December 2014 Financial Update

We closed out the year with a financially busy month.  With income exceeding $17,000 in December, we way more than covered our abnormally large expenses of about $10,000.  We finished the year on a strong financial note and wrapped up a major home renovation project during the month.  And booked another Caribbean cruise.



As expected, our investments paid out massive dividends in December.  Many of the mutual funds and ETF’s we own pay dividends once per year in December, so we always receive a lot of investment income in December.  At $13,807 for December, investment income made up the majority of our total income for the month.  For all of 2014, we received $29,383 in dividends, which is up significantly from the $22,300 of dividend income during 2013.

Blog income, shown as “other income” in the chart, was up significantly compared to November at $1,587.  Freelance writing (“consulting” income in the chart) was $125.  I expect to make around $600-800 over the long term from blogging and freelance writing, and December was well above my expectation.  That’s partly because I received two months worth of advertising revenue from an affiliate advertiser (Personal Capital).  If you are a blogger and want to add Personal Capital to your affiliate advertising, they are offering a direct relationship now (click here to sign up!).  Visitor stats at Root of Good have been solid throughout the normally slow Christmas season, so I expect January blog revenue to be above average.

The $30 in “restaurant income” represents the Small Business Saturday American Express promotion.  Each year, Amex offers some cash back on the Saturday in November after Black Friday.  This year’s offer was $10 back if you spend $10 or more at a local business (up to three times).  Thanks for $30 of free food at our neighborhood Chinese restaurant, Amex!

Although not shown in the income chart, I earned $400 from Craigslist sales in December on top of the $80 earned in November.  I tracked my time to determine whether putting things on Craigslist is an efficient use of time or whether I should just toss stuff out or put it on the curb for free. Right now I have invested 14 hours into photographing, researching prices, and listing around 25 different items, plus emailing or talking on the phone with a number of buyers.  That $480 equates to an hourly earning rate of $34 (tax free)!  So far this experiment has worked out well.  We got rid of two queen mattresses, a queen and a king box spring, four tables, a fondue pot, a baby crib, a baby mattress with sheet sets, two portable baby cribs, a telescope, five “laptop” bags (the dude that bought those has a serious computer hoarding problem), and a decorative wreath.

If you’re local to Raleigh, NC and want crappy old luggage, a broken 16″ bike, or a large painting of Angkor Wat (only $40 now!), get in touch with me and let’s make a deal.




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 December expenses:


We spent over $10,000 in December, which is way more than our budgeted $2,667 monthly spending.  That’s a shockingly large number to me.  However, there are many families in higher cost of living areas of the United States that routinely spend $10,000 or more every month.  I can’t say any of them will be retiring early but some probably will as long as their incomes are huge.

The abnormally large month of spending is really due to four areas where we experienced “lumpy” expenses: home maintenance, travel, groceries, and electronics.

The largest lumpy expense was the exterior renovation project on our house.  We spent around $7,000 in December for new windows, new siding, and a major roof repair.  Add that to the $1,682 renovation expense from November and we spent about $8,700 total on this project.

The project was very expensive relative to our normal $32,000 per year budget, but fairly modest in the grand scheme of home ownership.  Since we budget an average of $1,500 per year for major home-related capital improvements, the cost of new siding and windows represents about six years’ budget for major home improvements (on top of ordinary repair and maintenance expenses).  I can’t imagine spending big bucks in the next six years for much of anything, and most likely if we do have any lumpy expenses it will be an appliance replacement ($300-600) or major HVAC work (the current HVAC unit is 11 years old).

The second lumpy expense in December was $1,134 for a five day cruise to the Bahamas for our family.  We spent a little extra and reserved two cabins for the five of us over the MLK weekend so that the kids only miss two days of school.  We booked a last minute special rate and will be driving to Jacksonville, Florida next week to catch the boat.  We’ll have another $500 in cruise-related expenses in January to cover on-board gratuities, gas for the drive down, and parking.  I don’t know whether to count the $1,134 as a 2014 or 2015 vacation expense, but I’m sticking it in the December 2014 expense report for now.

The third lumpy expense for last month was our grocery spending.  At $899 for the month, it looks like we have almost doubled our normal average grocery bill.  We actually spent $200 to refill the kids’ online lunch money account for the next 2.5 months of school.  We also spent $300 on Visa gift cards at the grocery store to qualify for a promotional $30 of free groceries.  Most of that $300 will be spent at Aldi on groceries in January and February and will make our January and February grocery spending lower than normal.  So our core grocery expenses were closer to $400-450 for December alone.

The last big lumpy expense was my totally sweet new computer that I’m using right now to compose this blog post.  I’m a big Dell fan, and decided on this Dell 660 desktop computer with a 1 TB hard drive, 8 GB RAM, and the latest 4th generation Intel Core i3 processor.  Even though the on board graphics can handle most daily tasks, I decided to upgrade to a dedicated graphics card (in case I want to play some games, or edit graphics or videos, or play games).  The dedicated graphics card also permits dual monitors which is pretty great if you spend much time on a computer.

Graphics card technology has advanced to the point that you can buy a powerful graphics card for about $100 (like the EVGA GeForce GTX 750 Superclocked that I bought) that runs off of the stock power supply in a mass market budget PC like my Dell.  I just popped the graphics card into the PCI-E slot and it works.  All together, my computer build was $418 before receiving a $25 rebate on the graphics card.  Yes, it’s now possible to build a decent gaming or graphics budget PC for under $400.  Maybe now I’ll finally get around to doing some Root of Good videos on Youtube.

We spent a bit more than normal at restaurants, however almost $100 of that spending was on gift cards and a Groupon for a neighborhood pizza restaurant.  That amount of money should keep us fully pizza-ed well into 2015.  They had a deal where you buy a $25 gift card and get a free large 1 topping carry out pizza.  I bought 3 gift cards.  Since we get pizza from this place all the time, we will basically get three free large pizzas for spending money we already spend.  I’m a sucker for promotions, as long as it doesn’t lead to additional spending that I wouldn’t otherwise have.

Other spending included some dental care ($90) and $62 for spark plugs, wires, and a distributor cap for my wonderful 2000 Honda Civic.  A friend helped me change the plugs which turned out to be a very straight forward maintenance task that I usually take care of at the auto shop.  My little 1.6 liter green machine is about to bust through 100,000 miles so I have to baby it a bit if I want it to run for the next 15 years.


Total Spending for 2014

We budgeted $32,000 per year for retirement while we spent a total of $34,352 in 2014.  Although we blew the budget by almost $2,500 for the year, we also took care of $8,700 of major home repairs during the year and managed to come in under budget in most categories.  Our totally discretionary vacation spending was slightly over the $5,300 we planned to spend and included around five weeks of travel.  If our portfolio ever takes a big hit in the markets, we can always postpone a major home renovation or cut back on vacation spending temporarily.  Overall I think we did a good job during 2014 of prudently managing our expenses without going into extreme frugality mode.

We’ll plan on spending more in 2015.  If we give ourselves an inflationary raise of roughly 1.3% (the November 2013 to November 2014 inflation rate), then we can spend $32,416 in 2015.  I’m looking at some variable spending models that suggest we can spend way more than that in good times and still spend close to $32,000 per year in bad times, so we might raise the 2015 budget even higher.  Whether we spend the full amount we budget is another story.

Looking ahead to January, property taxes ($1,550) and auto insurance ($300) are due early in the month.  That plus whatever extra we spend on the cruise later in the month means we’ll probably have a slightly above average month of spending in January.  However, February through May are relatively devoid of any big lumpy expenses, so we will probably be running under budget for most of the first half of the year.  I mentioned a few crazy things we might do this summer in an earlier post, like big, long, and possibly expensive vacations in the US or abroad.  Or maybe we’ll downshift and enjoy some quiet and relatively inexpensive times in and around Raleigh during the summer.


Net Worth: $1,437,000 (-$14,000)

December’s slight (if you want to call losing $14,000 slight) drop in net worth is mostly due to spending $10,000 during the month.  In reality, the $8,700 we spent on home renovations probably increased our house value by $5,000 to $10,000, but I haven’t reflected any increase in the net worth tally.  Valuing a house is fickle, and I like to stay conservative on the estimate.  So maybe our net worth didn’t drop much after all.


I took a look at my 11 tips to finish the year strong, and decided to contribute $10,000 to my solo 401k to offset most income earned from Root of Good and freelance writing.  I still plan to put in the maximum contributions to our IRAs ($5,500 each) before April 15, 2015.

A while ago I described how we earned $150,000 yet paid only $150 in federal income taxes.  The solo 401k and IRA contributions are continued efforts to dodge the tax man even as our earned income dwindles.  We also want to keep our 2014 AGI relatively low (around $40,000) to keep our ACA health insurance subsidies very high once we get on an Exchange plan later in 2015.

As for the stock market in 2014, I’m feeling good overall.  Our heavy international allocation meant our performance was much worse than the US equities sector.  But a lot of the differential performance in the international sector was due to foreign exchange fluctuations which can (and will) swing back and forth in the future.  Our dividend payments remained strong in 2014, and we managed to stick to our investment plan in the face of a wavering stock market during October.  That’s a good year in my book.



How did you close out 2014?  Any big changes coming up in 2015?



Root of Good Recommends:
  • Personal Capital* - It's the best FREE way to track your spending, income, and entire investment portfolio all in one place. Did I mention it's FREE?
  • Interactive Brokers $1,000 bonus* - Get a $1,000 bonus when you transfer $100,000 to Interactive Brokers zero fee brokerage account. For transfers under $100,000 get 1% bonus on whatever you transfer
  • $750+ bonus with a new business credit card from Chase* - We score $10,000 worth of free travel every year from credit card sign up bonuses. Get your free travel, too.
  • Use a shopping portal like Ebates* and save more on everything you buy online. Get a $10 bonus* when you sign up now.
  • Google Fi* - Use the link and save $20 on unlimited calls and texts for US cell service plus 200+ countries of free international coverage. Only $20 per month plus $10 per GB data.
* Affiliate links. If you click on a link and do business with these companies, we may earn a small commission.


  1. Thanks so much for sharing. Your posts are a real encouragement to me. You live the life I’ve always wanted to but don’t see happening. Still, it’s incredibly helpful to read about it and rejoice in your blessings. Please share even more in the future!

  2. ROG,

    I would have to say that spending $34k for a family of five is simply spectacular. I am ashamed to admit that I spent that much on just me and I have a paid off house. I will definitely have to rethink some of my “needs” in the coming years.

    Best wishes for 2015!


    1. Thanks MDP! Yeah, I guess it’s pretty good. I think we do a good job at maximizing what we get for each dollar spent. So we aren’t really being extremely frugal as much as very picky consumers. I think the extreme frugality would burn us all out and end up costing us even more in the end.

      As for your spending, now is as good a time as ever to closely examine where the money is going and how you can tweak a few areas of spending. Simply cutting $100 from 2-3 categories of spending can net you thousands in savings per year.

  3. I would say that investment income was perfectly timed to cover the house repair costs. It is scary to think a month where you were at 3x your normal expenses would be an average month for a family in Chicago that send their kids to private school!

    Have fun on that cruise!

    1. Right. From what I gather, spending $10k/month is considered “just getting by” in higher COL areas. Which is amazing to me. It’s like we are living in a different country.

  4. Great job in 2014, ROG! Pretty impressive spending, or lack thereof, for a family of your size.

    You asked how 2014 worked out for some of us. Pretty well, actually. It was my first (almost) full year of not working for a company, which was a change. Financially we ended the year with 10+% gains on a diversified portfolio. This was helped by my options trading, which netted me after all costs about another $60K for playing around in that area. Not for the faint of heart but my goal will be to hit around $100K/year using only a portion of our investments, allowing the rest to ride in mutual funds and ETFs, primarily from Vanguard.

    2015 will likely see an uptick in vacation spending since we have a number of weeks we will be gone, spread throughout the year. Might be looking to replace our Harleys so that expense will cut into our assets. Other than that I do not see a large difference in our spending habits, since we have no mortgage and most of the large expenses such as a kitchen remodel were concluded this year.

    Best of luck in 2015, my friend, and I look forward to reading more on how well you and the whole family are doing.

    1. Sounds like you had a very successful 2014, too! And you have a lot of fun spending planned for 2015.

      I’d love to hear more about your options strategies if you want to post it here or message me through the “contact” link. I’m curious to learn more about options strategies, since I’ve heard a few people talk about relatively low risk ways to get some extra “juice” without putting their whole portfolio at risk of loss. I’ve looked at a few options plays, but they have never been profitable enough to make it worth the risk to me.

      1. I trade for my profession and I can absolutely say that there is no such thing as a free lunch or “extra juice”. In all likelihood the extra juice is from selling call options on your portfolio. Seems like a good idea until there is a monster year when the portfolio screems through the strike price. Just imagine if you had sold really “rich” call options in 2009? I am not saying there isn’t money to be made. Usually, though, if it is a strategy that is being taken advantage if by a retail investor, there is no risk adjusted return to be had.

        1. Andrew – you are correct. I sell both puts and covered calls for additional cash. Yes, I give up upside on the covered calls if I sell them too low, but I still make the cash and whatever premium I sold the stock for. I’ll take a nice short term annualized profit, and look to get back into the same stock if its fundamentals stay attractive.

          1. I’m thinking about using the covered call strategy for raising cash. So if I want to get $10,000 in cash to fund our expenses a year or two out (ie top off the cash reserves), I can write 1 covered call at the money contract on VTI (for example) and make about $450 at today’s prices for a June 2015 contract. Or write a more out of the money contract for a smaller premium (but higher price if executed). Maybe it gets executed or maybe it expires. I keep the premium regardless, and get today’s price (or more if writing an OTM call!).

            The downside here seems to be my call expires, the underlying VTI drops by more than the option premium, and I don’t have my $10k to top off the cash reserve. And I’ve burnt through 5 more months of living expenses waiting to see if I get called. Do I sell at the now-lower price? Write another contract for another premium and accept a lower strike price?

        2. AJ, I responded to ChuckY’s comment if you wanted to provide any input on my response. Thanks! I’m a total newbie to options trading (never actually executed a trade, but put together many hypothetical trades/strategies just to see what it would look like).

          1. All I would say is that writing options is complicated and prone to massive risk. To make it work you would likely have to invest significant time into statistical analysis and be willing to psychologically keep going even when you get burned. Most retail option writers will (1) be over levered ie write naked options or (2) they will get run over and then stop writing options at the exact time it is best to do so, effectively guaranteeing the strategy to have a much worse payoff.

            Focus on living your life/early retirement and let your portfolio manage itself. The vanguard couch potato method will probably beat 99% of retail option sellers in the long run. But hey, if you like statistical analysis and are yearning for a new pursuit ,it would probably be fine to investigate it on 10%of your portfolio.

            1. The vanguard couch potato method is how I got to early retirement and how I plan to stay in early retirement. I might try to make some educated bets that are tiny relative to the portfolio and of moderate risk (like covered calls on a small percent of portfolio).

          2. Sounds like the three of us have been in agreement all along. #1, we don’t risk (or plan to risk in ROG’s case) large portions of our savings. #2, you have to have the temperment for it (I have been doing it for three years and literally hundreds of options – TD Ameritrade loves me). And #3, you have to do your research.

            I would also add that you have to enjoy it. Otherwise it can be quite stressful, and one should stay away from it entirely under those circumstances.

  5. 2104 was a big year — quitting my engineering job, starting my own business, and taking a month-long backpacking trip. 2015 will be big as well since we’re planning to move.

    I think you got a lot of value for your money this year! I look forward to hearing more.

  6. I think your abnormally large spending makes sense once you explained it. At first I was a little worried though when all I had done was read the first sentence. 🙂

  7. Thanks for sharing this each month. Very impressive blogging income! I, too, had a subpar 2014 due to one-fourth of my 401(k) allocated to emerging markets. When the dollar cools off, as you said, this will swing back.

    1. Yep. Stick with your asset allocation. And rebalance. We moved $40k from US investments to international due to the relative outperformance of US equities. It’s forcing us to buy low. 🙂

    1. I got off the hamster wheel in 2014 after 35+ years grinding away for large companies. You can most definitely do it if you live within your means. ROG is just a great manifestation of how that can be done even earlier if you put your mind to it.

      Do I regret leaving? Not one bit. Should have done it earlier.

  8. Wow great year. I thought 13k a year for dividends were good for me but u blow that out of the water. Looking forward to your increases for 2015

    Good day and grind on!

    1. I don’t even have a dividend-tilted portfolio, that’s just what I get from owning a broad variety of mutual funds. Always a nice feeling to see our expenses and our dividends converge close to one number. 🙂

  9. What a nice way to wrap up the year!

    We ended our year pretty much on target (okay, 1% over budget), which I’m considering a win. And we’ve already gotten underway with our big 2015 project, which is a major renovation of our kitchen. That’s going to cost a fair amount, but by doing pretty much all of the work ourselves we’re going to have a lot of sweat equity in the project.

  10. Justin,

    I set my wife up with a solo 401k last year–she’s been freelancing for about five years now. I will be retiring this year just before I turn 37. If I am doing some freelance work under her sole proprietorship, do you know if I can contribute under the solo 401k as well? I looked a bit, but the IRS guidance seemed a bit vague on this one?


    1. I’m relatively new to the solo 401k. In my research, it looks like the solo 401k is only good for one person, and only applies when there is only one employee working for the business (the sole proprietor in this case, which is your wife). Technically, if you are freelancing as a 1099 contractor under her sole proprietor, then you aren’t an employee. Be careful you aren’t actually an “employee” though. You can’t contribute to her solo 401k on your own freelance income. You would have to set up your own solo 401k and contribute to it based on your own freelance income. You are, by default, a sole proprietor. As far as I know, as soon as you have an employee, you can’t contribute to a solo 401k any more (for you or for the employee). Hope that helps!

      CYA: This isn’t tax advice, and consult your own tax adviser as always. 🙂

  11. Good job earning so much in dividend income for the year. Also the replaced windows and siding will that help with utility costs in 2015? If yes than it was an icing on the cake investment in your home. It will always help with resale value if you choose that route in the next 5 years. 34000 in spending for 5 people in the year is 6800 per person, which is really good. Good luck in 2015.

    1. I’m skeptical that the new windows will save much money. Certainly not enough to offset their pretty tiny cost ($2300 for windows+install). I did get my first utility bill covering the time after the windows were installed (well, for 2/3 the billing period anyway). Natural gas consumption dropped 2% in spite of average temps 1 degree colder. So we saved a couple of bucks (literally) but it could be totally random (maybe we had the head set a little lower or some other factor).

      It should definitely help with any resale value, even a decade or two into the future. The old siding was starting to rot and flake off in a few spots. That would make the house really hard to sell I think. The new windows look so much nicer too. Since first impressions and superficial stuff like appearance matter a lot for getting top dollar in a house sale, I think we could probably recapture a big chunk of what we paid in an increase in value.

      1. if you don’t already have a NEST, consider buying one. I’m easily saving $20/month on nat. gas over last year. and slightly more on electricity during the summers.

        1. We have a regular programmable thermostat with weekday and weekend settings. So if I’m not here during the day, it doesn’t keep it that warm during the day. And it cools off at night automatically. I have to bump it up manually if I want it warm during the day. I’ll often let it stay cool until late in the morning when I feel cold then set it to the regular daytime temp. I think I have optimized the usage pretty well, but curious if I could save more with a Nest. I might have to investigate it a bit more.

          I would hesitate to use something “smart” during summer cooling season. The A/C runs almost all day on the hottest days of summer. We also participate in the load control program where the utility pays us $25/yr to randomly shut off our A/C for 15 minutes a few times a day for a few days per year. Which would probably trick even the smartest of thermostats.

        2. Oh yeah, the gas consumption for heating is only around $75 to $125 for a couple months, and close to zero the rest of the year. So a $20 reduction for us would be huge percentage wise. And Mrs. RoG would swear it was the smart thermostat making it constantly cold in the house. 🙂

  12. The biggest advantage of the NEST over a regular programmable is motion detected auto-away. the thermostat learns your patterns over a few weeks and adjusts its schedule to the inputs you make.

    For example, I work in an office, but my wife works in our home office; if she leaves for a few hours and the thermostat doesn’t detect that she’s in the house, it automatically goes to 50 degrees. when it senses you are home again, it comes back on to your programmed settings.

    1. The motion detecting part sounds neat. I’m usually around the house most of the time, and randomly out of the house at different (unpredictable) times during the week. But if it can figure out when we aren’t there, it might improve the energy efficiency marginally. Although we’re pretty anal about turning the heat down when we’re away all day. I know from Newton’s law of cooling that it’s the difference in inside vs outside temperatures that determines the rate of heat transfer. So letting the temp drop 10 degrees when we’re away (in the winter) means we lose heat at a slower rate. With a gas furnace, it doesn’t cost any more to heat for an hour straight to pull it back up 10 degrees (heat pump users beware – you’ll waste tons of energy if you let it drop 10 degrees and try for rapid heat gain!).

      After reading some on the Nest forums, there seem to be some people that experienced no reduction in energy bills or an increase. That makes me hesitate to spend $200 with the chance that it might make things worse!

      Dave, did you switch from a regular programmable to the nest or from manual to nest? I imagine the big cost savings comes from those manual to nest converts.

      1. good points–we found that even if we were outside in the yard for 2 hours or went to the store for a few hours, the automatic default to “away” after 10 minutes of not detecting motion made an significant difference in overall energy usage in both electric and gas. I compared year over year bills in both categories and the difference was $350 the first year….about $200 on the electric and $150 on the gas.

        the device was $165 on sale…1st generation model since we only have a two level house and easy self install.

        1. I’ll put the Nest on my “to research later” list. Looks potentially promising to shave 5-10% off our already fairly low utility bills, at the risk of spending $165 or more (if it increases our utility consumption). Our system also has a hard time keeping up in the summer (no shade trees; system operates as designed, just needs to run essentially all day on hot, sunny days). I guess Nest would figure that out (I saw it downloads ambient weather data too!), and not cut off the A/C at 10 in the morning when we head out of the house on those hot, sunny days only to have us come home to an 80 degree house at 1 pm and be roasting until sunset.

          I’d also like to see something like Nest (or the app for Nest) take a look at the weather for the next few days and tell you it’s going to stop using the heat/AC and to open the windows instead at X:XX time in the morning or evening or whatever for optimal natural heating or cooling. I’m pretty good at guessing, but I have to pay attention to the weather so sometimes I realize I just paid to heat the house up to 68 when I could have waited for “free” 68+ degree natural heating from the outside on those mild days in fall, winter and spring.

  13. Great job in 2014. Yeah, those lumpy expenses are a part of homeownership.
    The dividend looks great. Is that from pre tax or taxable account? I only showed my taxable account, but I’m thinking I should include the retirement accounts too.
    Nice job with the i401k too.

    1. Hopefully those lumpy homeownership expenses are lumpy and don’t recur year after year! 😉

      The dividends are from the whole portfolio, over half of which is in retirement accounts. So it’s not all cash in my pocket exactly, but could easily go toward funding a 72t withdrawal or roth conversion amount of a few percent a year.

      I’m excited about the i401k. It’s pretty bizarre to be “saving for retirement” in retirement, but it accomplishes my tax goal of getting 2014 AGI to a low level. I first read about it at your site, so thanks again for sharing about your experiences!

  14. Nice work Justin! I noticed you like to take cruises for vacations. I was surprised to read this since the cost of cruises can really add up. Every time I look at them I end up not booking because I am nervous about all the miscellaneous fees. Is there something I am missing? How do you control your costs on the cruise?

    1. We save big on airfare by finding deals from nearby ports (nearby = within 5 to 11 hours driving).

      The cruise cost is basically cruise fare (the amazing $249 for a week long cruise) + taxes and fees (maybe $100 for a week) + gratuities ($11-12/day). Then add in parking near the port (if you drive – $8-10/day) or a shuttle to the port from the airport (if flying – $20+/person).

      Once on board, you can spend almost nothing or spend a ton. Drinks add up. The casino can bleed you dry. There are ways to spend money all over. We skip almost all of that and rarely spend anything. We don’t drink much, and you can bring a bottle of wine on board (one for each of you). That’s almost a drink a day.

      Excursions once you’re in port can be very expensive. Like over $100/person per day. We have skipped the excursions at every port except one, and still had a great time in almost all of the ports. There is a lot to explore on foot, and sometimes cool things to see right at the port (at least on your first visit). Or you can hop in a local taxi or bus and explore on your own. Download the google maps offline data ahead of time and you can gps your way around anywhere. We did pay $7 per person for a shuttle to the beach in Port Canaveral FL (one of the “port visits” from our Charleston cruise a few years ago). Otherwise zero excursion spending (besides a few bucks for bus fare or local shuttle/taxi). And there’s nothing wrong with staying on the ship. The ships are like floating resorts. Pool, lounge chairs, food, entertainment, music, wind, ocean views all around.

      From surfing on a cruise forum, I realize some people treat cruises like a once in a lifetime vacation and spend tons and live it up. We opt for the cheapest cabins and enjoy the same amenities as all the guests on board. And we skip all the extra ways to spend money. There’s too much to do and see without paying extra. Premium restaurants are a good example. You can pay $35 per person for an super duper really good premium restaurant on board, or eat in the really good dining room. And there are at least a dozen other free restaurants on the ships. Who has time to pay for a premium restaurant?

      I also have an article (or series of articles) in the works on cruises. Hopefully I can get them finished up soon!

      1. Thanks for responding about the cruises. I would really enjoy reading an article on this subject: How to have a blast on a cruise without breaking the bank, the best time to cruise, and how to schedule your travel to and from the ports, etc.

        Maybe you could find a way to advertise this throughout the article for some extra blog income like cruise booking sites, hotel sites, and rental cars.

        1. I’m working on it! 😉

          I have those topics (and much more) in the draft and outline for the article. I’ll probably throw some links to the travel sites I use frequently. I planned to recommend travelocity, but they just reconfigured their formerly awesome cruise search engine and now it’s nothing special (and harder to use). Still an easy place to book a cruise and get some free upgrades or on board spending credit.

  15. Thanks for sharing! 2014 was good year for our household but we are not in your league when it comes to spending (spending less that is!). Our primary thought is to make our savings goal. Once we’re in a zone with that we definitely give in to costlier fun and games, and that was super true last year because my husband made much more than expected One thing is for sure every year though: our December expenses are always way up because of . . . Christmas (we have kids too). We give our charities more, we eat and drink better, we spend on presents, we buy a tree, we do more stuff with the kids because they’re off school, etc etc. Where did Christmas hit your expenses?

    1. We didn’t really notice the Christmas spending because it’s almost non-existent! I had to look at the detailed spending reports in Personal Capital. $173 including some birthday gifts from earlier in the year. Plus probably another $100 of random things we picked up at the grocery store or walmart that got lumped into “grocery” spending. Our families tend to go very very small on gifts. Like in the $10-20 range. Which is awesome. Typical gifts were bottles of champagne ($6) or a custom photo calendar ($13). Our kids got some small things, the largest being a $27 bike for the 2 year old. And I guess you could call our $1,600 cruise in a week a Christmas gift for the family! 😉

      Our dining out was pretty ordinary. There was some alcohol in the grocery budget, probably nothing out of the ordinary. We have 2 artificial trees, so no extra spending there. And Mrs. RoG took off work for probably 10 business days in December, so the gas and toll savings paid for most of our Christmas gifts.

  16. Looks like a successful end to a successful year.

    We took advantage of the $30 Amex small business Saturday on quite a few cards. Are you booking it as taxable income? Or is that just for your tracking purposes?

    Did you use any specific sites to find your cruise deal? I haven’t been on one, but have looked at prices before, and $1100 for two cabins seems like a pretty good deal.

    1. Thanks, and welcome Frugal Buckeye!

      I’m not booking the $30 as taxable income, it’s just how the $10 x3 credits get pulled into personal capital. I wish there was a way to set it to treat it as a -$30 “expense” on the restaurant side, because it offsets $30 in restaurant spending that we wouldn’t otherwise do all in one day (as much as we love many many pounds of Chinese take out!).

      For cruise deals, the best I have found so far is for searching last minute cruises, because you can sort by “price per night”. However once you find the lowest price cruise there, you will have to go somewhere else to find out the total price including taxes and fees. The easiest might be Travelocity – once you find that cheap cruise from vacationstogo, you can get the total price including tax from travelocity. We have booked a few cruises through travelocity and they are easy to work with, plus they often offer free upgrades or free on board credit if you book through them.

      CruiseDirect looks promising too, and has a decent search interface if you want it all in one spot. Just not quite as easy to sort by price per night like vacationstogo.

      And if anyone else has good tips on a great search engine for low cruise fares, please share!

      $1100 for 2 cabins is a great deal, but keep in mind that’s for 5 nights (for 5 people total). I think $650-750 for a 7 night cruise for 2 people is pretty good, if you need a benchmark to aim for.

      1. OK, that makes sense, it’s interesting that personal capital does that with credits to your credit cards. I love personal capital for tracking my investments, right now they are spread between the two work 401k’s and different Roth and regular IRAs that my wife and I have. I use mint to track the spending on our credit cards. Right now it works to track them in two different places and then mash them together in my excel Net Worth tracker at the end of each month.

        I haven’t used this site, but is pretty similar to cruise direct, but I like it a little better for the layout’s clean look and simplicity. It also seems to breakdown prices per day.

        1. cruisesheet looks like it only lists a limited range of cruises. I didn’t see any less than $49/nt, while where are probably 30-40 at vacationstogo below that price.

  17. Wow, I still marvel at the spending rate. 34k with an extra 5+k in home repair is pretty impressive. Not including your wife and just utilizing your side income, you are probably at around a net outgo of 20k. Unless the world is enslaved by aliens, you are set. Using a very conservative SWR of 3%, you could suffer a fall in net worth of 60% and still have an unchanged lifestyle. Very cool to see someone who has reached escape velocity.

    1. If the blog income keeps up, I might net $8-10k after self employment tax, leaving somewhere around $20-24k in most years to be pulled from our portfolio. And I have tiny side hustles that pull in a few hundred here and there (credit card sign ups, selling stuff on craigslist/ebay, beer rebates, etc).

      You’re right, we can suffer a pretty ugly crash and still be okay financially. Another key point is potential to earn more from this blog and freelancing. I sometimes turn down work if I have other more interesting stuff going on. I could always scramble and actively seek out more ways to make money.

  18. Nice Job in 2014. I don’t want to even look at our total spending for 2014 because it might make me a bit sick. Part of it is because we bought a house and spent a bunch of money on the down payment, furniture, and other household items. Plus, we have to spend $3000 this month on insulation for our home. It will be nice when this house is paid off (hopefully a couple of years) and my spending can go down considerably. Until then we will just keep plugging away!

    1. Wow, paying off a house in just a few years? Sounds aggressive! Houses tend to consume large chunks of money occasionally. Hopefully it will provide long term comfort for you.

  19. Great year Justin, congrats. We had a strong year as well and kept spending in line until our big renovation that started in November and is just finishing this week. Two great new bathrooms and a lot of beautiful 8″ wide walnut hardwood flooring set us back $50k. Spent another $10k on new furniture and a new home theatre set up with a 70″ tv. Sounds expensive but it was a lot less expensive then selling our current house and upgrading (my wife was eyeing houses in the $1.3M+ range, no thanks!). We love our house but the bathrooms have been bugging us for 8 years so it wasn’t an overnight decision!

    The good news is our net worth grew by $330,000 this year (much better than last years increase of $160,500). We managed to contribute just over $100k to our investment portfolio and still paid for the reno with cash. Having the mortgage paid off a few years ago has really helped us ramp up savings and a couple more years of good increases and we will be retiring before 50 with target $4M.

    1. “Sounds expensive but it was a lot less expensive then selling our current house and upgrading (my wife was eyeing houses in the $1.3M+ range, no thanks!).”

      This is a smart way to analyze the situation. Sure, you spent a lot of money, but the next best option to get the house you wanted would have been a lot more expensive. Just the 6% realtor’s commission on a $1 million+ house would set you back more than $50k. Then there are the movers and other move-related expenses.

  20. Sounds like a great year and fantastic dividend month. Home ownership certainly has its surprises. In one year we had to fix the pool for $1k, replace the roof for $6-7k, and buy a new fridge. They were definitely not in our budget.

    1. I consider those kind of expenses in my budget since I know I’ll be replacing appliances and the roof periodically (without knowing the exact timing). Some years that means many thousands of dollars, others it might just be a couple hundred bucks for a random appliance or some painting.

  21. Does the investment income you list only from your taxable accounts, or total from all accounts including 401k, traditional ira, hsa, etc? Also, in almost every month, your income outpaces your expenses. What do you do with the extra? Do you put it back in your taxable accounts, or do you keep it as cash?

    1. Reported investment income includes all accounts (taxable and tax deferred). Sometimes I’ll mention how much was in our taxable accounts, sometimes not. 🙂 It’s usually about 1/4 of the total in taxable accounts.

      With extra cash each month, we let it build up in our savings account. Then I’ll max out IRAs and my solo 401k if it makes sense for tax purposes. I put $32,000 into IRAs and solo 401k in 2015, for example, simply because we didn’t need the cash and I didn’t want to pay tax on the income.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.