot down there.

      1. We flew into Marseilles on a budget airline. Then we hit up the beach on the Mediterranean for a couple days in a town called Cassis. After that we went to the Luberon region and spent the rest of the time in a tiny town that had one butcher, one baker, and one cafe. I loved being in the countryside and especially hitting up the vineyards and farmers markets. Wine tastings were free at the vineyards and a bottle of rose would sell for 5 euro. All the wine was excellent. If you cook for yourself the ingredients at the markets are incredible, we got amazing prosciutto cut straight from the cured leg and fresh truffles. It was one of my favorite trips, I don’t think you could go wrong with the countryside at all.

  2. Ha ha…We’re going on the same cruise out of Jacksonville on Carnival Elation- Oct 31-Nov 5. Looking good on NW update always a good month when there are gains

    1. Very cool! Let me know how the cruise turns out. We’ve sailed from Jacksonville a time or two before but never on the Elation. The boarding process was pretty horrible last time around so fingers crossed they’ve figured it out for your cruise and mine.

  3. Overall, sounds like a great month! We are keeping about 50k in cash as well as we take a year long sabbatical. As we come to the end and decide what this next season will look like for us, we might invest more of our cash. But we also like having that cushion there for now.

  4. I am impressed that you were able to get back under budget after spending over $8,000 on a car! Especially where the car is almost a third of your spending so far this year.

    I think I would do the four year CD plan if I were in your shoes. My first thought is always to throw extra money at index funds, but at 97% equity and 3% cash, there’s no real harm in keeping the extra money relatively liquid. Plus a 90-day interest loss is not a huge penalty if the market crashes and you want to move it back into stock.

  5. Congrats on the great month. I think hanging onto that cash as cash makes tons of sense. It’s a small percentage of your total portfolio, and if a crash comes, you’ll be glad it’s not locked away in a multi-year CD. (Hi, have we met? I’m playing the role of “Captain Obvious” today.) 😉 For sure opinions vary on this, but we’re definitely planning to keep two years’ cash minimum post retirement, maybe as much as three years sometimes. But I know that we are on the more conservative end of the financial spectrum. 🙂

    1. Our credit union offers really good terms on CDs. Not the best rates (1.75% for 4+ year CDs) but early redemption only costs 90 days interest. Which means the break even point vs. 1% money market is about 7 months (get 4 months at 1.75%, lose 3 months interest). If rates go up a bunch tomorrow, then I’ll be slightly screwed, but I figure there’s a large probability the CDs will pay out more in the end. Just not sure if I need some of that $50k for making tax moves later in 2016 (that will save me many thousands in taxes long term!).

  6. Yep, I don’t think there is anything wrong with keeping two-years of living expenses in cash. You already have a lot of money working for you, the rest can stay categorized as piece of mind. Plus , with income still coming in, you can always use that cash as a buying opportunity. But, you know all this. Great to see you are on track this year and that your travel plans are still on track and abundant.

    1. I know it, but I’m also used to near-zero cash buffer while working. So it bugs me knowing I have $50000 sitting in an idle asset that doesn’t quite keep up with inflation. In the grand scheme of things, the extra 4-6% return from that $50,000 probably isn’t worth losing peace of mind. I lose $70k in one day in the markets (cough Brexit cough), and I still sleep like a baby at night (as long as I stick with just 1 cup of coffee in the morning).

  7. Wow, that’s a lot of TP. I think holding cash is perfectly fine too. We have a bit more cash than you and I’m okay with holding it in cash for the short term. Maybe a year or so. We’ll need to pay the property tax and contribute to our Roth IRAs so the cash will decrease a bit soon. I’m curious to see your cash strategy.
    Nice job with your online income. That’s awesome.

    1. I’m planning on some tax moves later in the year like funding a Roth solo 401k and some IRAs so I’ll likely need $30-35k or so to make those moves. I might sell some taxable investments to fund those though. Kind of sitting on the sidelines and not doing too much right now.

  8. August was quite slow for equities but after the strong performance in July all looks good. For most equity-heavy portfolios you reached the annual return target already on July 31. I can live with completely flat returns between here and Dec 31.
    3% in cash may sound aggressive, but when you consider that you can already cover a lot of expenses from dividends (very stable) and blog income (might be volatile), that 3% cushion is probably good for multiple years of expenses without digging into equity principal.

    1. Yeah, that’s the math I’m looking at. $25000-30000 from blog/consulting plus $10000 in taxable dividends covers a typical year of expenses, which means I don’t need to sell anything to survive.

      I’ll be happy with zero percent from stocks for the remainder of the year too. Even a modest 10-15% correction would be nice compared to the rollercoaster days of 2007-2009.

  9. This is a great review Justin. I am glad to see how you keep your low expenses in retirement for a family of 5. And that you still manage to earn enough income in your retirement to not only cover those expenses, but also manage to save money. If this continues, you may not even need to tap into this nest egg.. I guess a 0% withdrawal rate is the holy grail of never having to run out of money 😉

    On the investing front – I think that your dividend income (taxable & non taxable) can cover your expenses well in retirement.. I also understand your frustration with the fact that stocks are “high”. The thing is, they can go higher or lower – noone knows. The goal is to just stick to the plan, and hold tight through thick or thin. Stocks may go down, and bonds may protect from declines, but unless we get a great depression tomorrow, I do not see how bonds/CD’s will deliver much in gains to us over the next decade. Of course, an allocation to fixed income could be helpful to some as they get closer to their retirement date. I have hit a 10% fixed income allocation for the first time in many years, as I get closer to my FI point later this decade for this reason..

    1. Yeah, I’m at a negative 0.5% withdrawal rate it seems. I’m aware the blogging/consulting income can wither away at any moment so I’m hesitant to factor it in to my long term financial plans. The cash it spits out is great though.

      I’m with you on the investing quandaries. I figure stocks will outperform over the long term but I’ve grown to enjoy having a little set aside for spending money when the markets grow turbulent.

    1. Apparently there’s an app for that too. 🙂 I almost decided against buying a graphing calculator and spent the $ on a cheap phone instead. But the SAT won’t let you use a phone, so I figured becoming familiar with a graphing calculator made a lot of sense.

      It is amazing how far tech has gone since the dark ages of 1994-2001 when I was in HS and undergrad.

      1. Try going back to the really, really, dark ages. I have a B.Sc Computer Science 1977 (they hadn’t even invented the term IT then…)
        My best techie purchase was in 1975 buying a Sinclair Scientific calculator. I thought I had died and gone to heaven. The nearest equivalent cost I can think of it was that it was about the same as 2 weeks half board university accommodation. Not having to use logarithm tables, or slide rules to do ‘hard sums’, was total bliss.
        And as for the computer programming – punched cards, in Fortran/Algol/cobol on a mainframe computer that had less processing power than the iPad I am writing this note on!
        Enjoy your color graphing calculator….
        As for phones, they used to be located by the entry doors in a booth at the Halls of Residence. You waited your turn in a queue, put coins in a slot, rang your Mum / boyfriend. As for incoming calls, if you were lucky, someone answered it, and shouted up the stairs, if you were really lucky, someone banged on your door! That mobile phone sounds so good!

        1. Wow, that IS the dark ages! 😉

          I’m just glad I never knew the ancient times before calculators. My engineering professors showed us those “slide rules” and they looked pretty scary.

  10. Sounds like a good month.
    I’m impressed by all the work you got out of the plumber for only $225. Never lose his number. I think it would cost about that much just to get a plumber to show up at our house, let alone complete multiple projects.

    1. Yeah, he’s great. He charges $89 minimum for a service call. For a simple sink p-trap repair he only charged the $89 and threw in $20-25 worth of materials for free because he felt bad charging me $89 for 5-10 minutes worth of work (that I failed to accomplish after an hour or more of struggling). In the future, I’ll probably let a few plumbing tasks stack up before calling him if it’s not urgent because adding on a task or two is usually heavily discounted. He also gave me a $50 cash discount on this visit.

      We also live in relatively low COL Raleigh, the land of no plumber’s union so rates are moderate.

  11. Congrats on another solid month. I love how the “FIRE consulting” has taken off. At some point you’re going to have to start turning people away.

    Also, I too had no clue that color graphing calculators were a thing.

    1. Yeah, I keep raising my rates to control the number of clients per month (kind of borrowed that idea from Financial Samurai’s consulting). So far it’s only ~1/wk max so nothing more than blocking off a morning or afternoon very infrequently.

      As for the graphing calculator, it’s totally a thing. The school supply list called for a non-color version but also included the color version as an option. Same price at walmart for all versions of the TI 84 so we went with the Plus Color version. It’s supposed to last through college engineering math and also complies with SAT calculator requirements.

  12. That’s a great income for Justin, and your spending is always amazingly low!

    North Carolina must be a very affordable place to live. I just can’t get over how cheaply you guys live. We’re easily *double* that out here in the northwest….and I only have two kids!

    We still make it work though! Our dividend income is a little higher, and we go on fewer cruises. 😉

    1. Definitely some cheap living down here in Raleigh. But shhhhh, don’t tell everybody. 🙂

      You gotta fix that cruise deficit. 😉 They end up being pretty cheap “luxury-ish” vacations for us. Basically an all-inclusive floating hotel resort with built in water park (and it ferries you to some interesting places to explore during the day).

  13. Great month, Justin. Anytime the net worth increases, even by a smaller %, it is a good thing. And for someone who is a big dividend investors, it tends to be a slow month. With mutual funds/ETFs you are more limited in spreading out the divvys; you could structure individual stocks that either pay monthly, or with twelve issues that would pay one per month depending on the record date. Nice to have flexibility to look at your options.

    Smart move on the TP; you never have too much. It is one of those things that will be like gold when the zombie apocalypse is going gangbusters. Last Christmas my daughter’s boyfriend thought he was being a smart a-s by shipping me 24 cases of toilet paper. He didn’t realize I would like the gesture, although I am more partial to the dangerously thin house brand from Dollar General. Those rolls seem to last forever when they are on the dispenser. Every $ counts.

    We’ll also be ramping up the travel during the fall and winter months. Eight weeks in Oct-Nov will be in a couple of locations on the ocean in SC, followed by all of Jan/Feb/Mar in NC, SC, and FL. Like yourselves we probably shouldn’t even unpack. Need to look at the cruises for when the wife hits an age milestone in 2018; we’ll look a year or so in advance to maximize discounts and freebies.

    1. Off season beach vacations are great. Enjoy the perfectly deserted beaches and complete lack of crowds. 🙂 We used to go to an NC beach in September/October when it was still warm but not as scorching hot as summer. Rates were 1/3 the summer peak rates AND we got the beach to ourselves.

      Check out the cruise rates now too if you’re interested. This time of year through about January is prime season for extremely low rates. I’m starting to see a lot of last minute rates too.

  14. Ah, the back to school supplies….with two boys aged 9 and 7, know the feeling.
    Out net worth increased 1.6% in August which surprised me a bit as I thought it was a quiet month in the markets. We are in stocks/bonds/REITs at 65/30/5 essentially.

    Regarding deploying capital, I was interested to read today on FInancial Samurai site about structured notes..until I read a recent review by Larry Swedroe which absolutely trashed them. Caveat emptor is what I came away with on reading the Swedroe review. That toilet roll may be handy to clean up the mess from those taking structured notes approaches to investing as far as I understand them….! Maybe more reading to do before I completely shut the door on them.

    1. I read that too. Very interesting, but it’s something I don’t fully understand today. I’d have to do a lot of due diligence before putting any money into structured notes. Counterparty risk is obviously a big one in that game. Getting 100-150% of the SP500 return with no downside is meaningless if the sponsoring bank defaults on all of its obligations and you get 0 back (or whatever the bankruptcy trustee sees fit to pay you as a low level creditor).

  15. If you’re okay making 12-15 small purchases and an ACH deposit from some other account then there are some bank accounts that have higher yields.

    Consumers Credit Union has a checking account with 4.59 APY on up to $20,000.
    Connexus Credit Union has a checking account with 1.75% APY on up to $25,000.

    I’m sure there are others.

  16. Justin, take a look at some high yield checking accounts. They usually have some hoops to jump through like a certain number of debit card transactions and they have deposit limits but still nice. Lake Michigan CU for instance pays 3% on up to 15k if you have direct deposit and 10 debit trans.

  17. You’re lucky your credit union pays that much. Down here it is 1% for a 5 year cd. The bank is a little better at 1.49% for a five year cd. Don’t understand why rates vary so much by state.

    1. I’m lucky to have access to a big local credit union. They always have much better rates than banks offer. Though I might need to shop around other CU’s to see if any have even better rates without hoops to jump through.

  18. I appreciate your honesty in sharing your fears of selling stock. Even with the 4% rule it’s scary to sell capital. Seems like nearly every early retiree actually finds another income source, whether it’s blogging, consulting, or a small side business. I’d love to hear from folks who don’t have any other source income aside from their investments, but I guess they are probably not blogging!

    It’s something to keep in mind as I close in on my FIRE plan- do I need a supplementary source of income? How much? What should it be? Or perhaps I just need more conservative goals? Or maybe we are all worrying too much….

    1. I’m not too scared to sell stock, but just don’t need to right now given the growing cash stash.

      I had it all planned out to live off of the portfolio and this side income sort of fell in my lap. No way did I ever guess I’d actually make any real money from the blog!

  19. Crazy thing about the TI-84…. I had to buy TI’s for both DD’s and I’m pretty sure the first one was a TI-81 and I paid WAY more that you did and you got color graphics. The really crazy thing is I bought a TI-81 at a yard sale this Summer….for a quarter….yep a quarter….But it needed a battery….crazy how technology depreciates. Put the new battery in and works perfect!
    As for the plumbing you may have been wise. I’m a DIY guy at home and on rentals and have found sometimes those shower devices can be “doozies”. MANY times it’s just easier to cut the supply lines, replace the old device with a brand new one WITH new supply lines. The new “sharkbites” make this work a lot easier than it used to be….

    1. I think I paid a lot more for my old TI 81 / 83 or whatever I had back in the mid 1990’s. Fortunately it lasted me all the way through college, so not too bad.

      The plumber did what you suggest – cut the supply lines and put on new ones with sharkbite joints. I figure if it took him a few hours to do all that work it would take me 3x as long minimum (plus a couple hours to run to Lowe’s a few times and consult youtube).

      1. I’ll tell ya Justin. The guy that invented “sharkbites” should win the Nobel Prize….IMHO!! A bit expensive BUT a great time/hassle saver. I’ve actually used these when replacing a water supply line from the meter to a rental house interior….And you can re-use these….I’ve done it!

  20. I don’t think there is anything wrong with keeping that much cash on hand, especially with interest rates being so low. The opportunity cost is very small compared to your overall return of the portfolio. At some point trying to scrape out an extra 0.25% by jumping through hoops becomes over-optimization. Like you pointed out with the plumbing example, sometimes your time is better spent.

    Although you could kill two birds with one stone; research the heck out of managing large amounts of cash and write a blog post about it…


    1. I’ve thought about a blog post on “managing your cash reserve” or “The cash buffer – how I stay sane with a 97% equities allocation”.

      Though I’ll have to figure out my strategy before writing about it, huh? 🙂

  21. I love your blog. I know very little about technology. Can you elaborate how you make money with your blog? Thank you.

    1. Mainly affiliate advertising – someone clicks on something and signs up for something or buys something and I get a commission from the seller/service provider. Google Adsense also.

      Many bloggers add on consulting services, freelancing, books, and courses. The blog essentially advertises the various products and services (you like the blogger, you’re likely to buy their courses or books or consult with them).

  22. I must say as always I am impressed with your numbers. Your budget is so predictable and low (notice the envy:) ). In particular your back to school supplies were a fraction of what it cost us this month. How do you manage the clothing budget so low with the kids? Would love to have some tips. Thanks for another great post.

    1. We actually spent a little more on school supplies but used some freebie walmart gift cards so it didn’t hit the spending report.

      For clothes, we usually shop at inexpensive places (thrift store, target, walmart). The crazy thing is we’ve picked up brand new $100 pairs of jeans for $1-3. I recently got a pair of shorts there for $3 with the Jos A Banks tags still on them. Another example – I noticed shorts on the clearance rack at Walmart for $5. And actually some nice light weight materials too, which I was hoping to find to pack for our Europe trip next year (just carrying bookbags). Some say the clothes at walmart aren’t the most durable but I’m not looking for durability in $3-5 pairs of shorts (though they tend to hold up well enough).

  23. That’s cool you found such a great cruise deal, 810 bucks for 3 people is a steal. I need that connection asap. So do you think you are on pace to hit 2 mill by 2020? They say investments double every 7 years. I am slowly building my nest egg to retire by 50, not as young as you but still early.

    1. If you’re serious about the cruise, there are many deals out there. Check out Travelocity and sort by “price per night”. Lots under $45/nt. The same cruise out of Jacksonville looks to be more expensive but there is one the week after we sail that’s about the same price.

      Will we hit $2 million by 2020? That could happen. It would only be a ~25% increase from today’s net worth which works out to about a 7% annual increase.

  24. Man, it’s tough for me to understand how your expenses can be so low. I’m going to just run down my expenses for August and compare to you.

    I’ll ignore the house payment as I know your house is paid off. I have $113 for phone expenses. This is a bit high for me. I use Republic but my router failed so my wife and son turned on their data plans. I didn’t, so my phone was still under $12. I have a daughter on Ting which I do because I managed a free (almost) iphone with a credit card offer, but with Republic you have to use their specific phones, so I couldn’t use them. She was $29.

    Water for me was $50, electric is high for me at $134 maybe due to heat, gas was zero, maybe I overpaid last month. But that’s near $200, you’re at $72?

    We’re a family of 4, my groceries are typically around $800, it was $700 this month, so we’re close on that, though I think you’re normally a lot lower.

    I had to pay car registration and car insurance in Michigan is very expensive. $338. My very old cars have been good to me, but repairs hit big time this month. Tires and a pretty major repair. $1300. Gasoline was $164. So cars cost me $1800. Brutal.

    My daughter is in gymnastics, we home school, school photos cost money apparently. I have $361 in my “kids” category.

    Do you do any charity? I couple that with gifts. There were some graduation parties. $150.

    August was the month we took our major vacation for the year and also my wife flew out of state to travel with some friends and family. I got the free airline ticket via credit card. Our major vacation was partly camping in state, partly staying in the cabin a friend owns, also in state. $1060 for all of that. Not bad I figure.

    My son updated his glass prescription, I had a tooth problem, there was a doctor vist. $862 in medical. I have a high deductible plan. I do max out my HSA and I don’t withdraw from it per Mad Fientist’s recommendations.

    I have a miscellaneous house category. I bought a bike rack for the car. I literally broke my office chair, so I found a decent replacement at Costco for $135. I had my virus protection software expire to the tune of $95. I could uninstall and install a competitor at around $65, but I’m being a bit lazy on that. My work schedule is not always awful, but lately it has been, so I’m giving in a bit.

    In the end, ignoring the house payment, I’m at like $6500. This is bad for me and I get that there were some unusual expenses this time, but my average for the year is $4200. If we take away your car purchase are you spending like $1700/mo?

    1. I forgot eating out. $362. Terrible. On the plus side $100 of that was covered with gift cards via credit card rewards. It’s really more my wife and she’s sick of my frugal ways nagging her about spending, so lately I more just let this go. I do eat out a bit myself.

    2. I guess it comes down to the fact that I’m able to cut expenses in most of the categories you list. Phone is near zero (Freedompop for me, $10/yr for a dumb phone for Mrs. Root of Good, now used by our oldest in middle school until we upgrade her to a free Freedompop phone which might be a hand me down Samsung Galaxy S6 from a brother in law or a $100 S4 from ebay).

      We don’t drive a lot so car expenses are very tiny. I just bought gas in September and it was $35 for a tank full. Should last into October.

  25. Hi Justin!
    Just want to say how much I enjoy your blog- I have been following you for over a year now as I try to get up the nerve to take the plunge into Pre-retirement –as I refer to it.

    My huge fear has to do with healthcare. We are in our 50s- my hubby retired several years ago at 51 ( we have no pension) just the nest egg we have accumulated. We have had FU money since we were in our early 30s and have taken several sabbaticals so to speak- but always usually with one of us having to work in order to have health insurance.

    I was excited when the ACA came into being- as I thought that finally we could both leave our jobs at the same time and travel for extended periods of time -etc without the worry of not being able to get health insurance– or getting health insurance perhaps, but it consuming half or more of our budget. ( Our assets are such that we should be able to comfortably draw 40+K a year @4%).

    I have read your posts on getting health care thru the ACA and been encouraged– but just learned this week when my husband called for an appt with our family doc and told them we would be switching to ACA plan next year –when I plan to leave my employer based insurance- that they do not accept any of the marketplace plans!

    Hoping you will do some posts on your continued experience with the ACA- and their providers. Did you have to switch to new providers when you switched to an exchange based plan? This is my biggest worry- and has been for years- thus why I am still working. I really thought the ACA would solve this problem- but when I hear on the news that more Insurance companies are dropping out and learn that my doc does not accept any of the exchange plans–it makes me want to move to Canada. But – and I have actually looked into this a bit- it does not look that easy to do.

    Thanks again for such a great blog and any encouragement or advice you have is much appreciated!


    1. Your concern about switching docs and limited networks for ACA exchange plans is legitimate. And I would be concerned about any HI plan in terms of network of docs and whether your current docs are in network because it’s not just an ACA exchange policy problem! So far we haven’t have to switch doctors or our dentist when we switched to an ACA exchange plan, however that did happen once several years ago when we switched Mrs. RoG’s insurance while she was still working (so it was a concern waaaay before the ACA ever existed). Our old employer provided plan and our current insurance do not cover one of the major nearby hospitals either (but that’s been an ongoing issue for several years and not related to the ACA). We still have two other major hospitals that are very close.

      I believe we will be forced onto Blue Cross Blue Shield for 2017 since they seem to be the only insurer remaining for much of North Carolina. Our docs are all in network, and we might finally get access to the one major hospital that’s been excluded from our network for a very long time under Unitedhealthcare.

      If you can bear it, I’d consider switching doctors to one that’s in network. Lots of good doctors out there!

      1. Thanks Justin!
        Really appreciate you input. You are one of the few early retirees I have come across that uses the exchanges. I know that some have deals thru spouses -and we have friends that were teachers and get insurance thru the State teachers Retirement.

        Yes, I told my husband we may just have to look into switching docs- I like her- but she is a GP and honestly, does not do that much for us other than send us to someone else if there is anything more complicated than a sore throat. We are both pretty healthy ( knock on wood) no chronic conditions to be treated or meds to be taken on a regular basis- but it is a concern as the years pile on.

        I look forward to hearing of your experience this coming year with the exchange in NC. I am hoping to pre-tire end of Jan/ early Feb in 2017. Will use the change of status if past the std enrollment period.

        Anyway, if my choices are b/t staying chained to the job M-F and not being able to take more than 2 wks off at a time…I will switch providers :). I often think of you –and your posts where you describe laying in your hammock and reading- and try to visualize how relaxing that would be- if it did not all end come Monday. If things go as planned- I have about 18 Mondays left- LOL- yep I am counting them down- I especially hate Mondays.

        1. Yeah, I can’t imagine working indefinitely just to keep access to a certain doctor. Unless my life was literally dependent on seeing that doc on a routine basis. It’ll be a transition, but you might find that doc taking insurance eventually and go back if you don’t find a new doc that you like.

          Good luck on your remaining Mondays! I just now realized it’s late Sunday night and that means work in several hours for most people. 🙁 I’m thinking how the museums downtown will be less busy tomorrow and what I want to do. 🙂

  26. I loved your Madfientist podcast, happy to see that it boosted up your blogging income!
    Anyway, more than 4K blogging income seems very very high. I’m really curious how this breaks down by income sources. I don’t know if you shared it in this blog or if intend to do so.

  27. Cheers for the update Justin! Looks like you’re continuing to kick goals there, which is awesome.
    As for me, August was decent although not spectacular, it’s likely about an evolving process rather than perfect and that’s what makes life fun! 🙂

  28. “Overall liquid net worth is 97% equities and 3% cash.”

    Holy shit! That is very cowboy 🙂 I don’t have the stomach for it (we are at 60/40) but J.L Collins would be proud.

    Oh and I didn’t know you guys booked a 2nd cruise! That’s very fair since Julian will get to go, to make up for being left behind on the first one. And man, those cruise deals are good! We used to spend $800 each on a single cruise while we were working. *hangs head in shame*

    Looking forward to seeing which countries end up on your Euro 2017 list!

    1. Yeah we’re pretty cowboy about the asset allocation. 🙂 Do cowboys ride rollercoasters?

      Very excited about that second cruise. Hopefully Julian behaves well and doesn’t jump overboard! You guys should snag a cheap cruise when you’re in the SE United States.

      We’re working away on the trip planning for Europe. So many countries, so little time (only 8-9 weeks). I’d like to chat with you at some point and pick your brain on different destinations and routes, etc. I just read your Germany post and saw Stuttgard was a standout in Germany.

      1. Yes we should definitely chat about Europe!

        If you do go to Stuttgart, let me know how the spas are! (We didn’t get to go because of the “washer incident” 😛 By hey at least we made 6 bucks!)

  29. I hope you don’t mind if I ask a question here. My husband works at Wal-Mart and we have medical insurance through them for our whole family. It is soon time for the annual enrollment (and the only time you can make changes). We have always had the lower premium, higher deductible plan, but they also have an HSA plan. I’ve always read good things about HSA’s. (tax savings, etc). However, with WM, you end up spending more money, so it seems to me like you wouldn’t be coming out ahead. Do you have any thoughts on this? I really don’t know much about HSA’s. Thanks in advance.

    1. I’m not sure. Really depends on the cost of the premiums versus what your typical out of pocket costs will be. If you’re very healthy, go with high deductible, lower premium cost. If you have medical needs that are $$$$, lower deductible and higher premiums are probably worthwhile.

  30. Nice blog income! That’s great you have some vacations lined up, always nice to have something to look forward too. Your cash “problem” is nice to have. Sometimes it is best to hold onto it. Perhaps we will get another stock buying opportunity in the near future.

    1. Yeah, we might have a buying opportunity pretty soon. I need to do some 2016 year end tax planning and make some 401k contributions so it might be a good time to invest some cash if it drops.

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