August 2018 Financial Update – Back to School Edition

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.

 

 

Income

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.

 

“Our” hawk eating our neighbor’s “pet” rabbit. :/  At least we think that’s where the rabbit went. It’s been missing ever since this luncheon.

 

No hawks can catch this hummingbird!

 

Expenses

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
  • Antigua
  • 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.

If you want to score some free travel from credit cards, there are several cards currently offering 50,000 points or more. These points can be redeemed for $500 cash or $500+ in free flights or hotel stays. Compare travel credit card deals.

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.

Save $40 off your first Airbnb stay with my airbnb referral link.

 

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.

Want to find out who won the grocery wars between Costco, Walmart, Target, and Aldi?  The answer will shock you!

 

Bulgogi pork BBQ in the slow cooker

 

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!

 

Quinoa and caviar. Living fancy up in here!

 

 

 

 

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.

 

I make homemade pad thai a lot. But I also enjoy take out pad thai.
The only good thing on the Pei Wei menu in my opinion.

 

$19 worth of Indian take out. Mostly butter chicken!

 

Sushi is pretty decent considering it comes from a $7.99 Chinese buffet.

 

 

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.

 

This fall once it cools off, we’ll be driving to the nearby nature preserve for more hikes like this!

 

 

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.

 

Homemade banana bread birthday cake. Mrs. Root of Good is perfecting her craft.

 

 

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.

 

We took advantage of a slightly cooler than normal summer morning and fired up the grill for a family cookout!

 

Steaks and sausages. Not shown: the burgers and hot dogs.

 

 

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?

 

Spending money and traveling is fun. So is hanging out in the back yard!

 

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:

 

Summary of annual spending from all years of early retirement:

 

We played the tourist in our own town by taking a stroll through the Arboretum in Raleigh. Totally free!

 

 

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.

 

To squeeze the last bit of fun out of summer, we had a FI-seeking friend and her three kids over to play.  And our trees are finally tall enough to be shade trees!

 

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.

 

So sweet. On the surface… 🙂 This little guy just started first grade!

 

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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108 comments

    1. Justin often pre-pays these types of expenses to meet credit card spending minimums for travel bonus points…so it’s not as if he doesn’t have these expenses. Once he discovers how to reduce these expenses all to zero (legally) – I’m sure he’ll blog about it. Till then, he’s still a “mere mortal” tax-and-utility payer…just very efficient!

        1. bellbang,

          Most cards waive the fee the first year. I have accumulated close to 2 million miles/points the past few years and paid very few annual fees.

            1. You rarely need to keep the card opento maintain points. You just need some account activity every so many months, depending on the program.

            2. That’s the ticket – We sometimes pay ~$99 annual fees to get the bonus (and those end up in my monthly spending report as a “travel” expense). But once you have the points in a hotel/airline mileage program, it’s common to have to generate some activity every 12-24 months to keep active. Often it’s as simple as buying a $5 item through their shopping portal to earn 5 points.

    2. Financially Free, Justin prepays a lot of expenses. He gets a rewards credit card with a minimum spend requirement and uses it to prepay his utility bills. That way, he gets the reward but doesn’t actually spend any “extra” money.

    3. What the others said – we prepay a lot of expenses in a lump sum. They’re still in the annual spending but not recurring every month. 🙂 It is a nice feeling though, to see low expense months, even if it’s a form of financial self-deception.

  1. Our kids just went back to school yesterday, talk about a different environment! I have 2 weeks before I go back to work so I’m trying to make the most of it with getting projects done around the house that are difficult with the kids around, I may try to fit in some Netflix binging as well. I have the same issue with my returns lagging, I’m roughly 35% in international. Long term I think we will end up ahead with these larger than norm percentages in international. Congrats on 20 years together!!!

    1. dollar is gaining stronger position starting july I expect more dip in asian stocks next few months
      though the inflation in USA looks made up I think this momentum will be on roll until end of next year Let us see

  2. Love how you qualify for a “special rate package for “low income” households with children.” though.
    Keep making the best of your life! You’re doing a great and inspiring job!

    Kind Regards,

    Mr WB

  3. Justin – your consulting session with me last August in Raleigh was worth every penny! Even preparing for it forced me to have a hard look at income, expenses and long term goals. You confirmed some of my thinking, and (appropriately) challenged other aspects of my plan.

    So never doubt the value of what you are offering! It’s not often that someone with your actual, proven experience of retiring so early is available for one-on-one coaching!

    Regards,
    Peter

    1. Good to hear the positive feedback, Peter. 🙂

      I feel like 98% of the sessions lead to some very productive outcomes, or at the minimum a confirmation that the client hasn’t overlooked any critical items. Peace of mind is worth a lot!

  4. Great to see that things are still working well for you and I love that because of your intentional living you’re in a position where you’re actively trying to spend more through the end of the year. Good luck with that! I too have some pretty sizable positions in international funds so my performance is also lagging. but, like you, I’ve just left it alone for now. Sooner or later it’ll come back…

  5. I understand the concern about charging $120 per hour for early retirement consulting while one of the pillars of it is to spend less. However, I do think that it can be very valuable and definitely worth the price (for example, high earners with busy schedules). The feedback you are getting proves that you are helping people!

  6. Hi Justin. I’m curious about your home phone setup. No monthly bill for phone service sounds great. Does google voice include free calls to/from Canada and Mexico? We currently use vonage which includes toll free calls to many countries but it comes with a monthly cost of $35 or so. And sound quality can be spotty at times (though I suppose this might be my internet service or issues with cable modem or router).
    Thanks for your work on your blog. I always enjoy reading your posts.

    1. In google voice I think you need to pay for mexico calls. However it should be free within north america that includes US and Canada
      For asian countries I spend one cent per minute. This is very reasonable
      I used vonage before few years and found an easy alternative in form of google voice. You can easily link your cell phone with google voice and use it like prepaid card. I think justin maintains a home phone service for additional safety purpose, May be he can explain why he has this $39.99 device inplace

    2. Quality seems to be pretty good with Obihai/GV. Definitely better than cell quality!

      GV says calls to Canada are free “from the US and Canada” but 1 cent/min everywhere else. Mexico is 1 cent per minute to most phones. I think I’ve paid a total of a few bucks total in international charges to call Mexico, Argentina, and Spain in the past 10 years.

    1. I track the cruise deals online in expedia and some other cruise specific travel sites online. Dont see much of difference on standard cruises like MSC series, carnival cruises etc
      Though Justin makes it a point to lens through deal and each and every aspect of his spending. Kudos to his dedication after all this big chunk of money

  7. very nice justin. Think about alaska for upcoming summer break in 2019. Beautiful place

    Based on me analysing your travel pattern I see that you always opt for low cost travel.

    Even while at europe you chose to travel to low cost countries. I did not see you travelling to high cost areas like paris, switzerland, iceland etc

    Are you intentionally saving on this (or) what is the strategy that you rely on while travel planning

    Also, when it comes to the travel rewards credit cards we need to pay fees. You dont include that as expense but only include little taxes towards expense. Can you explain on this?

    1. I’d love to do Alaska some day, and one of the kids mentioned it specifically!

      As for high cost travel destinations, I find that you can enjoy similar places for a tiny fraction of the cost. Slovenia instead of Switzerland for example (if you want to see the Alps). Skip the lines and all the tourists and enjoy prices 50-75% lower! That said, we’ll eventually make our way to other high cost places. Paris would probably be the first choice among the three you mentioned though I’d rather spend more time in a smaller city in France. Not to save money necessarily, but to avoid the crowds and tourist areas.

      But we do go to some higher priced destinations. Since retiring, we’ve been to NYC, Washington DC, Toronto, Venice, Amsterdam, Munich, etc. To be honest, I enjoyed a lot of the lower cost of living cities/countries more than these higher cost places.

  8. So many great food photos. Even your wildlife photos are about eating! The hawk may not catch hummingbirds, but a preying mantis can wreak havoc on the things. The videos on youtube are terrifying in a Starship Troopers kind of way. Don’t say I didn’t warn you.

    Your mention of “trying to spend more” is timely for me. I had the luxury of a three-hour chat with my dad at his house last Saturday; he’s got the enviable position of a paid-off house, plentiful savings and TSP, a six-figure pension, and very frugal tastes. His metabolism at 70 isn’t what it was for the first two thirds of his life — I’m trying to convince him that two-for-one Maggiano’s deals and the dollar menu at McDonald’s aren’t worth it when he can easily afford to spend a bit more and put healthier food into his body. It can be an uphill struggle.

    1. they are used to habit of spending less. When they look at each and everything all of these come with tag
      Dont mean to say that healthy items are bit expensive but for people who had been way too frugal from their humble beginnings it would be extremely difficult to think about spending 🙂

      1. Heh, that’s the funny thing… he grew up solidly upper middle class materialistic. When dad got married and had kids he toned it down a lot; they didn’t own a car with power windows until after my brother and I had graduated from college. And now that mom’s gone, it’s like it just doesn’t occur to him to eat healthy food. 🙁 I almost want to sign him up for Blue Apron or something to make sure balanced meals happen.

  9. Great job with income and expense, as usual. Your income is great. Pretty soon, you’ll be making too much to be a low-income family anymore. What will you do then? Cut back on work? 🙂
    I’m looking forward to your SE Asia travel. That sounds epic. I want to do that too, but that might not be possible in the near future with my mom’s dementia problem.

  10. Looks like another great month. I did some rebalancing yesterday. The hit to emerging markets just screamed it was time to push some of the US gains to something more diversified at a good value.

    People laugh at my international exposure (which is similar to yours), but I’m planning for another 40+ years, so investing in “the world” seems like a more diversified/safer investment than just “the US.”

    My cooking skills are minimal (especially in comparison to yours). I do make a slow cooker butter chicken (using a pre-paid package mix) that’s good enough for our tastebuds. It’s one of the very lazy ways that I solve the problem of “what’s for dinner?” I can’t imagine actually buying it from a restaurant. That’s when I order my pad thai ;-).

    1. I think emerging markets was my most out of balance sector in my asset allocation. And I think I moved a bit in there earlier this year. I’ve watched it bounce all over and it makes sense to have a slice of that in the portfolio. I think like you do – I’m in it for 40+ years and don’t know what country or region will outperform over the next few decades. Might as well hedge my bets. 🙂

  11. Incredible income this month RoG! You’re really pulling it in for a “retired” guy. 🙂

    As always, your spending is so incredibly low! It’s pretty impressive.

    I’m just happy our oldest son is starting kindergarten this fall. It’s going to have a HUGE impact on our finances and finally bring our expense level under dividend income. Wahoo!

    1. Typically first mortgage is the biggest expense in most of our portfolio. Daycare is second mortgage 🙂
      Justin is lucky to have been supported by his in-laws that saved him a ton of money in daycare expense
      Also, his home price was 100K back then. Properties in raleigh sell closer to 200K in his locality
      I see that schools have very poor rating in this area
      Hope Justin can talk more about how he is able to handle this school situation
      Otherwise for a normal spender all of us spend 10K every year in other expenses, 10k in travel (optional expense)

  12. Good price on that Sept cruise, Justin. I assume it is an inside room since the price is very attractive for a 10 day Caribbean voyage? I know you traditionally do the inside rooms for a low cost.

    Here in TN the kids have been back to school for a few weeks now. They get out earlier due to heat, but have to start during some of the hottest times of the summer, so I don’t get the incentive.

    Can’t recall if you have Amazon Prime but if you do, check out the new “Jack Ryan” mini-series. Very well done, and even the wife thinks it is great. I am still doing the DVD Netflix service. Can’t get the movies I want through the streaming portal, so mailing DVDs back and forth is the best solution. I read recently that Netflix still has 3M customers using this approach, so I am not a lone Luddite in that regard.

      1. I haven’t seen anything that cheap unless you’re talking about repositioning cruises. Assuming you’re talking about $500 including the taxes and port fees (which can be another $100-200+). At least not anything that cheap through publicly available deals through US-based travel agencies.

    1. Yes, 10 night in inside cabin. Though they dropped the rates the day after we booked non-refundable tickets and the oceanview rooms are now the same price as what we paid 🙁 Hurricane season = cheaper rates.

      I’ll have to check out Jack Ryan if/when we sign up for Amazon video.

  13. Check out the Simplified Needs Test for FAFSA application for college financial aid. I’m interested in your thoughts on how early retiree dependents can benefit. Thanks for all your work and incredible model of financial independence.

    1. I heard someone saying that kids education with commitment to join navy upon completion saves a ton of money
      A person with realtime experience can share more details on this

    2. I think you have to be able to file the 1040EZ and after looking into it a while back, it wasn’t worth it to jump through those hoops in my situation. Maybe that will change as I get closer to paying for kids’ college? 🙂

  14. I’ve never seen a hummingbird. It must be nice to have them hanging around.
    Your food bill is so incredibly low! That’s one advantage the US has over Australia – your housing, bills and food are generally a fair bit lower than here.

    1. The hummingbirds are TINY. So cool though!

      Interesting that our living expenses are cheaper here – I didn’t realize that. Is it the foreign exchange rate? I know the Aussie economy has been on fire for almost 2 decades now, right? I imagine that would drive up the COL too.

  15. Luckily Justin is in North carolina. He does not need to disclose asset details for FAFSA financial eligibility and I think it would automatically qualify his kids to avail scholarship without much issue

    1. Ditto on this, although if you sign up for their rewards program you can earn free entrees and they regularly have promo codes. A week or so ago, it was buy one get one free, so we got 4 entrees for a little under $25. We have teens, though, so always add extra protein which is an extra charge.

  16. We have been using GV with ObiHai for a few years now and it works great. I use Google for cell service as well with Project Fi – just $20 a month unlimited talk/text and then $10 every gig of data, though you only pay for what you use. I usually spend $5 in data a month.

    I’m curious about how you are allowed to get low income tax subsidies when you are a millionaire. I’m not trying to criticize you but that didn’t set well with me. Then again, medical premiums are becoming (in some cases already are) just not possible for families to afford at all, no matter how frugal. I had some friends several years ago have to go on medicaid because their health premiums rose to $1800 a month. It was either that or go without food and necessities. It is almost as if we are being “forced” to go on government assistance, or “subsidies” if you will. However, someone pays for it. What are your thoughts about it?

    1. Love the Google Voice/Obihai setup. 🙂 We use Freedompop for free cell phone service and though not perfect, it works fine for our casual cell usage.

      As for “low income tax subsidies when you are a millionaire” – remember we have an income tax and no wealth tax. Low income = you don’t pay much in taxes and qualify for tax credits (like the ACA tax credit). High wealth = no tax impact if it’s tax sheltered and/or you realize income in a careful manner.

  17. Perhaps you could do a post some time on how you and your wife teach your children financial principles and money management ?

    1. That would be a good one! It’s mostly teaching by example and talking over money decisions or why we make the money choices we do. $9000 family trip to Europe for 9 weeks vs. $3,500 for a 1 week Europe study abroad trip for 1 kid through their school.

        1. Oh, I know the chaperones get a good deal out of it. You get to hand select who goes or at least veto those who you think shouldn’t go. They tend to be on the wealthier end of the spectrum (more responsible maybe??). And you get to travel all over for free! I have heard some chaperones complain that “OMG it’s so much work!” but then again I get it – we chaperone 3 kids of our own all over the world and it IS work at times 🙂

  18. Another great report Justin:)
    On the last minute cruise deal, what type of cabin do you book to get such a great rate for two? I was looking at some and $1,500 seems to be the price for one. I obviously suck at travel hacking but hoping you can provide some tips. cheers

    1. This was an inside cabin, though prices dropped the day ( 🙁 ) after I booked. Now the oceanview cabins are the same price as my inside cabin. It’s a last minute deal in the middle of hurricane season so we got a great rate. Cruisesheet.com is my new go-to for cheap cruises. Vacations to Go is another good site. Lots of similarly priced deals this fall and winter if you’re flexible on location, itinerary, and dates.

  19. We have all 3 in college right now and definitely do NOT feel flush with cash! =) With 3 under-25 drivers, we are paying almost $1,000/mo in auto insurance alone. Insurance in the great state of Florida is ridiculous. I have no doubt, Justin, that your family will be just fine though. Thanks for all the amazing food pics. Throw in a recipe occasionally, k?

    1. Ouch on that insurance bill! I don’t think ours will be quite as high in NC. But I’m expecting to feel more like you in 4-5 more years when the college and driving costs are ever-present 🙂

      1. When my mom died, she left behind a fair few Wilson icing tips. They’re yours if I can find ’em and you want ’em! I’ll leave it up to you whether to show your wife this post.

  20. Justin, I’ve been binging on your blog. I like your clean and straight-forward style. I keep seeing that you buy gift cars on raise.com when there is a sale for airbnb cards. I wonder, what is it that consider a good sale? I only started looking at gift card sites recently and so far nothing really jumped out at me. Can you elaborate more on this please?

    1. They run sitewide sales maybe 1-2x per month. Anywhere from 4-10% off plus the usual discount on the gift cards (like 4% off for airbnb is pretty standard). Also have deals on specific categories like travel or dining. Lots of dining gift cards are 10-20% off if one of your favorite restaurants is offered on raise.

      For me, I can use several thousand worth of airbnb gift cards each year so I get as many as I can to max out the discount/coupon when they pop up.

    1. I’m looking forward to it, too! So far we haven’t really planned anything. In fact we won’t buy return tickets from Asia back to Raleigh until next week since the flight schedule doesn’t extend through Mid-August as of now.

  21. I always love these in depth posts. Your blog income is always so impressive to me. As someone who literally just started a blog, this is very inspiring. As always, thanks for all of the info. look forward to the next post.

  22. This is a helpful breakdown — thanks for the candid info! I’m curious if you’re planning any differently on the healthcare front since the ACA has been under siege — carriers are pulling out, current government is trying to dismantle it. In NYC, where I live, so few carriers are on the ACA and none of the major hospital systems take those carriers, that it is already not so helpful. We buy private insurance, but even though we can afford it, I’m not sure how much longer it will be available. A lot of carriers are moving to only insuring larger businesses (I’m a solopreneur). It’s what led us to add Costa Rica real estate to our holdings — geo diversification and a place to go if healthcare becomes untenable. Curious to know what you’re seeing on the healthcare horizon!

    1. Sounds like NYC ACA is rough! Ours in NC is doing pretty well. We’ve always had 2+ networks and I think we’ll be getting a third network this fall (which is really a spin off of the old Blue Cross plan, but still, it’s a new insurance provider). I’ve heard rumors that Blue Cross is actually LOWERING their ACA rates in my county by 20% this year as they are getting better at figuring out the cost of coverage and projecting claims.

      As for what we’re doing or seeing: not much. There doesn’t seem to be enough political will to actually repeal the ACA in full (as in take away the premium subsidies and eliminate the pre-existing condition coverage mandate). 2018 elections = democrats likely to take the House = full stop on further full repeals short of a better replacement (which would be welcome!!).

      That said, Dems could fail to take the House in Nov 2018 and then there might be renewed repeal efforts. From past repeal bills, we would still have 2 full years of ACA continuation after repeal (which would leave us with ACA coverage through 2021). That’s a lot of time to figure out health insurance and/or vote people into office that can come up with a sensible replacement.

      Moving to another country where healthcare is reasonably priced is certainly an option. Not high up on the list at this point though! We’d probably just pay out of pocket for catastrophic coverage if we could get it, and remain here in Raleigh.

      1. Yes, good point about there being time to adjust even if something big happens like a repeal. We’re covered thru end of 2019 and also feel it’s a LONG time by insurance standards to figure out new options should anything change. Thanks for the quick response! Raleigh sounds like a good option insurance-wise.

  23. Great update. I love to see that you’re spending less in ‘retirement’ than you originally estimated. This is usually true for normal retirees and it seems to be true for early retirees as well!

    Enjoy your upcoming trips!

  24. Thanks for the link to the asset allocation. It is interesting to see what other people are doing. I know most FIRE people use Vanguard funds. Do you have any thoughts on the new Fidelity no cost index funds ?

    1. The savings vs Vanguard aren’t that great. My bigger concern is less effective execution of the index fund strategies at Fidelity vs the huge economies of scale at Vanguard (and a lengthy track record of putting clients’ profit first). That said, I own a little bit of the Zero International fund since there are no minimums to buy it. I took some odds and ends in some IRAs at Fidelity and put it in the zero fund.

  25. I have enjoyed following your situation and otherwise. One has to be quite disciplined to keep track of things the way you have. Well done! We are a number of years into our retirement and have really enjoyed ourselves and seen and done a lot of things. I am “the busy retiree” LOL! Thank you.

  26. ” 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!”

    Nice work! That makes the $240 well earned!

    Congrats on another great month and having the kids back at school. 🙂

    1. Not bad at all here in Raleigh. Some power outages but we never lost power. Light to moderate wind, close to 2 inches of rain in a 24 hr period. That’s about it so far but we have another day of similar weather ahead.

  27. The paved area in your backyard looks like it’s big enough for a pickleball court. Check it out! It’s the most fun you can have with a ball, really easy to learn, and great for kids and adults. You’d be able to do it all year round in your location.

  28. we’ve had that google voice/ obihai setup for a few years now and it works great. who the heck is bellbang? i appreciate the “strategery” in getting health insurance and some utilities for cheap. i wonder how long before the weasels in charge account for assets in addition to income? some colleges already do it when accounting for aid.

    1. It would be a pretty radical change from current ACA policy/philosophy to account for assets, too. And a lot more complicated. And would we exclude primary residence value and retirement accounts? I might look pretty good on paper if so! Especially if I used my whole taxable account to buy a nice big new house. 🙂

  29. Hello. I appreciate your site as it is well written and very helpful.

    I’m curious about a couple of things related to MAGI, ACA health care subsidies, and Roth conversion laddering you’ve discussed over multiple posts. If your MAGI is about $40k, and you don’t want it to rise so your ACA health care subsidies remain relatively high to keep your health care costs at their current low level, about what amount do you target for Roth conversion annually? Roth conversions (from traditional IRA or 401k for example) would effectively raise your MAGI higher and result in reduced ACA subsidies (higher health care costs), so what is your target conversion and what is the resultant target MAGI?

    One more question; for someone’s first year of early retirement for which that person elects to enroll in ACA, what income does someone report for the purpose of ACA subsidies? My concern is if someone earns beyond 400% of the poverty level in 2018 (for example) but then retires and files for the ACA for the last part of 2018 or even early 2019, that one’s income is based on that last year of high income and that one must pay the full non-subsidized price of the ACA health plan for at least the first year enrolled. Or can one write in an estimated expected income irregardless of their past year’s income? The subsidies might become available in the second year of enrollment if income drops considerably so that’s not a concern, but I’m just wondering about how to keep costs down in that first year of RE.

    Thanks!
    -David

    1. For MAGI targeting, I convert to Roth in the amount needed to get my total MAGI up to $40k. For example, if I have $10k of blog income (after making 401k and IRA contributions), $10k of taxable dividend income, and $10k capital gains (from selling $20k of stock that had a $10k basis), then total income so far is $30k for the year. I need $10k more to hit $40k MAGI so I do $10k Roth conversion.

      As for the ACA income you input on your application, it’s your income going forward if you’re applying during annual enrollment. If you’re applying mid-year you have to add your year to date earned income plus your anticipated income for the remainder of the year.

  30. I only learned of your blog a few months ago, and am really enjoying it and so many of your suggestions. I’m wondering what do you think of Financial Engines? Are their results and recommendations realistic (trustworthy?), such as for diversification and whether a current portfolio is sufficient to produce the income ranges they say? I have access to receive recommendations through my employer, with the help of the Financial Engines software – I can either DIY it using the software, or get assistance from ‘professionals’. I always get the “green light” which I think means I’m on target with my goals. I can have it run various scenarios depending what age I want to retire, etc. Besides taking into account my 401k, I include other investments, such as Vanguard IRAs, etc, in their calculations. Each year, the professional help is offered free for a few months, then if you like it and retain it, it’s a paid service. I don’t see much difference between the DIY or paid professional, other than, once you agree to a plan, they do the work of putting it in place (transition funds & set up future investment changes), plus they monitor and make recommendations on a regular basis. I never pay for the service, I would rather keep that money and reinvest it! Thanks for any comments you might have. 58 years old and thinking more and more about retirement 🙂 Like many others, biggest concern is health care and medical insurance costs.

    1. I’ve never used Financial Engines so I don’t have an informed opinion. I’d suggest trying a few different retirement planning tools/calculators and if they all give the green light and you’re comfortable with the results then you’re probably okay!

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