February 2018 Financial Update – Weathering Big Losses

Time for another monthly update now that I have wrapped up month #54 in my early retirement journey!  Spring arrived a little early in North Carolina and that means more time outdoors for us.  Goodbye two weeks of “real” winter, we hardly knew ye!

From a financial perspective, February was a tough month punctuated by a strong dip in the stock market, officially putting us in a “correction” with the Dow and S&P 500 index both registering declines greater than 10%. At month end our net worth was down by $58,000 to a “mere” $2,056,000. The silver lining is that our income for the month remained strong at $4,736 while expenses of $3,108 tracked closely to our $3,333 budget.  Spending less than you “make” soothes the sting of a big shift downward in net worth.

On to the details!



Investment income was only $314 in February.  This represents monthly interest from CD’s, bonds, and the money market account.  Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December.  March will find us with significantly higher investment income given the payout schedule on our equity investments.  More on our dividend income.

Blog income, shown as “other income” in the chart, declined slightly to $2,028.

My early retirement lifestyle consulting income (“consulting”) of $712 was roughly the same as January.  That works out to almost two hours of consulting per week which is the upper limit of what I’d like to do.


Gotta keep my schedule free so I can get outside and enjoy the scenery!


Deposit income of $1,680 came from two sources.  I received $1,200 from signing up for the Capital One Spark Business card and completing the $10,000 spending requirement to qualify for a $1,000 sign up bonus (plus 2% cash back on the $10,000 spent).  This led to moving some expenses forward into December, January, and February to meet the $10,000 “goal”.  If you want some of this free money being handed out, check out the latest credit card offers.

The second source of “deposit income” was $480 in cash back from the Ebates.com and Mrrebates.com online shopping portals (some of which was earned from you readers signing up through these links).  If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card.  Some big cash back from Christmastime shopping is finally rolling in the doors this month.

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 take a look at February expenses:

As mentioned, I had to spend $10,000 to qualify for a $1,000 credit card sign up bonus. This led to extra spending in December, January, and February to hit this target.  In February, we spent extra to prepay utilities and I paid two months of health insurance premiums.  As a result the next several months will see lower than average spending in these categories.

In spite of the extra spending, the monthly total spending of $3,108 in February came in just shy of our target spending of $3,333 per month (or $40,000 per year).


Utilities – $1,906:

We prepaid utilities as follows:

  • Electricity – $801
  • City Water/Sewer/Trash/Recycling – $755
  • Natural Gas – $350

We average about $250 per month in total for these three bills, so we effectively paid 7-8 months of utilities all in one month.  See you in September, you dirty utility bills!  As an added bonus, it’ll be nice to not worry about paying these bills while we vacation in the Bahamas for a month during June and July so I can let my mind focus on more important things like crystal clear water, sand, wind, and waves.

February was also a very warm month in Raleigh. As a result we didn’t have the heat on about half the month so our gas heating bill was about half the normal amount for a typical February.  Yay global warming?!


Healthcare/Dental – $728:

Our 2018 ACA plan is slightly more expensive than our 2017 ACA plan though we’re still getting heavy ACA subsidies.  The $728 payment reflects two months of health insurance premiums.  I elected to forego $300 per month in ACA subsidies so we’ll probably get that back at tax time to cover any tax due (in lieu of paying estimated taxes).  I’m departing from that strategy going forward since it looks like we might be better off taking all the subsidies we can get.  Depending on income levels, we may not have to pay back 100% of any excess ACA subsidy.  I’m still learning the intricacies and interplay of regular income tax and ACA Premium Tax Credits.

We also had a dental visit during February but it was paid with a Visa Debit card purchased in December (to meet that $10,000 spending requirement!).  As a result the $150 expenditure is not reflected in February’s expense report which is generated automatically from Personal Capital.


Groceries – $296:

Our grocery expense was significantly less than a typical month.  We’ve slowed down on alcohol which saves some money (go figure 🙂 ).  And we did dine out slightly more often than normal (which is to say we dined out a few times in total).  February is also a short month.  Otherwise it seems like we ate like we always do and shopped in a routine way. End result: lower than average spending on groceries.

More on how we shop for groceries without using coupons.  And why we never shop at Costco.


Homemade spring rolls with peanut hoisin dipping sauce


Clothing/Shoes – $79:

We bought three pairs of Saucony running shoes for about $120 total (the missing $41 was spent in a separate order on one of those prepaid debit cards purchased in December and not tracked in this spending report).  We actually bought five pairs however two of them didn’t fit so we took advantage of the generous free return policy. One of the pairs was a mismatch – the left side was size 9 while the right side was size 9.5 (neither fit).  End result: all the ladies in the house are re-shoe’d just in time for spring.

New shoes = time to hit the road!


Gas – $39:

We filled up in early February and still have three quarters of a tank going into March.  I’ll probably top off the tank before the end of March since I earn 5% cash back on gas this quarter with my Chase Freedom Card.


Restaurants – $38:

We revisited an old favorite restaurant of ours that has changed owners since we last visited many years ago.  The Wild Cook’s Indian Grill near North Carolina State University in Raleigh serves up a truly wild spread of more than a dozen hot dishes. At only $7.99 for their lunch buffet you wouldn’t expect much. But you would be wrong!  We paid for our two lunches and grabbed a takeout plate to share with our kids for dinner (also $7.99 for whatever you can fit in a styrofoam tray).


Wild Cook’s Indian Grill in Raleigh. Butter curry chicken, rice, and a bunch of other stuff


For Valentine’s day we grabbed some Chinese takeout (including sushi) from our neighborhood favorite for about $12 (cost not included in the $38 restaurant total since I paid with a previously purchased Visa gift card).  We considered dining in but they jacked up their normally priced $7 buffet to $13 as a courtesy to help guys celebrate Valentine’s day without their date thinking them cheap for taking them to a $7 buffet.


Potstickers, sushi, an assortment of chicken and what is that? Krab meat wrapped in bacon?!? Yes! I have a feeling it’s not really authentic Chinese but it tasted good. 🙂


Our third restaurant outing was $11 for a box of fried chicken and biscuits from Bojangles. We skipped the dine in option and chose an al fresco seating arrangement on our back deck instead.  I took a few dollars off the price by buying a Bojangles gift card through Cardcash.com (sign up through that link and you get $5 off your first purchase). I also use Raise.com to save money by buying discounted gift cards (take $5 off your first Raise purchase too).


Bojangles – a regional fried chicken chain that beats all the rest. And they don’t serve this deep fried goodness with any hipster waffles either.


Cable/Satellite – $14:

$14.99 per month for 30 mbit/second download speeds and 4 mbit/second upload speeds with no data caps.


Home Maintenance – $4:

Our microwave stopped working.  Over time it grew harder and harder for the door to shut completely so that the microwave would turn on.  I figured it was a simple switch or relay that went bad and sure enough it was. After a bit of troubleshooting (remember: youtube is your friend) and voltmeter usage, I isolated the faulty switch and ordered a new one for $4.  While waiting for the switch to arrive, I decided to rebuild and clean the faulty switch by sanding off some of the carbonization so that it could form a more complete electrical connection when closed. So far, so good with that rebuilt switch. I still have the $4 switch waiting for installation if my improvised repair fails.

Not a bad way to avoid spending $100+ on a new microwave!

Tip: working on microwaves can potentially blow your fingers off if you aren’t careful.  If you don’t know or can’t learn how to safely discharge the massive capacitor inside most microwaves, then you might want to skip DIY efforts in this case (assuming you don’t have a surplus of fingers you’re looking to rid yourself of).  


Taking a break in the park


Total Spending in 2018

Two months into 2018 and I can see a pattern emerging. We’ve only spent $4,332 of the $6,667 budgeted for two months of our $40,000 early retirement budget. And that’s in spite of prepaying seven months of utilities during February (which will lead to continued low spending months through the end of summer).

It feels like we’re living a $100,000 lifestyle on $40,000 per year or less.  After four years of early retirement, our spending has averaged $32,000 per year (see summary below).


Monthly Expense Summary for 2018:


Summary of annual spending from all years of early retirement:


Free entertainment = lakeside campfires



Net Worth: $2,056,000 (+$-58,000)

It’s been fun watching our net worth increase ever upward for the past two years (other than one bad month in October 2016). Then BOOM! A big fat $58,000 loss in a single month.  In fact, eight days into February we were down an astounding $122,000.  Such is the risk with a 90% equities investment portfolio.  Eventually the stock market rebounded and we gained back about half of those losses during the remainder of February.  Year to date, I’m feeling zero pain since our net worth is up a comfortable $19,000 since January 1, 2018.

I don’t know if the good times are over or if this is just another brief blip in the stock market’s continued long term growth.  But I have to say the ride has been fun so far.  Imagine this: in February of 2016 Mrs. Root of Good quits her full time job to join me in early retirement. Our net worth sits at $1,435,000 at the end of February 2016.  In less than two years our net worth skyrocketed almost $700,000 by the end of January 2018 (in spite of both of us being early retired!).


I’m happy with all the gains we have enjoyed the past several years, but I would still be very happy with the $1.4 million or so we had two years ago.  It’s still plenty to enjoy our planned $40,000 per year spending.  So if the worst case happens and we lose $700,000 from our net worth high water mark, I’ll still be smiling every day when I wake up and know I don’t have to go to work.  I doubt we will run out of money during early retirement even if we do see a continued stock market decline.

On the investing front, I shifted to a more conservative 90% equities and 10% fixed income allocation during 2017 into early 2018.

We now hold fixed income assets totaling $176,000:

  • VBTLX Vanguard Total Bond Market Fund – $146,000 (held in traditional IRA)
  • Credit Union 2% CD’s: $15,000
  • Checking and Money Market at 0.25% and 1% respectively: $15,000

With this level of fixed income investments and liquid funds, we’ll be able to wait out a five year stock market correction without needing to sell anything at a capital loss. Factor in a reasonable level of dividend income plus what I’m earning from this blog and the minor consulting efforts, and we’ll be able to stretch those fixed income funds even longer.  So while living through a 30%+ stock market correction will be interesting, it won’t necessarily be damning for our early retirement plans.

Maybe we’ll spend the summer somewhere cheap like Mexico instead of Europe to help cope in the event of an economic downturn.

Goodbye February!


How is 2018 treating you so far?  Ready for spring to arrive?



Want to get the latest posts from Root of Good? Make sure to subscribe on Facebook, Twitter, or by email (in the column to the right) or RSS feed reader.


P.S. I’m giving away two free copies of “Meet The Frugalwoods: Achieving Financial Independence Through Simple Living“. It’s the hit new book from fellow FIRE blogger Liz Thames (who you probably know as the author of the Frugalwoods blog).  From previewing an advanced copy, I can tell her new book is an engaging read!

To enter yourself in the drawing for a copy of the book, comment below and mention you want to enter the drawing for the book. I’ll pick two lucky winners on Tuesday March 13, 2018 and I’ll contact you by email (so leave a legit email in the comment form!).

**The book giveaway is over. Congrats to the lucky winners Mary W and Amy S!**

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  1. Why do you hold the total bond in the IRA?

    February was rough for us too, and we bought a little on the dip because we are still making income. March will be rough for us because of a marriage penalty tax payment. We look forward to a simpler tax situation similar to yours!

    1. Traditional IRA is best place for bonds. Slower growth than stocks over the long term = less taxes when I withdraw/convert later. Tax deferral of interest is great too. I’d rather have stocks in a taxable account and in Roths. Cap gains are low tax and Roth is great for high growth stuff too. So by process of elimination bonds end up in Trad. IRA.

        1. That’s just like… his opinion, man.

          I keep my bonds in my 401(k). If were to keep any in taxable, they would be munis, but I don’t see a compelling reason to do so.

          I do like Jim’s point that having all of your bond portfolio in an account that will be taxed later actually means that your overall asset allocation is tilted a little heavier towards stocks than you think / say it is if you’re just counting dollar for dollar.

          I tax loss harvested the dip. I’m no market timer, but I happened to time that one just right.


          1. “I do like Jim’s point that having all of your bond portfolio in an account that will be taxed later actually means that your overall asset allocation is tilted a little heavier towards stocks than you think / say it is if you’re just counting dollar for dollar.”

            Is that really true though? I treat asset classes as fungible regardless of where I hold them. I can switch from stocks to bonds (or vice versa) in a tax-advantaged account with zero tax implications. And on the margins I can switch from stocks to bonds (or vice versa) in taxable accounts with a minimal (and manageable) tax hit. So just because I have my 401k full of bonds, it doesn’t mean the bonds themselves are worth less since I could always flip flop the positions and end up with the 401k full of stocks and my taxable account full of bonds. It would take me a few years to do so in a tax efficient manner (40k cap gains per year would just about do it after 3-4 years).

  2. Shrug it off…. if it kept going up the way it has for the past year you’d have $5 mil by next year. It’s unsustainable.

    I suspect this year will be an up and down rollercoaster, but who knows. Nice spring rolls by the way!

    1. That’s the way I approach it. I’d rather have these periodic 10% corrections to shake things up and scare out the speculators and risk-takers instead of inflate a big bubble then have it pop and our economy go deep into recession.

  3. $296 for groceries for the full month for the five of you! I am trying to reduce ours but not close to $296 at all, I don’t know if we could actually do it.
    Great report Justin as usual. And $58K is not that bad considering you still have over $2M:)
    How do you keep track of all your travel rewards/gift cards, just a spreadsheet?

    1. Travel rewards and credit cards I’ve applied for are all in a spreadsheet. Gift cards I keep in a Google Keep note (if electronic) or rubber-banded together in a basket in the kitchen (if physical). I mostly buy them with the intent to use them very soon.

  4. Nice work, Hoss! I figure we’ll have about 1.4M in Net Worth when I retire early next year. Glad to know it’s served your family well. We’ll probably be close – around 50K in budgeted expense per year.

    No waffles with your fried chicken? Hallelujah! 😉

      1. Because you are young? I see it both ways- more dangerous to spend more young, because the stash has to last. More dangerous when old because there’s less chance of a market rebound. What do you think?

        1. 4% only works if you’re looking at 30 years of retirement, so you have to spend a little less if you’re retiring in your 30s or 40s. So I guess I’d say “more dangerous when young bc your stash has to last longer”. For older retirees you also hit SS much sooner in retirement so your portfolio won’t have to do as much heavy lifting. For those of us in our 30’s SS is so far away as to be almost non-existent in terms of portfolio survivability modeling.

          1. The 4% rule was just using simple math without incorporating average returns of the market, etc (an average of 25 years in retirement x 4 = 100% of assets). It still is a reasonably good barometer of potential success. For those younger with more potential years do the simple math again to see what % you could reasonably use.

        2. When you’re older, you don’t have as much time left on this earth, so you can afford to have a higher withdrawal rate than someone in their 30s or 40s.

  5. Enjoying the updates, and good family time pictures. I try to balance my fire goals without missing out times with my kids and enjoying life.

    Would like the frugal woods book.

  6. Thank you for the “candor” in disclosing the gyrations of your investments with the latest market correction. Too many times bloggers only share the “good news” and not the “bad news”. And certainly count me in for the drawing on the “Frugalwoods Book”….I have followed these guys for some time….I recall when they were childless and Mr. Frugalwoods rode a bike to work…even in the snow. Now they are out on the Farm and have two little girls. Thanks once more for the timely blog…

    1. I’m all about transparency!

      It’s been fun following the frugalwoods folks. I still remember when they revealed they finally found their homestead property after searching for a long, long time. And cool to see them coming out with a book!

      1. Wow! Mrs. Root of Good is amazing if she can feed all of you for that little amount! Can she be a guest blogger and share some tips and tricks? I have seen you share some tips throughout your blogs, but I think that she would have a popular blog post if she shared some of her secrets with all of us ladies. 👍

        I would love to win the new book from Mrs. Frugalwoods! Always looking for more tips on increasing my savings rate. I’m at 60% now. Thank you for entering me in the raffle.

        1. I do a lot of the grocery shopping strategizing and we usually shop together for groceries now. And we each have our specialties in the kitchen. She’s the pho chef, I’m pad thai. I do chili and tacos. She does steak and eggs for the kids. 🙂

          1. It is inspiring to read this post to see how calm FI folks reacted to the market dip, made us want to reach FIRE soon as well!

            Thoughts on using ibotta to get cash back on groceries?

  7. ***Frugalwoods draw entry please

    As always, your financial reports are a great (and inspiring) read. You have a significant (5-year) buffer to ride out any major storm in the equity markets. What a great way to live!


  8. February was a tough month, but it is only a small blip on the long term radar. We saw a large loss for the month of beginning of February, but much like you gained some it back during the month. Working on this months report. Hopefully back on the positive track for the coming months. Thanks for sharing and would like to enter the drawing for the Frugalwoods book.

  9. Love the updates! I enjoy the “normal” months as much as the traveling ones!

    I’ll put my hat in for the book.

    1. I always tell people it’s like having a split personality. 9-10 months per year we’re relative homebodies and stay around Raleigh most of the time. Then 2 months per year we’re somewhere crazy doing something awesome! 🙂

  10. Always educational to read your posts. As a late 20’s civil engineer, its nice to read about someone else who started in this field and was able to achieve financial independence even while earning an industry-standard salary throughout their working years. Possibly my favorite page on your blog was your yearly breakdown of your salary and savings which led to your retirement. It really shows that theres no magic to it, just perseverance and commitment.

    Could I also be entered into the drawing for the Frugalwoods book, please? Thanks much!

    1. Pretty crazy that us “average” people can reach early retirement, too, huh? 🙂 I always like to tell people how I never made more than $70k/yr yet we still busted through the million dollar mark within 10 years.

  11. Love your monthly financial updates! I’m striving to track our finances to the detail that you are.

    I love the Frugalwoods blog, too. Please enter me into the free book drawing. Thanks!

    1. I started out copy/pasting my credit card statements into a spreadsheet then eventually migrated to Personal Capital completely (it’s 98% accurate though you can’t split transactions like I sometimes want to do).

  12. Nice job! With your net worth and the fact that you spend way less than the safe withdrawal rate you’re set for life.

    We’ve spent $0 on alcohol so far this year but our overall spending stayed about the same from the previous month. We had about 8 beers in our fridge from last year and 4 still remain.

    On another note, we’re looking forward to meeting you this week. 🙂

  13. I wish I understood how you manage $296 for a month of groceries feeding a family of five. I’ve read your grocery post and we shop at Aldi and Walmart etc. however we opt for organic on some items and lots of fresh veggies and fruit. Do you guys tend to eat more processed/packaged food? $296 for a full month for 5 people implies $0.66 per meal if you roughly figure 3 meals a day * 5 people = 15 meals per day * 30 days = 450 meals in an average month for $296.. Looks like you have a few restaurant meals but even then, maybe it takes that average to $.75/meal? Would love to hear more on how you manage that.

    1. This month was a lot lower than average. Some months we’ll stock up on things if they go on sale, so that could be in play. We don’t buy a ton of packaged/processed food (which tends to be more expensive in my experience). Lots of fruits, veggies (some frozen, some fresh), meat, staples, whole ingredients like milk, cheese, eggs. School lunches are another thing that throw off the monthly numbers since we add $100 per kid x3 at one time to save on the processing fees ($2 per kid). So I paid a bunch in December but haven’t had to add money lately. The kids usually eat lunch at school (and sometimes breakfast which is free for everyone at our youngest kid’s school) so the kids tend to eat about 13-15 meals at home probably.

      So maybe a dollar per meal? I figure we pay $0.07-.20 for a serving of fruits or veggies, $0.15 for 2 eggs, $0.05-0.10 for a serving of rice, bread, or pasta (including whole grain high fiber stuff). 2-4 oz of meat = $0.15-0.50, $0.10-0.25 for dairy, etc. Mix and match a couple of those and it’s not hard to assemble a balanced meal for $1. And sometimes the kids make their own meals (boxed mac n cheese $0.25 + whatever milk/butter costs; pho/noodles sometimes with eggs) and those tend to be cheap too. Lidl and Aldi make a big difference in keeping the prices we pay down to 25-50% of what regular prices look like to many.

  14. I’ve been waiting for the big market correction, sooner or later. All of our money is in real estate rentals so not too worried.

    Please sign me up for the book!

    1. It’s a lot easier to deal with fluctuations in value when it’s takes months for trends to develop and notice. We would probably all be better individual investors if these mutual funds only priced once per month 🙂

  15. Hey Justin – always enjoy reading your monthly updates! Please enter me into the drawing for Liz’s book.

  16. Just heard you on the ChooseFI podcast (I recently started listening to ChooseFI) and loved your plan for FI. I really enjoy your travel posts as well. I was wanting to know how you handle health insurance. I wasn’t able to find a way to search your blog. Do you have a post about what you guys do for insurance? We are at FI but my wife is worried about health insurance for us and our children.

      1. Thanks so much! I will take a look at these posts over the weekend. We are planning our trip to Europe this summer using AA Miles. Our travel hack is to stay with friends and family on our travel. We will start with family on Spring Break in Ft. Lauderdale and we have friends that we can stay with in Zurich and Vienna for our summer trip. We have two boys that are 16 and 14 so we are staying around until they graduate high school. Great tips you had on scholarships as well. Oh, I would like to be in the drawing for Mrs Fruglewoods book. I have been thinking about doing a blog about our travels and hope to start that soon. Best wishes!

    1. You can use Google using “rootofgood” as one of the terms, and add insurance or whatever you’d like and you should be good to go… though you’ll find a lot of material between his posts and the comments. And I do recommend reading the comments…. useful and entertaining. 🙂

      Please enter for that thar book please.

      Sorry, not a fan of Bojangles. I was quite happy when they put one in a couple miles from home. I’d seen them on road trips, but hadn’t made it into one. When they opened one, we tried it but it doesn’t compare well to KFC for us. Personal opinion of course. I most enjoy the chicken livers at some Popeye’s locations.

      1. Maybe it was because they were new? Worth a 2nd try (though honestly I’m not a huge fan of fried chicken like the rest of my house is). We do seem to visit Bo’s more on road trips than when we’re at home. 🙂

  17. I too am always impressed with your low grocery bill, consistently a couple hundred less than what I spend for my family of 5. Anyway, always enjoy the updates.

    Please enter me in the Frugalwoods drawing. Thanks!

  18. Enter me in the contest! Can’t wait to read Liz’s book. I ‘ve requested it through our library, but it taking time. Kudos to your family on living the good life frugally. Always pick up great tips with each post.

  19. I love coming to your blog every month to see your financial updates. You guys live a really great life for not a lot of money.

    **Please enter me into the drawing for the Frugalwoods book.

  20. Paying all those utilities up front seems like a great way to reach the spending minimum for credit cards when travel hacking! I’ll have to see if I can do that..

    You seem well positioned to weather out any kind of downturn so kudos to setting yourself up like that where you don’t even have to bat an eye at a drop like that!

    1. Prepaying expenses is a nice little hack I’ve been using for a while. Takes the stress out of getting a credit card where you have to spend X thousand within a certain period of time.

  21. Love your honesty and transparency, as well as your (amazingly) low level of spending and the fact that you don’t even try maximize your ER consulting hours, which I’m sure is financially tempting. You are the closest to 100% truly ER, and you do it with three kids while living a great life. Amazing, and always an inspiration.

    Would love to hear your views on the best travel hacking card deals, both business and personal, and also how you live on $250 a month of groceries (I guess Aldi and the generally low COL of the South help).

    1. Grocery expenses vary but most months they are closer to $500-600. I bet we just shopped a little less in February (like bought a bunch of groceries Jan 31 then again on Mar 1 so we only had 3 of the weekly grocery runs in Feb.). And Aldi/Lidl/Walmart certainly helps 🙂

      Best travel hacking deals – Chase Sapphire Reserve or Preferred probably the best offer. Chase Ink Biz is another great option if you have a business (or “business” lol). The Ink Biz card gets you 80000 Ultimate rewards points which you can redeem for $1000 travel spending on hotels, cars, flights, cruises etc.

      1. Thanks!! I had the Preferred and it didn’t pay off living in a Delta hub. Will see if the Reserve is worth it for me.

        Do I really need a business for the Ink? I sold my rental, so I have neither a “business” nor a business. I’ve hear that the credit fraud protections on a business card are much less, which worries me living in a high-fraud state.

        Thank you again for the advice. I wish Aldi/Lidl would open here, but alas not yet.

        1. There’s a 70k Amex Delta offer out there. Preferred or Ink Biz would be good to get 1.25x redemption toward hotels at least.

          As for what’s a business, even if you are working on starting a business in the future you can qualify 🙂 Thinking of going 1099 in the future somewhere?

  22. With the recent increase in interest rates, have you considered bond duration risk/reward in your portfolio given that the Fed has basically declared more rate increases coming in 2018?

    VBTLX has average duration of 6.1 and yield 2.97% (as of March 6th)
    VSCSX has average duration of 2.8 and yield 2.91% (as of March 6th)

    You could lessen your duration risk, for what appears to be comparable yield (although I realize VSCSX includes more corporate debt than government debt which adds default risk into the equation, it still seems like a solid trade-off?

    1. That seems like a reasonable analysis. Though I like the lesser credit risk of the total bond index. I guess you have to pick which risk you want to deal with.

  23. Send me that book! hehe

    Justin – Even if rental property investments moved you toward financial independence more quickly, would you still stick with the stock market because of it’s passive nature?

    Long live Elon!

    1. I chose passive index fund investments as my vessel of choice to get to FIRE. Nothing wrong with rentals as I think it’s a great way to generate wealth if you don’t mind the more hands on approach to it (I landlorded for a couple years and didn’t like it that much).

      1. Justin – With your capital, you could be a private lender for fix and flips (rehabs) in the triangle. No tenants and toilets. You put up the capital for the property and sometimes the money for the rehab. You can make 2 origination points (2%) and 1% a month. Most loans close out in 6 months. 100K would be 108K in six months and it is not correlated to the market.

        https://www.zillow.com/homedetails/205-Machost-Dr-Garner-NC-27529/50107297_zpid/ is an example, I have $145K in it but only received 1 origination point.

  24. I’m consistently amazed that you can do so much on so little. I’m waiting for your “How to” book. Thanks for the update, and I’m looking forward to the next installment.

  25. Would love to be entered into the contest for a copy of “Meet The Frugalwoods: Achieving Financial Independence Through Simple Living“!
    Great update too! You guys have your budgets nailed down, love it!

  26. I’d also be interested in the Frugalwoods book.

    And seconding Caroline’s question about how you track all the various rewards programs you use.

  27. Looks like another solid month Justin — although I have to say that all the prepaying for expenses makes understanding what you spent a little confusing.

    Like you guys, our net worth dipped a bunch early in the month but in the long run I think it’s just going to be a little blip. Hardly noticeable!

    1. I know it’s confusing 🙂 I’m a cash basis accounting person so when money goes out the door it hits my budget and these spending reports. That’s going to lead to weird accounting (like no utility expenses for the next 7 months 🙂 ). I need to add a little disclaimer section to these reports that spells out why there might be weirdness going on or some categories might appear lower/higher than usual (though I try to call it out if material).

  28. As always, thanks for the detailed update and thanks for the book giveaway contest! I’d like to be inside working less and outside enjoying myself more!

    1. ” I’d like to be inside working less and outside enjoying myself more!”

      One of the best parts of FIRE! I used to HATE walking into work knowing it was going to be a beautiful day but I would be stuck inside during most of the daylight hours. Not a problem any longer. And sometimes I find myself strolling down the sidewalk in front of my old workplace during the middle of the workweek – a guy on the outside looking into the crazy house 🙂

  29. Nice to see your updates justin. Frugalwoods is an interesting blog explaining more on living wealthy by living frugal. So, I would like to enter this contest and you can enroll me for this

  30. Ohhh I want to win a book :D!

    Also, did you plant those cherry blossoms? They’re quite pretty.

    Can you do a recipe post? I always see you guys making such awesome food for cheap, please share the recipes you’ve found online!

    You’ve had such a bull run, it’s time to come a little down!

    1. Yes, plz. Recipes!

      And please enter me for the book drawing. Thank you for having this blog even tho you’re retired. 🙂

    1. Look bud, I have no qualms with waffles (or any other breakfast bread-like food items). Just don’t combine it with my fried chicken. I believe in the sanctity of fried chicken and waffles and we can’t let them mix together. It’s just not right. 🙂

    1. I’ll whip out the long term capital replacement budget I’ve built. 🙂

      We actually spent $9,000 on a major exterior renovation (new siding, windows, major roof repair) in 2014 and replaced the roof in 2017 and both years we managed to stay under $40,000 spending. Seems like every year is something large and expensive. 2016 was our new (to us) minivan. So on average, our spending stays within budget. Right now I’m expecting our HVAC/furnace to need replacement and our hot water heater to go since they’re both approaching the design life. They might last several more years but a big expense like that wouldn’t shock me at all at this point. It’s in the budget!

  31. Pick me, pick me, I also wish to join the lottery for Liz’s book please.

    When are you going to write your own book, Justin?

    Great month for you as usual!

  32. I recently moved from Chapel Hill (well, actually Silk Hope) to the Twin Cities, MN. It’s snowing as I type. Your posts make me miss spring in the south – nothing better!

    Please enter me in the drawing for the book. Thanks!

  33. I’d love to enter for one of the books! We are still very early on our FIRE journey. This is the start of year 2 for us. I love seeing you share your real and detailed expenses and earnings. Even little dips in the market can be discouraging in the beginning.

    1. I used to fret over losing several thousand dollars a lot more than I think about losing $50-100,000 these days. Eventually you gain the right perspective and mindset to weather these storms just fine.

  34. Thanks for the update Justin!!! In the spirit of frugality and good decisions, please enter me for the book drawing. I was just listening to Liz on a podcast and I am eager to read her book. Thanks for all the feedback last month!!

  35. Please include me in the drawing for the free book!

    2018 has been a bit of a rollercoaster for me stock market wise. I gained and lost about 100k (unrealized) with my cannabis investments. Looks like after a sideways month in February, we’re beginning to pick up speed to full legalization this summer in Canada.

    The next few months should be quite interesting to be a part of!

  36. Nice write up Justin! You mentioned in another comment the process to decide what investments go into which vehicle (traditional IRA, Roth IRA, brokerage). Do you have a breakdown for that decision tree? Apologies if you’ve already posted about that topic. Thanks!

    1. No, don’t think I have anything handy. I’ve seen some good discussion/guidelines at Bogleheads.org. Basically I like fixed income in trad. IRA. High growth stuff in Roth. Taxable brokerage acct good for high growth tax efficient stuff (think SP500 index fund with qualified dividends and zero cap gains).

    2. The Bogleheads wiki has some good information about where to put various asset classes to maximize tax efficiency, but some of it is dead wrong. For instance, while REITs are not as tax efficient as stock index funds, they are much more efficient than bond funds, especially since the new tax law shelters 20% of the dividends produced by them. Also, bonds should go in taxable accounts if you don’t have enough space to have everything in tax-advantaged accounts. The link below to White Coat Investor demonstrates why.


      And yes Justin, I’d love to read the Frugalwoods book!

      1. I’ll have to say I disagree with the conclusion you’ve drawn re: bonds in taxable vs tax-advantaged. It seems the WCI article you cite analyzes Roth vs taxable but doesn’t consider tax-deferred space at all. And virtually everyone has tax deferred space right? Either in trad 401k or trad IRA (assuming you don’t earn a ton). Maybe WCI advice is good for very high income individuals (his target audience, admittedly 🙂 ) but not necessarily generally relevant.

        Consider that many people will pay 0% LT Cap gains on equities when they sell them. You can live on six figures and still stay within 0% LTCGs because part of your living expenses you pull each year is return of basis, and couple that with strategic Roth IRA withdrawals and you can manage your income to optimize taxes and stay within 0% LTCG bracket.

        Using a rough parallel to WCI’s analysis:
        $100k in stocks and $100k in bonds. I’ll assume 7% return on stocks (5% cap appreciation + 2% div yield). 15% tax rate on qualified dividends.
        Bonds return 3% in IRA (Vanguard Total Bond Market Index yielding 2.97% right now) and 2.25% in taxable (tax exempt vanguard fund yielding 2.24% right now).

        Stocks in taxable; bonds in IRA scenario:
        Taxable stocks of $100k at 6.7% after tax yield equals 699,733 at 30 years ($271,352 basis, $428,381 CG from a quick approximation). IRA with 100k of bonds becomes $242,726 in 30 years. Total = $942,460

        Bonds in taxable; stocks in IRA scenario:
        Taxable bonds of $100k at 2.25% after tax yield equals $194,939 at 30 years. IRA with 100k of stocks becomes $761,226 in 30 years (when withdrawn, all taxed as ordinary income). Total = $956,165 ($13,705 more before considering taxes upon withdrawal).

        Retire and pull 1/10th out of the mix in equal parts.

        “Stocks in Taxable” gives you $94,246 income ($27,135 basis + $42,838 CG + $24,272 IRA withdrawal). Fed tax for married filing jointly = approximately zero yielding $94,000 after tax income.

        “Stocks in trad IRA” gives you $95,616 income ($19,493 basis + $0 CG + $76,122 IRA withdrawal). Fed tax for married filing jointly = $5,874.
        “Stocks in trad IRA” yields approximately $90,000 after tax income.

        To summarize, stocks in taxable gives $94,000 after tax income while stocks in IRA yields only $90,000 after tax income (a loss of $4000/yr due to suboptimal tax planning). Compounding this shortfall is the tax inefficiency of “stocks in trad IRA” scenario when it comes to ACA subsidies. Under “stocks in taxable” you’ll be right at 400% of FPL and be close to falling over the cliff but still able to finesse your AGI to come in just under 400% of FPL. Not much chance of that with “stocks in trad IRA” scenario (at least not for more than 2-3 years). Falling over the subsidy cliff will cost $10k+ in lost premium tax credits for the typical 50-something or early 60-something retiree.

        Conclusion: stick your stocks in your taxable account and bonds in trad IRA or pay an extra $4000 to $14000+ in taxes each year. This is of course a quick analysis based on something approaching a reasonable tax situation for your average upper middle class earner (and not necessarily doctors earning $300-500k+, possibly for each spouse). YMMV of course 🙂

        Edited to add: by putting stocks in traditional IRAs, you’re effectively robbing them of those sweet low tax rate cap gains and converting all those gains to ordinary income. Intuitively I knew it was better to put stocks in taxable and low-return tax inefficient bonds in trad. IRA but glad I have the numbers to back it up.

  37. I always enjoy your updates! Would like more info on travel point churning, as that’s something we need to learn to do! Please enter me in the book drawing, thanks.

  38. 1999 taught me not to get too excited over monthly gains or losses in the stock market. Lost 87K in my primary brokerage account last month. The last 6 months are really reminding me of the late 1990s.

    Please enter me in the raffle of Frugalwoods book.

    1. I was planning on 30-40% annual returns back in 1999 so I know exactly what you mean. 🙂 Fortunately all the money I lost back then taught me a good lesson about risk that I’ll never forget.

      1. MERJ – Since I have a pension I’m pretty agressive for a not-very-early retiree: 70% Domestic Stock; 20% Foreign Stock; 9% zero coupon muni bonds. I also have cash generating rental real estate.

  39. Love your blog, Justin! You guys are rocking this! Hope I get lucky to win the Frugalwoods book, another favorite blog i look forward to every week.

  40. Thanks for the introduction to Mrs. Frugalwoods would love to enter the contest.
    Also the tip about microwaves, I’m a fan of my fingers

  41. Love your monthly updates. Being outside all day in the spring is what I look forward to the most!

    Please enter me in the book drawing.

  42. I would like to enter the drawing for a copy of the Frugalwoods new book, thanks!

    Bojangles?! I am absolutely jealous. None of that greasy, amazing deliciousness out West. Sigh.

    You’re still rockin’ your expenses, and your net worth is still solid, in spite of the vagaries of the stock market last month.

  43. I’m wondering how your net worth was down 2.75% when you are 90% equities? I ask because I saw a 2.8% decline in my net worth with a much higher allocation to bonds.

        1. I’m over here racking my brain trying to figure out why I’m such a masterful investor. Turns out it’s the denominator we need to look at 🙂 Take out $175,000 in bonds/cash/CDs and $170k house value and I’m at roughly $1,710,000 invested in the market. Assuming all my NW drop is due to stock market decline, that gives me a -3.4% return for February, which roughly matches the broad market index returns. I measure Feb 28 2018 NW vs Jan 31 2018 NW to determine the loss, so maybe there’s a 1 day difference in comparison vs benchmarks, too? Eh close enough for me, and it’ll catch up next month if it’s off by a day.

  44. Your monthly financial updates are always interesting.

    Also, I’d like to be entered to win the Frugalwoods book.

  45. Conservative 90% equities and 10% fixed ?
    You’ll probably see your portfolio crashing 500k then you’ll start worrying. good luck

    1. It would take more than $500k lost in a crash to make me worry. Maybe a million and I’d start feeling the heat (as in, thinking I might need to think about changing plans within a few years if conditions don’t improve).

        1. The way I figure it is that even with a $500k loss I’m still sitting on 1.4-1.5 million which would last us 40 years at the rate we’re currently spending it, even assuming zero real growth going forward.

          1. I do like how you put things in perspective. We lost 80K in Feb (2.8% of portfolio) and it was anxiety for few days. But we are like you guys – live below the means and invest wisely. Except we are a bit older 48 and 52. Besides we have all been talking about a ‘market correction’ for a while and we got it. Have to learn not to panic. Thank you for your posts. Enjoy reading them.

            1. I figure I’ll lose $50-80k in a month about 1-2x per year. That means close to a hundred times during the rest of my life! I better be comfortable with that or find some other way to invest my money, right? 🙂

            2. Justin, I’d love to hear about other ways of investing without having to suffer so much. I mean, I work 12 hours a day and I drive an Uber at night to put money in my investment accounts which is wiped out like that…It’s just terrible psychologically….I mean I could be sleeping 7 hours at night and not 3…

            3. Richard, if you are handy, consider short term real estate notes. Many folks with mechanical skills do well do to understanding what is wrong with stuff and what it takes to fix. You can make a good return, select the investment, control the risk and have a hard asset backing the investment.

  46. Reading about your trip to Wild Cook’s Indian Grill reminds me of the days of India Mahal – former gas station turned award-winning restaurant, and where I learned to love chicken saag.

    I am envious of your low internet spending. Do you have a script you work through when negotiating a better deal? Are you with Spectrum or someone else? Spectrum is the only option at our address. Sucks.

    Please enter me for the book drawing – thanks!

    1. Too funny – that’s probably because Wild Cook’s IS India Mahal. 🙂 Same old building – we ate there today and I was wondering what the building used to be decades ago. We visited several times many years ago when it was operating as India Mahal. Pretty good food still! I think they have new owners. Classic joint, hope they stay open forever.

      I found a “low income” package for those with kids in North Carolina. I think it’s a local deal as I had to wait for it to be available here. Might be worth a call to Spectrum to see if you qualify if your income is low-ish. Had to fill out some forms I recall.

  47. ** Please enter me in the book draw ** Your blog is really interesting to read and I wished I had found these types of things years ago. I love budgeting myself although I do wish we had more cash flow. Being a single parent with 2 kids we basically have money for bills, food and petrol and $10 a week for a coffee outing. We don’t go out to any restaurants as there are no funds for that however we had one night out at a burger restaurant because we had a “free meal voucher”.

  48. “Maybe we’ll spend the summer somewhere cheap like Mexico instead of Europe to help cope in the event of an economic downturn.”

    We have a saying. “If shit hits the fan, we’re going to Thailand.” 🙂

    Congrats on another great month! It’s nice to have your portfolio grown so much that dips doesn’t really matter much anymore. We’re in the same boat. Also, yield is awesome during times like this!

    Btw, that Indian food in the picture looks SO good.

  49. I want to enter the drawing. Also super jealous of you. Loving the European vacation series. Was just describing all your awesomeness to my husband this morning. We have 3 kids like you. And two careers. While our net worth is higher than yours I’m still paying off a military service “debt” is freedom is still several years away. Until then, I’ll keep living vicariously through your adventures!!

  50. Hi Justin! Enjoy following your family on the early retirement journey! Our family of three just started on the path three years ago and we look forward to the day when we can also enjoy the FI life – havng more time to spend with each other and doing things we love! I’d like to enter the drawing for a copy of the Frugalwoods please! Thanks!

  51. Hi there, would love to be entered into the drawing to win the Frugalwoods book, thanks for the opportunity! Great job with your post and all the information. Like everyone else, our numbers were down for February following the market, but not a surprise. Best wishes for continued success this year!

  52. Great financial update. I look forward to your financial monthly updates each month. Your networth inspires me to catch up to you. Please put me in the Frugalwoods book drawing.
    Thank you.

  53. Justin,

    Thanks for another great post. I love the monthly updates. I like seeing someone else’s numbers and knowing its not just me going through the ups and downs.

    *Please enter me in the drawing for Liz’s book.*

  54. Thanks again for the posting! We are selling our house in a couple of months and will have about $275k to do something with. Currently about 98% in equities (VTI). Choices, choices. Thanks again and please enter me in the drawing..

      1. Well, we have annual expenses of approx $70k and have passive income of $50k. So, our yearly pull would need to be a little less than 2%. We are both 55 and retired…. am thinking of adding a big chunk of that into more VTI,…..but if you have ideas of what to do with the rest, that would be appreciated!! : )

  55. Please add me to the contest for the book. I love to read – your blog has been helpful in our travels and I love to read about your travels. Wish we had done the same when our kids were young!

  56. Great blog! I look forward to reading it, especially the end-of-the-month financial updates. Please enter my name for the book (though, honestly, I never win anything!)

  57. I’d love to read Liz’s book.

    2018 has been interesting so far. There has not been one standard week in it yet. The gig life will do that to you. I was definitely operating at a loss since I had major dental work I’ve been paying off. Now I have a life insurance pay out that will re-set part of the losses for the year.

    Strange times.

  58. Please enter me in that drawing. I just heard her interview on the MadFientist podcast! I have reached my FI number while financially supporting my aging Father. I’m still working, probably another year to top off the portfolio. Thank you for all that you do for the FIRE community. DH from the Oregon Coast.

  59. I always enjoy your updates. Looks nice in your neck of the woods. Speaking of woods, I would love to be entered to win Frugalwood’s book!

  60. I’m just here for the book!!

    Kidding! I’m usually just a lurker 😉 Thanks for another great update! So nice to see people who are happy and content during these kinds of market fluctuations.

  61. Hi Justin, nice post, thanks! I noticed that most of the FIRE bloggers have been quiet about the February downturn. I like to think that’s by design… that if we’re doing the right things this should feel more like a little bit of turbulence not a reason to grab the parachute. Nothing to see here! I must admit I felt a little freaked out as I’m just a couple of months away from transitioning to early retirement since my company is shutting the doors. I could have dropped out several months back but we’ve seen this coming so I’m just riding the last wave of pay, benefits and severance until the end. But then I realized this – I will never sell off everything at one time. Even if it was time for me to pull some money from my funds into cash at the worst possible time, our annual living expenses are under $40K so that’s the most I could ever foresee withdrawing at one time. If I had to sell that much from a 100% equity position in the S&P 500 index fund, at the absolute worst day in February, then I would have taken a $4K “loss” on that withdrawal.

    I think the problem most folks have is that they don’t have the intestinal fortitude to stomach even that kind of hit. While they feel like geniuses all the way up (though they really didn’t do anything), they feel like idiots if they withdraw at anytime unless the fund is at an all-time high. That’s market timing at its worst. To successfully navigate early retirement, I’ve come to realize that I have to get comfortable with the realities of the ups and downs… even if it means I may not always sell in an up cycle.

    Incidentally, as I write this, my portfolio is still off $68K from the high that we saw in late January, but it is up $30K since January 1 so we’ll be just fine!

    One question I have….. do you count home equity in your net worth? I’ve never been able to find the answer. I know some do and some don’t, so I’m just curious. Cheers to a marvelous spring!

    1. That’s the key – you’re only pulling ~4% out of your portfolio each year. Sure you might “lose” 10-40% in a market crash but you’re only losing it on the several years’ worth of investments you pull out during a downturn. The other 80-90% of your investments remain in the market for the long haul.

      As for home value, I include it in the net worth I report in these monthly updates but I don’t use it when thinking about the 4% rule. The impact of a paid off house is a very low housing expense.

  62. Great post as always! How do you plan to fund future major home repairs, like a new roof?

    *Please enter me in the Frugalwoods book giveaway. Thank you!

    1. Well, we just replaced the roof in 2017 so hopefully that’s not an issue for 20-30 years 🙂 But the answer is “it’s in the budget”. I have about $1500 per year dedicated to these large capital items. We also spent $9000 replacing our old siding, replacing most of the windows, and repairing the roof back in 2014 (and still managed to spend under our $40,000 budget). Just have to include these large items somehow in your budget.

      1. Thanks, great idea! I never think to budget for long-term (potential) high expenses. Back to the budget drawing board.

  63. Hi Justin! Absolutely loved the post – it’s so helpful to see real numbers from someone who is always living the FIRE life. I’m incredibly jealous of the early spring you are having in North Carolina! Up here in Minnesota, not so much. We’ll probably still be under inches of snow in May – ha!

    Also, our microwave just recently broke as well. I looked into fixing it briefly, but instead reached out to a couple friends and thankfully microwaves are an item that a lot of people have extras of! We were able to get one for free but did have to pay a $20 recycling fee to get rid of our old one.

    P.S. Please enter me in the drawing 🙂

    1. Our old microwave broke several years ago and I chickened out on trying to fix it given the risks. So I asked around and found out my sister in law had an old microwave sitting in her storage shed completely unused. That’s how we got our current microwave 🙂

  64. Please enter my name for the FREE book “Meet The Frugalwoods: Achieving Financial Independence Through Simple Living“

    thank you

  65. This stock market downturn is just a blip so far but with all the events cascading down every day it does seem “different this time”. Conventional wisdom says it never is, though.
    Please enter me for the Frugalwoods book.

  66. Hi Justin. I know you have a BS in engineering and a law degree. Do you think the law degree was helpful in achieving Financial independence or would the engineering degree alone have been enough? Thanks.

    1. I used the law degree to a small extent and it certainly helped with the writing I had to do (reports, persuasive letters, etc) and with public speaking and testifying. But overall I’d skip the law degree if I could take a do-over. 3 years of (mostly) not working and not having a salary, 3 years behind my undergrad peers when entering the workforce, plus the tuition I had to pay for 3 years.

  67. Nice job as usual. The income is good in particular.
    Our net worth decreased about $80,000. Not a big deal. Wake me up when the stock market declines 20%. It’ll be a buying opportunity then. Enjoy Spring!

    1. Joe, even now there are reasonably good deals with individual stock declines, usually the result of panic selling on the slightest negative news. A good example was DLTR this morning, down 16+%. Been waiting for that one to go on sale for awhile and my wishes came true, along with an additional nice sale of a covered call on the same stock for a solid cash premium in my pocket. Best of luck in your investing as well.

  68. Justin,

    I’ve been keeping up with y’all for probably about a year now — it’s nice to see someone living the FIRE life in a town with which I’m familiar (I have family in Garner and Cary, so I manage to make it back a couple times a year). It also doesn’t hurt that we’re both fellow Civil Engineering majors. You’ve been an inspiration; thank you.

    Having achieved my FI goal late last year, I’m now struggling with what to do next. For the first two years of my FIRE journey, it was all about accumulation and strategies to get to the goal. Now that I’ve crossed that milestone, I’m working on the transition and trying to find that something I want to “retire” to.

    Anywho, all of this is to say, I’d love to be entered into the Frugalwoods contest!


    1. Bojangles seems to be a clear favorite among people I know here. Though there’s a stretch of town where you can dine at all three within one block if you wanted to.

  69. I forget how the south gets spring 4-6 weeks earlier than the Midwest. Jealous 🙂

    Please enter me for the Frugalwoods book drawing. Thanks!

  70. I always enjoy seeing how others use gift card deals (discounts, gas points, etc), purchase rebate cards, and credit card rebates to maximize their savings. The wife and I just returned from our yearly three month sojourn to the ocean in SC, and I took so many gift cards that I purchased at Kroger’s for the gas points, as well as rebate debit cards from great deals at retailers that had already driven my purchases to almost $0, that I spent very little actual money when we were dining out and making any purchases at retail. Gotta love how much latitude we have in that regard in this great country.

    You knew the good times stock market-wise were not going to continue unabated, but it was nice while it lasted. Your attitude towards any potential downturn is exactly as it should be – we’ll deal with it when it comes. Align your assets in a way that is most comfortable to you and your situation, and things will work out.

    Please include me in the book sweepstakes. I make any such books I acquire available to others to help when needed. Thank you, sir.

  71. I love reading your monthly updates. It’s encouraging to read how well you handle your finances and enjoy life! ***Please enter me into your contest to win the book*** Thanks!

  72. Hi Justin. Thanks for another great post. One comment that I am struggling to understand with regards to your fixed income allocation:

    “With this level of fixed income investments and liquid funds, we’ll be able to wait out a five year stock market correction without needing to sell anything at a capital loss.”

    Given that most of your fixed is in retirement accounts, how do I think about that comment (since you can’t access the money). Maybe I am reading/thinking about the statement wrong. Or it is just late in the day late in the day and I’m tired from work and not thinking clearly…

    Also, please enter me in the drawing for the Frugalwoods book!

    1. I can do the flip/flop. That is, sell bonds in IRA and buy stocks with the proceeds. Then offset the trade by selling stocks in brokerage account and spending the proceeds. End result: same amount of stocks, but I’ve managed to convert the bonds into cash in my hands.

  73. Would love to be entered in the book contest! Thanks for sharing your story, looks like you guys are living the life!

    1. I’m not saying yes and I’m not saying no. It takes a ton of work to put together a polished book and I am not willing to devote that kind of effort to it right now. But who knows how I’ll feel in a few years?

  74. Justin, I’m exploring health insurance options for FIRE, especially to reduce income enough to get a subsidy, which is what you have successfully done. I’m having trouble getting clarity on HSAs in combination with ACA plans. Since most ACA plans are high-deductible, can anyone set up an HSA plan to use with those? Or are there other factors? Do you have an HSA associated with your health insurance plan?

    1. Wow, that review is pretty rough! Sounds like she doesn’t want to give up her lattes and high expense lifestyle in exchange for retiring 30 years earlier!

      But you are right – get it from the library! Liz suggests just the same (as the reviewer notes in that article).

  75. Thanks so much for all of your information. Though”early retirement” for me was at age 58 instead of 65 like most of my cohorts, I am encouraging my four children to read your blog for inspiration! And you still teach this “old dog” new tricks😀.

    A question about your travel credit cards? Do you keep any of them after the new yearly fee is due?

  76. You’ve had an amazing run in the markets with your portfolio. I started with a lower balance than you back in Feb 2016 but haven’t experienced similar gains due to letting myself get in the way. I’ve now found an investing approach which works for me and keeps my emotions out of things. I’m a prime example of why investors typically underperform the markets.

    Would love to be in the draw.

    1. Timing the market and outsmarting the market is incredibly tough. I’ve never considered myself smart enough to do either so I mostly leave the money invested (other than this recent slight shift to bonds).

  77. Always inspirational, Justin! We too experienced the $100k gut punch early in the month! Ah well, easy come easy go. We’re sitting down about $50k just like you.

    I continue to march towards my June 1 early retirement date. We’ve shifted even more than you have into fixed income. Some of it is mildly speculative but I just felt that since it didn’t affect our ability to FIRE I’d feel better about it.

    As of this writing I’ve got 85 days left. Almost time to tell the boss.

    Food looks great as always! I’m planning on hitting you up for some recipes in E.R. 🙂

  78. Hey Justin, great blog. Love the little life hacks and how you show ER is doable with 3 kids. And glad the bitcoin crash hasn’t wrecked your plans. 🙂

    (Please do add me to the Frugalwoods draw.)

    1. Fortunately I’m too tech illiterate to know how to own any bitcoins (or maybe I’m too lazy to learn how to!) so as a result I’m none the poorer post-bitcoin crash (other than stock market declines).

  79. Would love a chance at the book drawing. I also love chicken and waffles so please don’t hold that against me. Have enjoyed reading your blog over the past couple of months and have finally caught up to current ti.es.

  80. I feel you on the down market last month. February was the first month that my investments and net worth were less than the previous month since I started tracking my net work a little over a year ago. I’m not too worried about it, though, and the number that is supposed to go down – debt – went down considerable, too!

  81. Came across your website through One Big Happy Life interview! I can’t wait to read your posts and would love to be entered into the draw to win the Frugalwoods book. Thanks for sharing your story!!

  82. I have no strong opinions on chicken and waffles, lol. But I am going to chime in as the one billionth commenter to declare that it would be an awesome monthly edition to include your family’s recipes. All of your Asian recipes look really tasty and for those of us who love to buy them in restaurants but are afraid to make them at home for the first time it would really save us some restaurant trips and get us to ER faster! 🙂

    Also, I’d like an entry for the book drawing!

    1. Google/youtube is your friend 🙂 We’ve put a couple things on youtube but most of this is already out there. My advice is don’t be afraid to try these seemingly crazy/difficult dishes, because they aren’t that complicated. It’s just a different set of ingredients. Once you master a dish, it’s yours forever and you’ll know how to make it awesome in the future.

  83. I have been following your blog for a while. I am 50, home-maker wife 45, kid 7. Renting now in the northeast, but have liquid investments worth $950K ($600K taxable, $350K IRA). I only took a 2% hit in February, since I have a 70/30 split in stocks/bonds. Dreaming of moving to the Midwest and starting my own engineering consulting firm. Current salary is $150K/year. I did not think it was possible to live on 32K/year, but working through your posted budgets, I believe it is doable with a $200K house in the Midwest (950K – 200K = 750K, 4.5% of 750K = 32K/year). Plus I will collect Social Security of about 22K in another 15 years.

    Am I crazy for wanting to do this? Risks are that if my firm fails after a few years, I will not be easily able to re-enter the workforce. On the flip-side, I might not be around to collect Social Security if I continue in my high-stress 150K job 🙁 Decisions, decisions….

    1. I don’t think it’s crazy at all. Living on $32k means you pay attention to what you spend but it doesn’t have to mean you have to scrimp and save on every facet of life. 🙂 With the reasonably good SS coming in the door in another 15 years (at which point your 7 year old should be self sufficient or close to it), you’ll probably be okay in your 60’s even if you end up spending a big chunk of your $950k.

      And if you have a more enjoyable lifestyle in the meantime, that’s worth a ton too, right?

      You might be underestimating how hard it will be to re-enter the workforce somewhere at some reasonably good salary. It might never be $150k again depending on how unique your current setup is, but I’ve seen plenty of other engineers make a go at starting their own firm, or leave the practice altogether for several years eventually returning to work for someone else. You’ll build a lot of hustle skills while being your own boss, and I think those are an asset, not a liability, to future employers if you can package it and market it correctly. Who doesn’t want a producer and a self-starter on their team??

      1. “And if you have a more enjoyable lifestyle in the meantime, that’s worth a ton too, right?”

        I think that is probably the key to life, since we only get one shot at it. At the end of life, many people have regrets that they did not live up to their full potential and by then it is too late. Stress imposed by others is probably more harmful to health than self-imposed stress to meet one’s own ideals. If I wait a couple more years, I am afraid others will corner the engineering niche in renewable energy that I have identified.

        Starting my venture at all time market highs is making me nervous, but I have shifted to a more conservative 60-40 stock/bond split in my non-retirement accounts with a value factor tilt to minimize sequence of returns risk. My IRA has a 80-20 stock/bond split since anyway I cannot touch it for 10 years without penalties so might as well be more aggressive.

        What do you think of BigERNs safe withdrawal recommendation to use a 60–>100 equity glidepath when CAPE10 > 30 to maximize SWR by minimizing sequence of returns risk? Is that something you follow in both your retirement and non-retirement accounts? All the backtesting in the world cannot predict the future, so I am not sure how the strategy will perform in out-of-sample testing. Also what do you think of the tactical strategy of underweighting stocks when the leading economic indicators start turning down, as has been proposed by BigERN and a few other bloggers?

  84. The only thing odd to me about my current FI (but not ER) life is how much easier it is now to make more money (employers are extremely generous) vs. passive income (interest rates and dividends at historical lows). Stock market keeps moving up, so it’s not a consideration affecting ER yet, per se.

    In in my financial life of nice perks as being a professional diminishing over time, ACA coming in to being and then being undermined, and federal income taxes increasing then being cut – this current place is really bizarre. General global (and especially domestic) inflation seem impossible to instigate, quantitative easing and bailouts worked, and current stability has sustained all sorts of outside attacks – political, domestic unrest, unannounced tariffs / welcoming trade wars…

    Nothing seems to upset the Goldylocks scenario that increased money flows quickly to the 1% (thereby quashing inflation but providing optimism and sufficient boost to the 99% generally), productivity is hocky-sticking (more than 50% of the effective workforce use computers effectively), and the general population is sufficiently distracted by an over-saturation of personalized entertainment opportunities.

    I have no idea what happens next – could be acutely malignant and we’ve become too weak as a species to fight as we should. Could be benign, but slowly moves the course of humanity in a spiraling downward arc. Or we could be at the pinnacle of human existence – life just remains great and individuals either ‘go Musk’ and get their fulfillment on accomplishments or ‘go RoG’ / ER and comment on the going on the world around them.

    Nothing wrong with that last scenario, but it’ll begin to be a problem over the years in the other two.

    1. I’m an eternal optimist. 🙂 I think the human race will muddle through it no matter what. So I’ll vote option 3: pinnacle of human existence. Not that there aren’t positive changes we, the people, could make. But life is pretty good right now for a whole lot of people.

  85. February was a super-hectic month at work for me, so I had no time to check what impact the correction had on me and by the end of the month, after my contributions (early in the accumulation phase), I was overall positive anyway, so…yay?

    Please count me in for the Frugalwoods draw, I would love to read the book!

  86. I’m really grateful that there are such transparent FI bloggers out there – thank you for that! It helps me stay on track to see what is coming down the pipe.

    I’d love to enter the drawing. Thanks for hosting!

  87. I’m sure when you are retired, seeing the stock market drop 10% is significant and can be attention-grabbing. But sounds like you know what you are doing and will not be making any drastic moves that may negatively impact your ability to take part in future gains. Remember that if you only missed a handful of the up days in the stock market over the past decade, you would have a significantly lower return than if you had been invested in the market. Time in the market is better than timing the market! Loved reading this and looking forward to reading more in the future.

  88. Hi Justin, thank you for the post. I love reading your blog. Very happy to see your growth and Financial independence. You stated that you have shifted to a more conservative 90% equities and 10% fixed income allocation during 2017 into early 2018. You provided your breakdown for the 10% fixed income allocation, can you please provide similar detailed breakdown on the 90% equities please? Thanks and look forward to hearing from you.

  89. Good stuff Justin! The last months have been a true roller-coaster and I am glad I am thinking long term!

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