And just like that, our summer break is over. The kids have been back in school for a week already and us parents are enjoying our peace and tranquility during the middle of the day. The summer weather, however, lingers on. It’s been hot and humid for the past week. I’m looking forward to real fall with it’s cool mornings and lower humidity.
Financially, August treated us very well. Our net worth went up by $14,000 to $2,098,000 thanks to mildly positive stock market returns. Our income remained very strong in August at $5,923 while our expenses remained rather modest at $2,565 for the month.
Any month where your income exceeds spending and your net worth goes up is a good one! Now let’s jump into the details.
Investment income totaled $407 in August. Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December, which means this month’s dividends are lower than end of quarter months. August’s investment income came solely from interest on bonds, CDs, and money market accounts. More on our dividend income.
Blog income, shown as “other income” in the chart, increased significantly to $4,588 for the month of August. This is a little misleading since I received two months’ worth of checks from one advertiser. September will be lower as a result. Though in general, blog income is ticking upwards right now.
My early retirement lifestyle consulting income (“consulting”) was $849 in August which was significantly higher than June and July’s results. It’s been slow going in September so far, so maybe I’ll get some “vacation time” if this lull in business continues.
I struggle with charging $240 for a two hour consulting session. However a recent kind note from a client makes me think it’s a fair trade. After our session concluded, he wrote to let me know that our discussion led him to uncover a huge mistake by his tax preparer which in turn led to a $5,000 tax savings. And that tax savings will be available every year in the future!
Ok, back to my monthly financial update. Deposit income of $79 came from the Ebates.com and Mrrebates.com online shopping portals (some of which was earned from you readers signing up through these links).
If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card. We continue to accumulate cash back from lots of different online retailers for travel bookings, gift cards, and general merchandise purchases.
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).
Tracking spending was one of the critical steps I took that allowed me to retire at 33. And it’s now easier than ever with Personal Capital.
Now let’s take a look at August expenses:
In total, we spent $2,565 during August which is roughly $800 less than our target spending of $3,333 per month (or $40,000 per year). Top expenses for August include travel and groceries (much like last month’s spending).
Detailed breakdown of spending:
Travel – $1,557:
You would think that after spending a month in the Bahamas this summer we would want a looooong break from being on the road. You would be wrong!
We scoped out a last minute travel deal on Princess Cruises out of Fort Lauderdale, Florida. In late September we’ll climb aboard the Caribbean Princess cruise ship for a ten day voyage through the Caribbean. Ports of call include:
- Princess Cays, Bahamas (private island)
- St. Thomas, U.S. Virgin Islands
- St. Kitts
- St. Lucia
- St. Maarten
We’ll also have three full days at sea to relax! We have visited Princess Cays, St. Thomas, and St. Maarten before. The islands of St. Kitts, St. Lucia, and Antigua will be all new to us.
This is a cruise for just me and Mrs. Root of Good without any of the kids. We don’t really need an excuse for a getaway, but this time around we’ll be celebrating twenty years since we first started dating way back in college.
The cruise fare itself was $1,316 total for the two of us. Once on board we will pay another $270 total in “gratuities” for the 10 day cruise ($13.50 per person per day).
To get to Fort Lauderdale, we used 7,500 British Airways points each plus paid $5.60 for taxes for a nonstop Raleigh to Miami flight. The return trip (from West Palm Beach) was 4,600 Southwest points each plus $5.60 in taxes. We’ll uber or ride Tri-Rail to get between the Fort Lauderdale cruise terminal and the airports.
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Other travel spending includes another $250 of Airbnb gift cards bought at a discount when Raise.com had a sale. I’m buying as many Airbnb gift cards as I can since we’ll be spending eight weeks in Southeast Asia in Airbnbs.
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Groceries – $498:
We are back to our normal grocery shopping routine. With Aldi, Lidl, and a Superwalmart on the same street corner, we get some incredibly good values 1.5 miles from our house for about $100 per person per month.
I’m getting on the gochujang wagon with my first attempt at Korean cooking. I googled recipes for bulgogi barbeque and found an interesting slow cooker recipe. After marinating thin sliced pork loin for two days, into the pot it went. Very good!
General Merchandise – $114:
Tons of random odds and ends at Walmart. Two (!!) alarm clocks, a mirror for the wall, some children’s gifts on clearance, a dustpan, and some back to school stuff mixed in there.
Restaurants – $113:
We ate out a lot more than usual in August:
- Chinese buffet – $40
- Pei Wei take out pad thai x 5 – $22
- Indian take out – $19
- Bojangles Fried Chicken – $12
- McDonald’s (2 trips) – $17
Given our grand vacations, we are rarely at home during the summer. Since we were here this year, we wanted to treat the kids to some Americana. And there’s not much more American than a Chinese buffet, fried chicken, and McDonald’s.
We took advantage of discounts in the McDonald’s app where almost all their sandwiches are $1 while other deals vary day to day such as $1 large fries or $0.50 ice cream cones.
Gas – $77:
We filled up the tank twice in August. We drove more than usual since we took a day trip to the foothills of the Appalachian mountains to visit my 90 year old grandmother who is in a nursing home.
The kids were also in summer camp for a couple weeks in August which led to higher than average driving.
Now that the kids are back in school, we will be driving less.
Education – $58:
School supplies for three kids. We had some leftover from previous years so it wasn’t too expensive this time around. And no new TI-whatever $100 graphing calculators to purchase this time around.
Electronics – $39:
For home phone service, we use Google Voice connected through an Obihai adapter. The old version of the Obihai that I used, the Obi100, was no longer compatible with Google Voice due to software incompatibility.
I upgraded to an Obihai Obi200 for $39.99 so that we can continue to get home phone service with Google Voice with no additional monthly charge.
We tried going cell phone only for a month and it was mildly inconvenient. $39.99 is a small price to pay to have the convenience of a home phone.
Entertainment – $37:
$37 for pizza for our 12 year old’s birthday party. I bought gift cards through raise.com at a 15% savings.
Cable/Satellite – $29:
2 months of internet service at $14.99 per month for 30 mbit/second download speeds and 4 mbit/second upload speeds with no data caps. We qualify for a special rate package for “low income” households with children.
Utilities – $25:
Natural gas bill for one month.
Other utility bills were paid in previous months as a lump sum.
Note on Health Insurance and Utilities
- Health insurance premiums don’t show up this month because we prepaid the premiums in January and February for the whole year. If paid monthly, premiums would be $40 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income.
- Utilities are typically paid in lump sums in order to fulfill the terms of sign up bonus offers on credit cards. We still have around $1,000 worth of positive balances on our electric and water accounts.
Total Spending in 2018
Throughout the first eight months of 2018, we spent $19,210. That’s about $7,500 less than the $26,667 budgeted for the first eight months of our $40,000 early retirement budget.
We are intentionally trying to spend more right now. The stock market is up. My side hustle income is up. We’re flush with cash. Might as well live it up while times are good, right?
I’m on a perpetual hunt for a good travel bargain to fill out our vacation schedule for the next year. In addition to our 10 night cruise this fall, we have already booked two cruises with the whole family over the Christmas holidays and spring break. I still owe a couple thousand dollars on those cruises.
In March, we will celebrate our fifteenth anniversary. We hope to book a one to two week trip for that occasion. Mexico City is a front runner. Swanky Airbnb, coffee at sidewalk cafes, a bunch of tacos, and some cervezas and vino por la noche. And maybe we’ll visit ancient ruins and a volcano while there.
In summer of 2019 we will travel to Southeast Asia for around eight weeks. We will be planning that trip in more detail during late 2018 into 2019. I’ve already accumulated $1,500 of Airbnb credit so spending on lodging for this trip might be relatively minor during 2018.
Otherwise, we don’t have a lot of large planned expenses for the remainder of 2018.
Looking out several years, we’ll have to figure out the teenage driver situation. In five years, our oldest will be in college. I’m not trying too hard to spend a ton right now given these long term higher spending requirements. But we are certainly feeling flush with cash at the moment.
Monthly Expense Summary for 2018:
- January 2018 – $1,281
- February 2018 – $3,108
- March 2018 – $2,025
- April – $1,977
- May – $3,366
- June – $3,554
- July – $1,389
- August – $2,565
Summary of annual spending from all years of early retirement:
Net Worth: $2,098,000 (+$14,000)
Our net worth is slowly edging up. August generously added another $14,000 to the pot, bringing the total to $2,098,000.
Throughout the month of August, we didn’t see a lot volatility in the stock market. I assume all the Wall Street traders’ computers were on vacation in The Hamptons so they couldn’t whipsaw anything with their finely tuned algorithms.
In looking at others’ investment returns, I can tell that I’m not doing quite as well as them. Since I have 50% of my investments in international index funds, my portfolio doesn’t move in lockstep with the US stock market. International markets are down about 3% year to date (in US dollar terms) versus 10% gains in the US markets.
With a 13% spread between US and international investment performance, I would expect a significant lag in my own investment results. No surprise there!
So what am I doing? Nothing in general, but I did just rebalance about $50,000 from US investments into international investments according to my asset allocation policy.
I don’t make a lot of investment moves during the year, but it was time to rebalance. I’ll take another look in a few months if US markets continue to outperform international investments and rebalance again if necessary.
Ok, back to doing nothing with my investments and focusing on more fun things.
Like rebuilding my Netflix queue after briefly reaching Netflix Zero Queue by accident. My wonderfully intrepid six year old enjoys changing my Netflix profile picture. In the process of doing so, he accidentally deleted my entire Netflix profile. Gone are my watch history, current viewing position in various shows, and a lengthy list of shows and movies I want to watch eventually.
Gone! Gone I say!
It’s liberating in a way, since I get to rebuild my leisure to-do list from scratch. No more half-watched series that I feel compelled to finish yet don’t really care to. And perhaps in the process of rebuilding my queue, I’ll discover some new treasures.
And on that note, I’m off to work through my fledgling Netflix queue.
How was your August? Any big money moves? Anything major planned this fall (money-wise or otherwise)?
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