December 2018 Financial Update and 2018 Spending Summary

Out with the old and in with the new! 2018 proved to be another fun-filled and successful year of early retirement for us at Root of Good. I’m looking forward to 2019 being more of the same. Our oldest child will enter high school (!!) in the fall which means college is just around the corner.

We have several trips lined up for 2019 that will bring us to Mexico, Cuba, the Caribbean, and Southeast Asia. We’ll be spending more than two months overseas exploring new places, eating new foods, and wondering how we ever had time for full time jobs. 

This post is a combo of a monthly summary of December and a year end wrap up for us. Looking back on December’s finances, we saw a very significant drop in our net worth.  Due to a major stock market correction, our net worth dropped $117,000 during December to end the year at $1,871,000. Compared to 2017, we were $166,000 poorer at the end of 2018, which represents an 8.1% drop in net worth versus 2017’s $2,037,000 year end balance. After a brief bout of volatility in January and February, 2018’s market was mostly uneventful until October when stocks went into decline. Tough times in the stock market, but that is to be expected occasionally. 

Spending for the month of December totaled $3,878 with a year end total of $29,058 for all of 2018. Income for the month of December was very high at $21,030 due to year end dividend payments and several double payments from blog advertisers. Income for the year totaled $72,605 and was roughly half blog income, half investment income. 

Now let’s take a more in depth look at the numbers. 



Investment income totaled $13,240 in December. Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  December is usually the largest month of the year by far thanks to year-end dividends, and this year was no different. More on our dividend income.

Blog income, shown as “other income” in the chart, totaled $7,500 for the month of December. I received two monthly payments from a few vendors so I anticipate January blog income will be much lower. 

My early retirement lifestyle consulting income (“consulting”) dropped a bit to $240 in December. That came from a single two hour session with one client.  I just raised my rates for 2019 by 4% primarily to keep up with inflation.  

Deposit income of $49 came from the and 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 have quite a bit of cash back accumulated from all the Black Friday/Cyber Monday deals we bought in November and December and they are starting to flow into our checking account now. 



If you’re interested in tracking your income and expenses like I do, then check out Personal Capital (it’s free!). All of our savings and spending accounts (including checking, money market, and five credit cards) are all linked and updated in real time through Personal Capital. We have accounts all over the place, and Personal Capital makes it really easy to check on everything at one time.

Personal Capital is also a solid tool for investment management. Keeping track of our entire investment portfolio takes two clicks. If you haven’t signed up for the free Personal Capital service, check it out today (review here).

Tracking spending was one of the critical steps I took that allowed me to retire at 33. And it’s now easier than ever with Personal Capital.



Now let’s take a look at December expenses:


In total, we spent $3,878 during December which is roughly $500 more than our target spending of $3,333 per month (or $40,000 per year).  The top expense for December was “home maintenance” which was our annual property tax bill.


Detailed breakdown of spending:


Home Maintenance – $1,663:

Our annual property tax bill. Our house is a bit over 1,800 square feet in Raleigh with an assessed value around $147,000. Today’s actual market value is probably closer to $215,000 given the recent rise in neighborhood home values. Fortunately for us, the county only reassessed property values every eight years and the next valuation comes in 2024! 


Travel – $1,033:

During December, our travel spending totaled $1,033. We spent:

  • $600 for our just-completed December cruise and related expenses
  • $233 for discounted Airbnb gift cards at Raise
  • $200 for our trip to Mexico

Our cruise was already paid in full but we had to pay for the on-board mandatory gratuities totaling roughly $350. We drove to Miami so we spent around $200 on gas for the minivan plus parking in Miami. We took it nice and slow on the drive down and back with overnight stays in Florida each way. 

On the drive down, I paid $67 for a six person suite at the Comfort Suites in Fort Pierce, Florida. On the return trip, we booked two rooms using points at the Quality Inn Jacksonville Airport location. We’re making good use of Mrs. Root of Good’s recently acquired Choice Privileges hotel credit card that came with a 64,000 point sign up bonus.

We’ve been cranking up the travel planning for our upcoming trip to Southeast Asia in summer of 2019. We spent $233 at to buy $250 worth of Airbnb gift cards. 

We’ll be spending eight weeks in Southeast Asia and most of the time we’ll be renting Airbnbs by the week. The Airbnb Gift Card credit never expires so even if I buy a little bit too much it’ll still be good for our future stays in 2020 or later.

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

The final bit of travel spending was for our upcoming anniversary trip to Mexico. We booked 11 nights in Mexico City using $750 of our Airbnb referral credits. The flights were booked on Southwest and Jetblue for a total of 12,700 points per round trip ticket plus about $100 in taxes for each of us.  We’re leaving the kids at home with Grandma on this particular trip since they don’t have a break from school. 

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.


The view from the stern of the MSC Seaside cruise ship. 9 decks down is the pool!


We met up with some FIRE friends. Two years ago they tipped us off to this smoking hot deal for a Christmas cruise.


Copious quantities of free liquor at the Cruise Critic Meet n Mingle event on board. We even met some Russian hackers who we rendezvoused with at a second event involving free liquor.


On the first day of our drive home from Miami, we stopped in nearby Boynton Beach to visit the Green Cay Wetlands Center. We spotted a couple of alligators and tons of birds. A Root of Good fan also spotted me!


We stopped in Jacksonville, Florida for the night then spent the next day touring Savannah, Georgia. What a hidden gem! I can’t believe I’ve never detoured off of I-95 before to visit. I had another Root of Good reader spot me near this part of the riverfront (even though I was wearing my sunglasses).


Spanish moss dangling over the headstones in this serendipitously discovered cemetery in Savannah. Fog and misty rain only helped with the ambiance. We found an entire section devoted to Civil War soldiers that fought for the Confederate States of America and died during the war.


Groceries – $524:

Another very average month of grocery spending. Here’s an older article that summarizes our grocery shopping strategy.  Hint: we don’t clip coupons. 

We tend to shop at Aldi, Lidl, and Superwalmart for most items. Occasionally I’ll visit our neighborhood Food Lion to pick up some sale items or grab a few things out of convenience. One place we never shop for groceries is Costco because it’s one of the more expensive stores in our area


We tried fellow early retiree Mr. Tako’s homemade butter chicken curry recipe.


The homemade butter chicken curry was pretty good but everyone in the family said they preferred the prepackaged curry from Kitchens of India. And it’s actually made in India so you know it’s legit. As the chef, I also appreciate the simplicity and speed of dumping cubed chicken, curry paste, water, and butter into a pot and letting it simmer. End result: perfection. 


New Year’s Eve festivities with family included our monthly allotment of pho!



Electronics – $381:

Mrs. Root of Good needed a new laptop with a better display for photo editing for this blog. I searched for a good deal during Black Friday and didn’t find much that I liked at a good price point.

Eventually I discovered that I missed a sweet deal on a $299 special during Black Friday at Costco (see, Costco isn’t entirely bad!). The Black Friday special checked all the boxes we needed such as good display, SSD drive, decent processor, lightweight, and compact.

I found the same model listed for sale at Ebay. Probably by someone who bought a bunch of units from Costco then relisted them on Ebay. I paid $381 including shipping from Ebay. Here is the same computer at Amazon and it’s slightly cheaper right now!

The total price at Costco would have been slightly higher than $381 after adding tax, shipping, and the cost of a Costco membership. I might have actually purchased (and then sought a refund) for a Costco membership if I would have discovered this deal on Black Friday just to get the extra warranty coverage that Costco provides. However the simplicity of not having to deal with another vendor is worth something.


Restaurants – $85:

We spent more than usual on restaurants during December. $50 of the total went toward a $50 Taco Bell gift card deal that included an extra $25 Taco Bell promo gift card with a short expiration date. We used up the $25 promo value in December and still have most of the $50 gift card.

We also ordered take out pizza three times plus snagged a few app deals like the $0.01 Whopper with the BK app and $10 off Five Guys burgers with the Chase Pay app (which led to a burger plus medium fries for $0.20).  

We also dined in the formal dining room on the cruise ship for most dinners. Good eats!  The cost is included in the cruise fare which worked out to be about $250 per person for our seven day cruise.


Cruise food! Lamb chops


We accidentally ordered an extra double serving of surf and turf on the cruise (at no extra charge of course). Plus our daughters didn’t want the lobster from their surf and turf plates. End result: us adults each ate 3 lobster tails and most of 2 filet mignons. Fortunately the filets were smallish.


A taste of the Caribbean. Conch fritters. These were better than any of the fritters we had in the Bahamas.



Gifts – $75:

Christmas gifts for family and friends. Mrs. Root of Good went crazy and bought a bunch of Fingerlings toys for the kids plus some extra ones for birthday gifts throughout the year. 


We celebrated Christmas on board the MSC Seaside in St. Thomas, US Virgin Islands with a few small presents brought from home. I love the scenic backdrop of $100 million megayachts docked next to us.


Assembling Mrs. Root of Good’s gift to herself. Weight bench with 100 pounds of weights. So far it’s getting used several times per week by both of us!


Utilities – $74:

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 $400 worth of positive balances on our electric and water accounts.

December’s natural gas bill which covers heat and hot water totaled $74. 


Healthcare/Medical – $31:

Our new 2019 healthcare premiums are $31 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income. 


Cable/Satellite – $15:

$15 for one month’s internet bill. We qualify for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.


Gas – $0:

I categorize gas purchased while on vacation as a “travel” expense, so we didn’t have any separate charges for gas for the van during December. When we stay in town in Raleigh, we usually fill up the van every two months so January might not have any gas charges either. 


It snowed in early December! Pretty rare occurrence. And we got 6 inches.


The Christmas lights looked eerie underneath the snow.


Total Spending in 2018



We spent a total of $29,058 during 2018. That’s roughly $11,000 less than our $40,000 early retirement budget. To put our spending in perspective, the 2018 Federal Poverty Level is $29,420 for a family of five. We’re actually living below the poverty line!  

But that’s a little misleading since I think we enjoy a lifestyle similar to families that make $100,000 per year.  Skipping the expenses of holding a job plus living in a paid off home while paying very little in taxes saves us a bundle. 

Travel was our biggest expense by design. We spend two or three months on the road every year and that comes with a cost. Of course we get about $10,000 of free travel from credit card sign up bonuses and other travel hacks throughout the year. So we would actually spend $15,000 to $20,000 on travel without those sources of savings. 

Other spending categories like groceries, insurance, taxes, home, and auto are pretty consistent year to year. 

During the rest of 2019, we’ll be spending several thousand dollars on travel through the summer including $1,400 for our Spring Break cruise to Cuba with the whole family.

In February we will celebrate our fifteenth wedding anniversary with our trip to Mexico City. 

In summer of 2019 we will travel to Southeast Asia for around eight weeks. We will be planning that trip in more detail during early 2019.  I’ve already accumulated $3,500 of Airbnb credit so further spending on lodging for this trip will be relatively minor.  Flights are already booked. The remaining expenses will be incurred once we are in-country such as ground transportation, restaurants, admission fees at attractions, and guided tours (if we do any). 

Since we aren’t even hitting our $40,000 annual spending goal, I don’t plan to increase the budget for 2019 to account for inflation.

I’m sure we’ll be spending more by 2021-2022 when our oldest two kids start to drive. We’ll probably buy a new (used) car at that point and go back to a two car household. College tuition payments will be due starting in 2023. These higher spending needs will certainly remedy our persistent underspending of our budget! 


Monthly Expense Summary for 2018:


Summary of annual spending from all years of early retirement:


Adding to our hectic December schedule were three birthday parties to attend in one weekend. One of them included go cart racing!



Net Worth: $1,871,000 (-$117,000!!!)

Here’s the truth: I was very busy the last half of December doing some year end tax strategizing and planning for our Christmas cruise and February trip to Mexico.  Then we were traveling and on the cruise the last week and a half of December. We never get the internet package while on the ship so I was mostly unplugged from the big stock market volatility at the end of the month. 

Needless to say the month of December was UGLY! We lost $117,000 which dropped our net worth to $1,871,000.  That level of net worth decline represents about three years of our average spending in early retirement!  



I would be more worried except I don’t think we’ll ever run out of money in early retirement. At this lower level of net worth with about $1,700,000 remaining in our investment portfolio, we are only spending 2.3% of our assets each year IF we spend the full $40,000 we have budgeted. Which we rarely have. 

Though we are a few hundred thousand dollars below our net worth high water mark, we’re still feeling rather wealthy right now.  The last time we were this “poor” was just 16 months ago in August, 2017

Way back in 2017 I felt like the stock market was reaching a high point, so I started shifting some assets from stocks into bonds. I made the shift a little bit early but having a $180,000 stockpile of cash, CD’s, and bonds gives me a lot of peace of mind during periods of market volatility. I know exactly where the next five years of living expenses will come from, even if the Dow drops to zero. 

While we’re on the subject of market volatility, I’ll toss out a little wisdom for you. If you have a job and some disposable income you don’t need for the next few years, now is a great time to be buying in the stock market. I don’t know if we have hit a bottom in the market yet.  But from past experience I can tell you that buying all the way through a correction will leave you much wealthier once the inevitable recovery does happen. 

Looking back to the 2007-2009 Great Recession, I watched for eighteen months straight as our net worth declined every quarter. We were piling money into investments but the stock market losses swamped the value of our new contributions. However, everything shifted gear in early March, 2009. Investors went from fearful and shy to bold and bullish literally overnight. I don’t know who sprinkled the magic fairy dust that shifted the markets’ moods but something happened to get everyone back to buying. Moral of the story: don’t sit on the sidelines waiting for the bottom because you’ll probably miss it. 

In other investing news, I finally made my first options trade ever after waiting, watching, and pondering for nearly a decade. I sold one January 2021 put on Carnival stock (CCL) with a 37.5 strike price for $3.60 per share. After commission I pocketed $354. I’d gladly take 100 shares of Carnival at $37.50 (a 25% discount to the current ~$50 price per share).


Trading options feels a little bit like walking up to this wild alligator at the Savannah National Wildlife Refuge. It’ll probably turn out okay but you have to be mindful of what’s going on.


Since I cruise quite a bit I could take advantage of the Carnival Shareholder Benefit where they give $100 on board credit to passengers who own 100 shares of Carnival stock. This includes passengers sailing on Carnival’s myriad subsidiaries like Princess, Holland America, Cunard, and Costa. 

In general, options are fairly risky. If, for example, Carnival were to drop to zero, I would face a $3,396 loss if my 100 shares were assigned at a price of $0/share. Big ERN at Early Retirement Now explains how one “money manager” blew up his $150 million portfolio basically overnight by taking massive leveraged bets on options. Fortunately my $3,396 max loss would be little more than rounding error in my overall portfolio and nothing catastrophic would happen.

Other than that little options bet, I’m still hanging on to my boring 90% stock / 10% bond+cash+CDs asset allocation

In closing, I’d like to wish all of my readers a Happy New Year. Make the most of 2019!


How did you end the year? Any huge losses you want to share? Learn anything new during 2018?



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  1. We lost about $60k among the rukus although we were too submerged into the holidays to notice. A 6 size figure drop is always so eye popping (I popped my eyes at those figures even though it isn’t “suprising”) – but it’s a lot less scary than losing your job. A friend of mine lost hers over the holidays and it puts things into perspective big time! Early retirement should be more of a trending topic because jobs come and go all the same! :p

    1. That’s very true. I think losing a job way back when we had very little would have been a lot more scary than losing a million bucks today (from our high water mark of ~$2.1 million).

      In fact, I lost my job very suddenly in 2013 which I turned into early retirement. For about 30 minutes I was a little shaken up! Then I ran the numbers and reviewed my ER plan and realized I’d be totally fine! 🙂

  2. Your lifestyle doesn’t look like someone who’s living under the poverty line at all. You’re doing a really good job optimizing your money to get the best out of small amounts. Admirable!

    1. Hence my comments on “living a $100k lifestyle”! And in fact, many of the $100k earning households seem to be struggling financially because they get into debt and have a lot of ongoing monthly payments to make. In contrast, we have very flexible finances and could reduce spending easily if we needed to.

  3. Happy new year!

    Love the cruise pictures–and how cool that you were able to do it with other FIRE friends!

    Markets have been super volatile lately, but your advice ” buying all the way through a correction will leave you much wealthier once the inevitable recovery does happen.” is spot on. This is exactly what we did in 2008 while working. It feels terrifying, but definitely helped our portfolio recover faster than others. In the end, we ended up coming out unscathed.

    Glad you are still sleeping soundly and your net worth is still doing well despite the drop. Rock on!

    1. You’ll have to join us on a cruise some time! Lots of good snorkeling/scuba opportunities in the Caribbean. 🙂

      Yeah buying non-stop through a correction is like pouring gas on a fire. In a good way. It feeds the FIRE!

  4. New reader here and found you through ESI. I have been trading options for about 5 years and I can tell you with certainty that the risk you take can be defined before entering a position. You sold a naked put (ie didn’t buy a put as well to protect yourself from a large downside move) which is a fairly risky strategy, but not as risky as selling a naked call. Theoretically, a stock can climb to infinity.

    If interested in further playing with options, I would suggest looking into selling a “bull put spread” which is selling the higher priced strike put and buying a lower priced strike in the same expiration. The premium you pocket is the difference between these prices and the risk well defined. You might like it! Option trading can be fun.

    1. I considered that strategy but I would actually love to be assigned on the underlying. I’ve been very close to buying the underlying at much higher prices, so I’d have the risk of it going to zero or very low regardless. I might implement the bull put spread strategy if I ever buy more options to limit my downside.

  5. What is the best way to invest for retirement? We contribute to our company 401k with no match (what percentage do you recommend?) we are empty-nesters with no debt. My son just graduated from college and I am looking to invest more money.

    1. 401k contributions are a great easy way to get things going for retirement savings immediately. As for how much, I’d say “invest till it hurts then back off a little”. Number wise, that might be 20% of your total income or 50% of your total income depending on how much you make and what your expenses are.

  6. Happy New Year Justin!

    Been following your blog for several years and I unfortunately are still working for a living, but I am trying to develop a income plan for selling naked put options. I was doing great in selling options until October 2018 when the wheels flew off mainly due to Amazon. I even considered at one time about starting a blog and share my years of experience trading options. One valuable lesson I learned from trading options is that I ALWAYS dump the option if my loss is double than what I was paid. Let’s say I got paid $1000 for an option, but now the option is worth $2000 to get out of the option, then I buy the option back. I have got burned to many times by holding out for the upside. I do the naked put option only as a side gig for my investments, but my plan is one day to make $1K – $3 a month doing the naked put option method. Keep up the great work!

    1. You clearly know more about options investing than I do! I’m too risk averse and hands off to try to make any serious recurring money from options. But who knows, maybe I’ll learn more and start small? I’ve heard options are a great way to make money until you don’t. And times like Oct-Dec 2018 probably are those times that cause painful losses.

      I saw your blog name – just curious if it’s inspired by Root of Good? If so I’m flattered! 🙂

      1. And Yes Justin your website name inspired me to start my blog (rootofrenting) about my Snowshoe Rental Investments. I am learning a lot about resort rentals (start fall 2017) and I thought it would be a good idea to share my experience. I just purchased my second Snowshoe property (fall 2018), and I thought I would let my followers learn if its worth the effort and time. For this new property, I will have to update it during the off season (Spring and Fall), and I should have plenty to post about my experience. I am a novice to this blog thing, but my plan is share actual numbers and expenses so people can see the actual results.

        You are correct you can make fast money when you pick the right direction and the option works in your favor, but when options go bad it goes real bad. My rule is the higher rate of return as can result a greater loss too. I would say options is about as risky as it gets, but I can say in your spare time you could do some practice trades to see if it works. I love AMZN for options trading, because the payouts are high but you can lose money real fast as well. Keep up the great work! 🙂

        P.S. Me and my family love to cruise. Me and my wife are taking a 14 night transatlantic cruise Spring 2019 and Fall 2020 for about $1800 ea! You should try one they are a great and very relaxing! The whole family is going Thanksgiving 2019 7 day

        1. I’ve been looking at Transatlantics for a while. Hopefully we can make it happen soon! I never get bored on a cruise so I wouldn’t mind eight or ten sea days and lots of lounging and staring out at the ocean. In fact, I find the seven day cruises with 4-5 port days rather busy and always wish I had another day or two to relax and do nothing.

          1. Checkout November 1, 2020 on Royal Caribbean 14-night from Barcelona, Spain to Miami for $744 a person (Inside room I am to cheap lol) Stops in Spain, Canary Islands, and Royals remodeled CocoCay which I am super pumped about going too! Then we could chat about money my favorite subject! This is on the Allure of the Seas which we are excited about cruising on, because we have not cruised the Oasis class yet!!!

  7. Yea this decline has been hard to watch. I was ok with a correction but it went down a lot more than I thought it would. Hard to see that much money on paper evaporate but I try to remember how much I’ve made over the last few years. It works on the way up too. I’ve been buying on the way down with some cash I’ve had in savings, but like you mention the decline swallowed it up like it was nothing. I was doing the same thing with automatic investments in my IRA’s and 401k back in the recession and I think it really paid off for me and put me where I am today. Back then, it was long term and just something I needed to keep doing so I didnt even think about it much and just kept going to work. My belief is the S&P 500 will be making it back to the 3000 level at some point (I use that as a general gauge) and I’ll be in really good shape. Always enjoy your blog and the ideas and inspiration you bring with it. Keep up the good work.

    1. Agree on S&P getting to 3,000 some day. It might be a year or two or it might be 10 years. Either way we’ll collect a lot of dividends and if it takes 10 years then we’ll probably have a FANTASTIC decade after that.

  8. New to your blog. Biggest observation, you could not be living your life sytle without the astounding Affordable Care Act subsidy you receive for your family’s health insurance.

    I live in a high cost area of Central Calif. My medical insurance premium is $1200 per month with a super high deductible. Last two years I have scrambled trying to figure out how to drop my MAGI to the magic number to qualify for an ACA tax credit.

    Please share with your readers how folks can reach the qualifying number for those of us not receiving health insurance through our jobs. Thanks

      1. My home is the same size as yours and my property tax is north of $11,0000 a year. With insurance they are a solid $1000 a month. This is why so many of us folks from the NY area retire down there. My wife and I will be moving out of this area to a warmer LCOL area when we retire.

        The thing for us though is that we have a higher number to help us feel comfortable in retirement. I think that is a side effect of living in a HCOL area.

        1. That property tax is crazy but I have heard similar dollar amounts from lots of other folks from the northeast. You can definitely do a lot better and enjoy nicer weather (and people 😉 ) too!

  9. As always, great photos! I’ve only been to Savannah once but it’s an unforgettable place; the Spanish moss, the architecture, and the people are like nowhere else on Earth. Or at least, nowhere else outside of that bit of coastal Georgia/South Carolina (we’re lucky to have close friends near Hilton Head, and we attended a wedding on Fripp Island ten years ago).

    My wife and I both got small promotions in the last month, and I’m front-loading my first month’s pay into my 401(k)… so hopefully I’ll be buying while it’s still lower than it was in the whole of 2018. Even after all the ruckus since October we’re only about 1% off our conservative long-term savings goals. No worries.

    ps: send some of that snow up north, will ya? DC hasn’t seen ANYTHING yet this year!

  10. 2018 was an ok year for investments. Investable net worth up 9.6%, 2017 was better. Left mega corp about 3 years ago, so, net worth increase is after living expenses quarterly taxes and college removed.

    You’re approaching the puts the right way, only companies you would want to own and get paid to wait for your price.

      1. Justin,
        I’m a real estate guy. I’m in Cary. I have a few rentals and primarily invest in fix and flip lending. Here’s one, lent $130K, I’ll generate 7k in 3.5 months

        120K in

        I’m in DFW (used to live there), RTP (and surrounding), Memphis and just opened up Columbia SC. If borrower cannot sell at decent price, I’m first position on the deed and get the property.

        My allocation is overweight real estate, but geographically diverse with rentals and notes.

        1. Okay, that explains it 🙂 I’ve seen a lot of RE guys who did very well last year between cash flow and appreciation and they just shrug at the market losses.

  11. Big market drops seem to be all the rage these past few months! Oh well, can’t be good times forever I suppose. As a younger investor I’m relishing the opportunity to buy stocks a bit cheaper and ride it all the way down (and inevitably back up) like you mentioned!

  12. A Christmas cruise! What a great idea! I wish I’d thought of that! We hosted for Christmas this year, and it’s always a ton of work to host family and friends. A Christmas cruise must be the ultimate way to relax during the holidays!

    Fabulous update btw Justin! I’ll be very curious to see how your options trade turns out. Please keep providing updates on that one.

    Thanks for mentioning my recipe in your post too!

    1. The cruise itself was great. We got stuck in what I assume was horrible Christmas traffic driving down I-95. What should have been a 9 hr drive slowly became 12 hours. Lots of wrecks, possibly because of the heavy rain and extra traffic volumes of holiday-seekers. I’m a big fan of off-peak travel so this traffic aspect was disappointing. Such is life when you cater around the kids’ school calendar.

      So far the options trade is going my way. Carnival stock is up and volatility is down a bit, so I could buy back the option to close the position and pocket about 30% of the initial premium. I think I’ll let it ride though as I really would like to be forced to buy Carnival at a low low price. 🙂

      1. We drive to Florida every Christmas from Chapel Hill. We have learned that it’s best to drive overnight. You avoid all of the traffic. Otherwise, it is terrible, especially through South Carolina where it’s only two lanes in each direction.

        1. South Carolina was the worst. And usually is 🙂 We’ll definitely be doing something different next year. Maybe leave very early in the day so we’re out of SC in the morning.

  13. Awesome low spend year for you as usual RoG!! Amazing how you live the $100K lifestyle at the poverty level. Mine is still running me ~$100k !!! $110K this year actually with $60K spending and $50K debt service Blerggggghh.

    That $60K included ~$10K in capital improvements between our house and truck/camping set up. Hope to rein that in to more like $48K for 2019. 2016 = $46K, 2017= $53K

    Contemplating lowering/slowing down the debt payments to $36-$40K a year to pump another $10K or so into 403/457. I spent 2012-2016 as a partial/full SAHD but now I’m back to full time work and my wife has gotten a couple decent raises and our taxes are getting crazy now (imo). Still pondering the pros/cons!

    Anyhow, enjoy the Blog. Happy 2019 to you and your family.

      1. Ha! Yes serious money making is a good thing 🙂 We are approaching similar incomes from your classic “$150 tax on $150k income” post. Only our taxes are more in the $20k range!!! (Fed/state combined)

        Hence me considering priortizing some increased contributions over debt paydown. Still mulling it over. Math says invest, emotions say keep going on debt.

  14. Another great year on the books.
    Small world! We also happened to be in Jacksonville, FL for a few days leading into New Year’s.

    I didn’t have any money back in 2008-2009 so this is the most significant “loss” in net worth I’ve ever had. Happy to report I’m still sleeping well, and happy to put fresh money in. Will be interesting to see how the market continues to move.

    Do you see yourself starting to take bigger positions in options?

    1. What a small world! We didn’t do anything in JAX except sleep and get up the next morning and drive to Savannah. It was the night/morning with all the fog (Dec 29th into the 30th).

      I’m not sure if I’ll dabble in options any more. Perhaps. I might sell some more naked puts if volatility is high and I want to be assigned on the underlying. Like if I decide to increase my equities allocation above 90%. Though I kind of like this 10% fixed income cushion. 🙂

  15. The most important question is… Did you order desserts after eating all those lobster tails and fillets? Or did you proceed to the stateroom and sleep? 😀 :p

    Very impressive when it comes to expenses, very low. The Christmas cruise sounds awesome, we are looking for a family cruise, so let me know if you find anything good. 😉

    Thanks to the market, looks like most people had negative results when it comes to their net worth. Oh well, market will recover.

    1. I think I skipped dessert at the lobster dinner. Focus on the “High Value Targets” is my main objective 🙂 In general I find the desserts on cruises to be disappointing (though our last cruise on Princess proved that desserts on a cruise can be good).

      When/where are you looking to cruise? I see occasional deals out of Vancouver or Seattle to Alaska (probably summer or shoulder season). And a good bit from west coast ports. I never pay much attention since it’s so far from us and Florida cruises are so cheap and plentiful.

  16. You are a better man than me! I could not withstand losing 3X my annual household expenditure in one year. I’d get cranky and start cursing the world if that happened.

    I had to trade my House Sale Fund portfolio like a banshee in 4Q2018 to close up 5.7%. If it wasn’t for the post Christmas rally, I would have been down. Trading that portfolio was too stressful, but I wanted to take advantage of volatility.

    Any tips on how you stay fine with the net worth loss? What level of net worth would it have to drop to before you start feeling the heat?


    1. I think I’d start wondering if this whole early retirement thing was sustainable if my portfolio got close to $1 million. Maybe $1.2 million (about what I started with 5.5 years ago). How to do it? I don’t see an alternative other than worrying over the losses. I do have a nice 5 year stash of fixed income investments that aren’t risky at all so I can always live on that for 5 years while I rebuild my finances should the absolute worst case scenario happen (WW III + Great Depression II??? Asteroid strike??)

      1. The problem with me is that I always see alternatives e.g. holding cash, buying bonds, shorting, etc. So it kills me to lose money or underperform.

        Perhaps this is a case of where ignorance is bliss, and it is my curse that I spent my career in equities. I promised myself I would never lose money in equities again after the financial crisis. Maybe I should just let go, b/c what’s the point if you’re already past your FIRE number. Hmmm.

  17. Question,
    If your income was 70k and you only spent 30k, what did you do with your other $40k? You know I still don’t fully understand how dividend income works so there’s that.

    Are you still funding Roth IRAs? Or do you just redeposit it into your Vanguard accounts?
    You did the cruise during Christmas in 2016…is that becoming a fam tradition?

    1. You guessed correctly – the other ~$40k ends up in my Root of Good 401k plan, and I max out the Roth part as much as possible. Also do quite a bit in traditional 401k and IRAs. Roth vs Traditional comes down to what I need to do to hit my ~$40k AGI target. I also do a little bit of Roth IRA conversions each year too.

      We’ve been on a few cruises right before Christmas but this was the first one. It’s mainly aiming to take advantage of the kids’ time off from school. In general Christmas cruises are more expensive and they are busier and there’s more traffic on I-95 so it’s not an ideal time to cruise (other than the kids’ winter break).

  18. New to this and am trying to make sense of it all. My husband and I have an income about double yours, but owe a lot in debt due to school loans, health bills, car loan and mortgage. We pay over $1,000 a month for a very basic health care plan for our family of four. You barley pay anything for health care and your internet is low too due to a lower income but you have a ton in investments. To qualify for those things does it not matter that you have a ton of money already? Something about that doesn’t seem right.

    1. ACA subsidies and our internet provider’s low cost program don’t have any asset test at all. Strictly income. And because our spending is so low and we can generate whatever income we want by selling more or fewer investments, we can hit a particular income target to maximize our ACA subsidy. I’ve always thought that the current system isn’t fair to those still working as it’s harder to qualify for subsidies. And I don’t “need” the subsidies yet I qualify for them anyway. Oh well – perhaps Democrats and Republicans can work together and make things better?

    2. You bring up a great point that more people in this country should understand.
      at Federal level, there is little to no tax on wealth, Feds and most states tax income.

      This is important distinction. When a politician claims he/she wants to “tax the rich” so they pay their “fair share.” Know that the truly “rich” don’t have much income.
      Warren Buffet and Bill gates have little income.

  19. Oh my, that cruise looks wonderful. I can’t believe all that food is free! Firebear would love it. He could even program with the hackers for fun! We really need to consider going on one next year. Is it usually super cheap around Christmas? We spend it in NYC every year anyway just by ourselves so it would be great to spend it on a cruise.

    1. The week of Christmas and New Years is actually a very expensive time to cruise. Usually 3x the going rate just before or after. September through January is low season and you see a lot of good last minute deals during those time periods. I’ve even seen a few good deals from the NYC area ports.

      The main dining room (sit down, table service) is free but they have some upsell items like surf and turf. It was free on our cruise because it was a Christmas cruise. We didn’t actually pay the 3x higher prices for Christmas, because we booked on a price mistake fare that they still honored (and it disappeared after a day!).

  20. Congrats on another great year. I lost ~200K in December. But I survived 2008 and 2000 so I’m sure I’ll survive 2019.

    Another credit card to consider is the Barclay Arrival + Mastercard. Current offer is 70,000 miles/points with a 5K spend in 3 months. $700 in travel expenses can be “erased” using the points. High spend though.

    1. I may get the Arrival +. But I’m hoping to get the Citi Prestige once it comes out to take advantage of the family Priority Pass for our trip to Asia. And I’m trying to keep us under 5 personal cards each so I can keep getting Chase Biz cards.

  21. Wow, looks like it was quite an eventful month all around! Being that is now dinner time as I read the post, I’ll find myself walking away from the keyboard wishing I could consume one of the dishes depicted in this post, but will likely settle for a P&J.


  22. Hey Justin,

    Thanks for another amazing post! I refer all of my debt coaching clients and subscribers ( to your blog to show them evidence that frugal living is both possible and advisable. You and your family do such a great job of practicing what you (and we) preach!

    It’s amazing to me (and to our FIRE community at large) how the general public is just absolutely programed to spend, spend, spend.

    Keep up the great work and hope to meet you out there on the road! Holla if you’re ever in the Atlanta area!


    1. Sweet. I had to pay a $5 fine when I “lost” mine 😉 I figure they were okay with me taking a souvenir from the gym for $5 given the tens of thousands of dollars I gave them over the years.

  23. Ouch. 4 years worth of spending gone in just a month is not very aspirational my man.

    Good thing the stock market has recovered this year. It’s probably worth doing more to protect your assets.

    At least you don’t have to pay taxes.

    1. Since Justin has been too polite to defend himself, I’ll add a rebuttal to Godfried’s comments.

      Over the ~5 years Justin’s been retired, his portfolio has grown by ~$650K, including December’s drop. That’s about an 8% annualized return and represents a net positive increase of 16.5 years of spending (at his $40K budgeted total). So, while a three year drop is substantial, it has to be viewed in the context of the gains he’s achieved.

      As for protecting his assets, Justin could diversify into other areas (e.g. real estate). But, that is no guarantee either — remember the great real estate implosion of 2008 that dropped home prices in high-growth areas by 30% or more. Of course, Justin could also put more money in cash equivalents or lower-risk bonds, which would reduce down-side risk. But it also reduces the up side: his return over the past 5 years would likely be no more than an annualized 3% in a cash/bond portfolio instead of 8% from an equities portfolio.

      Justin does mention in the article that he maintains a defensive 3-year cash-equivalent portfolio to allow him to ride out short-term volatility in the markets. This helps insure him against having to “sell low,” i.e. having to draw down on his equities during a dip.

      The real risk Justin is taking is one most of us take: basing our investment strategy on past historic trends that we assume will continue indefinitely into the future. Without being prescient, that’s about the best you can do, as no strategy (even cash) is risk-free. If there were a guaranteed low-risk, high-return approach to investing, we’d all be doing it!

      From what I see, Justin’s done a good job of identifying and mitigating risks, which is why he doesn’t panic when there’s a dip like this. I would be curious if Godfried could be specific as to what protection strategy he uses/recommends as well as some indicator of how that strategy would be expected to perform over a 50 year period compared to Justin’s.

      1. All good points 🙂 We’re doing pretty well for ourselves with basically a “do nothing” approach. You are right in that my real risk is that the stock market stops going up forever over very long periods of time. It certainly could happen. Somehow I feel like I’ll be a lot better off than most people if that is the case.

  24. Hey Justin! On the topic of cruising, Mrs. CFMG and I planning to start doing at least one cruise per year starting in 2019. Unlimited prosciutto has a profound effect on me. Looks like it’ll be mainly Norwegian; we enjoyed our first cruise with them (except for constant sales pitches onboard) and want to build up “frequent cruiser” benefits. Am studying up on cruise pricing, and how prices tend to drop after the full payment date (typically 90-120 days prior to sailing) has passed. Granted, this is less likely on high-demand cruises at peak times. Our plan of attack is to block a couple of off-season weeks on our calendar (because we have flexibility due to no kids in school), wait til we’re 120 days out, and then look for deals. Norwegian uses a bidding process on many sailings, allowing many booked passengers to bid on cabin updgrades as the sailing date approaches. Which might mean booking an inside cabin (assuming plenty of higher cabins are available) and then bidding up . . . . . at the risk of a perturbed Mrs. CFMG if we end up with that inside cabin. Any other cruise booking strategies that you’ve had luck with?

    1. That’s the basics – I think you’ll get the absolute best prices if you book last minute (under the 120/90 day mark or whatever). Assuming you’re flexible on the itinerary and ship.

      Check out too. I like how they include the taxes and fees in the price per night search results. Easy to drill down to “all Florida departures on NCL” then sort by price per night. Also consider buying NCL shares if you are sticking with them. You get ~$100 per 7 day cruise as a “shareholder benefit”.

  25. Awesome update! I wonder if you were ever assigned the Carnival shares when you sold the puts?! Would have been the perfect market timing to get the underlying in December and then benefit from the subsequent rebound!
    I haven’t bought the Royal Caribbean shares yet because I noticed that we already got onboard credit as part of the special offer we got when we booked our upcoming cruise in April. The conditions for the shareholder benefit state that the offer can’t be combined with any others, so that’s something to keep in mind!
    Happy New Year from the West Coast!

    1. Happy New Year to you guys too!!

      The Carnival put never got assigned. I wrote the put for $354 and now it’s trading at $260 or so. Strike price is $37.50 and I don’t think CCL traded below $46 since I wrote the put (at a CCL price of $48-ish). End result: I didn’t get the shares but got almost $100 “profit” so far.

      As for the RC shareholder benefit, I think you’ll still get it. The “doesn’t combine with other offers” doesn’t mean exactly that. Apparently it won’t combine with RC offers but it will combine with on board credit offered by a booking site or travel agent. Here’s a thread at Cruise Critic where people are saying they’ve combined it in exactly that manner. YMMV I suppose. I so rarely get on board credit that it would probably be valuable to us. Also note that it applies on Celebrity and Azamara cruises too (RC’s wholly owned subsidiaries).

  26. Annual expenses of $29,000 with 3 kids is outstanding !
    I am FI but still working part-time for fun. I may stop working completely this year.
    Best wishes to you and your family in 2019.

  27. In your annual expense total for 2018 I didn’t see anything for clothing. Three kids and you didn’t spend a dime on clothing. How is that possible?

    1. Nudist colony residents? Ha ha!

      The clothing line item is so small that it got pushes to the extended view in my Personal Capital screen cap. Clothing and shoes totaled $490 for 2018. There’s a fair chance the occasional pair of socks or a few items of inexpensive clothing ended up in the “groceries” category if we grabbed some clothing along with a big grocery purchase at Walmart, so that number might be off slightly.

  28. When there’s a stock market crash, I try to focus on the amount of shares I’m buying. I like to take the value of the stocks off the table and just be happy that I’m getting more and more shares.

    As you say the inevitable recovery will happen. And I’ll have be there with a bunch more shares.

    1. We’re still reinvesting dividends in the retirement accounts so I guess I should be thinking the same way as you. Every dividend payment buys a few more shares when the prices are low.

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