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.
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!
“I never want to quit working because I’ll be socially isolated and I won’t be able to make new friends.” Is this a legitimate concern or one of the worst objections to early retirement?
There is reason in worrying about loneliness in retirement but it’s not a good reason to work forever, especially if you don’t like your job! Getting out of a stressful work situation will make you a nicer, better person and therefore more likable and friendly.
If work is your only source of friends and social interaction, then perhaps it’s time to broaden your social network and look for friendship in other places.
The thirteenth (and next to last) stop on our nine week, fourteen city summer vacation across Europe brought us to Koblenz, Germany. The city of Koblenz sits at the confluence of the Mosel and Rhine River in the western part of Germany.
After spending most of the previous eight weeks of vacation in urban settings, we decided to give rural living a shot for a week. We rented a spacious three bedroom apartment in a country house in the village of Mariaroth about 15 minutes from the center of Koblenz.
While staying near Koblenz, we visited the Eltz Castle, several villages in the Mosel and Rhine river valleys, and toured downtown Koblenz during what turned out to be a rather rainy week for us.
As we near the end of the review of our nine week, fourteen city summer vacation across Europe, our twelfth stop brought us to Berlin, Germany for a week of history, culture, food, and friends.
Berlin was everything I expected and then some. Great summertime weather, nice people, minimal crowds, easy transit, good food, all with low prices (for a major European capital city). I’d certainly rate Berlin a hidden gem on this basis. My naive hypothesis is that Berlin is still a city in transition following World War II devastation and the post-war sundering of Berlin into East and West halves by the former USSR and the western Allies.
The Berlin Wall fell in 1989 and Germany reunited as one country shortly thereafter in 1990. In today’s Berlin there are ample reminders of the turbulent past century in the form of museums, memorials, and preserved segments of the Berlin Wall. Though it’s hard to imagine anything bad actually happened when you’re sitting in a placid city park or strolling down the quiet riverfront. Then you catch a glimpse of pockmarked walls and columns on old buildings and that makes you wonder if those were caused by bullets or an exploding shell that barely missed its mark.