Retired at 33. I'm here to share some financial wisdom with everyone.
Does it feel like 2018 is flying by? Less than two months to go until 2019! We’ve been busy during the month of October. We spent the first part of the month aboard the Caribbean Princess cruise ship. Once we returned to Raleigh, we tackled several projects around the house and enjoyed the nice weather outside.
In financial news, you may have heard that turbulent times have returned to the stock market. At one point, our portfolio was down almost $200,000 for the month before recovering to $1,988,000, a loss of “only” $98,000. Income for the month remained strong at $5,352 while expenses remained rather low at $1,784, or exactly one third of our income. In conclusion, our net worth dropped by a significant margin, however our diversified income streams outpaced our spending.
Better late than never, right? Since we’ve been cruising the Caribbean without internet, this monthly financial update and slice of early retired life is about two weeks late. I’ll work on the timeliness in the future. If I have time 🙂
Aside from having fun on the cruise, I’m extremely excited that it finally feels like fall here in North Carolina. The air conditioning is off and the windows are open after a long, hot, humid summer. Time to enjoy the outdoors before it gets cold!
Financially, September was an okay month. Income exceeded expenses, which is always good. We brought in $2,829 in September while only spending $1,342. On the net worth balance sheet, we shed $12,000 in value to bring our net worth to a still respectable $2,086,000.
When you have kids it’s impossible to retire early, right? I found out that may not be true in all cases. Like my own. We have three kids and still managed to retire early. But how is it possible when kids are soooooo expensive?
The US Department of Agriculture publishes the “Expenditures on Children By Families Annual Report” which examines the cost to raise children in America. The headline number that gets a lot of press is the total cost to raise a child from age 0 to 17: $233,610. And that doesn’t include the cost of college!
Almost a quarter of a million dollars seems really high to me, so I’m diving into our kid-spending to see what it actually costs to raise our three kids.
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.
Well folks, today marks five years of early retirement for me. Flashback: on August 26, 2013 I spent the morning sitting in my office at work, catching up on emails after a week long vacation. Then my boss walks in, says “you’re fired”, hands me the dismissal paperwork and I’m on my way. I spend the rest of the morning at home puzzling over my spreadsheets to verify that I am, in fact, financially independent.
Analysis result: I was financially independent. Our initial budgeted spending of $32,000 per year was only three percent of our total investment balance. In other words, way less than the 4% rule dictates.
Fast forward five years and here we are. Five years older and five years wiser. Our kids were age 1, 7, and 8 when I retired and now they are 6, 12, and 13! They are very different people than they were five years ago.
Right after I quit working, I was still in production mentality when I started this blog. I always wanted to do something internet-y and the blog was the first thing that came to mind. After a weekend of googling “how to start a blog” and other extremely basic search queries, I had figured it all out. I registered the rootofgood.com domain name and published my first article on September 11th, 2013.
Have you ever wondered what it is like to be shipwrecked on a deserted island? Would you get bored? Would you starve? Die of dehydration?
Or would you thrive and prosper in your newfound isolation and make the most out of your (hopefully) temporary stay on the beach?
In a roundabout way, our one month trip to Freeport, Bahamas was inspired by this thought experiment. What would life be like in a relatively isolated section of a Caribbean island? Crystal clear water. White sand beaches. No people. No nearby restaurants or entertainment.
Are we crazy to voluntarily shipwreck ourselves in such a predicament? I don’t think so. But we aren’t complete gluttons for punishment. We made sure to book a place with air conditioning and wifi (it is the 21st century after all).
It’s early August and we’ve been at home for about two weeks after spending a month vacationing in the Bahamas during June and July. Summer is flying by incredibly fast because we have been so busy!
Our oldest two kids just wrapped up two weeks in summer camp. The whole family has enjoyed lunch, dinner, or play dates with several groups of friends that we haven’t seen all summer. Back to school shopping is mostly done. And school starts in three short weeks!
In the meantime, our lazy investment portfolio continues to be busy as well (in a very hands-off way). Our net worth shot up by $46,000 during the month of July to $2,084,000. Spending was particularly low at $1,389 while income remained strong at $4,361 for the month.
“JM”, a new commenter on the blog, left a great comment asking about tracking spending and how that helps you get to Financial Independence.
“Do you track all your monthly spending, no matter how minute? Did this help get you to Financial Independence? And how?” -JM
The quick answer is yes, I did track all spending down to the dollar while working towards FI. And looking back, tracking everything I spent was pivotal to accelerating my journey to FI.
We’re living it up in the Bahamas on vacation right now! I’m taking a break from the waves, sun, and sand to provide the regular monthly financial/life update. At this point we are half way through our one month stay. Although there isn’t much to do here beyond swim in the ocean, play in the pool, and walk along the canals and marshland, we’re having a good time. We brought lots of books and the wifi and air conditioning are top notch!
Did our finances have a nice month too? In June, we did well from a cash flow perspective with income from investments and the blog exceeding our expenditures. Income was $8,867 while expenses were only $3,554. The stock market wasn’t very kind to us in June, so our net worth dropped by $16,000 to $2,038,000. There’s still enough money in the investment accounts to keep me smiling in the Bahamas!
The final stop on our nine week, fourteen city summer vacation across Europe brought us to Amsterdam, Netherlands for a quick three day stay before flying back to North Carolina (and home!).
While in Amsterdam we explored canals and rivers, centuries old streets and buildings, and some more modern spaces like the iconic OBA Amsterdam Public Library.
Read on to find out how we wrapped up nine weeks in Europe!