January is over and February is already half way over. It’s been a busy month here at the Root of Good house and I’ve been a total slacker when it comes to blogging. Since the start of the year we have researched, planned, and booked not one, but two (!!) big international trips (more details below). The unseasonably warm winter weather has proved quite a distraction too (in a very good way).
Financially, we had an okay month of January. Net worth declined $30,000 to end the month at $2,231,000. Income for the month remained strong at $3,270 while expenses totaled only $2,682 including a few dozen travel hacked international plane tickets.
Let’s jump into the details from last month.
Investment income totaled just $48 in January which is a marked decline from December’s $20,683 in investment income. Our equity mutual funds and ETFs pay dividends quarterly at the end of March, June, September, and December with some payments arriving at the beginning of the next month. Here’s more on our dividend investments.
Blog income, shown as “other income” in the chart, totaled $1,741 for the month which was almost exactly the same as December’s blog income.
My early retirement lifestyle consulting income (“consulting”) was $1,454 for the month of January which represents 11 hours of consulting sessions. I raised my rates in early January since I’m getting a bit busier than I want to be. However, that seemed to only increase demand so I’m clearly doing something wrong. Perhaps this is a seasonally busy period of time as people are thinking about their finances, investments, and taxes just before the big April tax filing deadline.
The “deposit income” totaled $25. The deposit income came from cash back and incentive bonuses 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.
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 January expenses:
In total, we spent $2,682 during January which is about $600 less than our target spending of $3,333 per month (or $40,000 per year). Travel and groceries topped the spending categories for the month.
Detailed breakdown of spending:
Travel – $1,366:
Almost all of January’s travel expense comes from booking the flights for our big two month summer trip to South America. We spent $1,265 for eight sets of tickets for the five of us between these cities:
- Panama City, Panama (<– technically in “Central America” but I’m calling this a “South America” trip)
- Lima, Peru
- Santiago, Chile
- Cordoba, Argentina
- Buenos Aires, Argentina
- Iguazu Falls, Argentina (and Brazil)
- Sao Paulo, Brazil
- Miami, Florida
We have a week or two in most of those cities in South America. After completing our journey in South America we’ll return to Miami where we depart for a cruise in the Caribbean, then return home to Raleigh.
Most of the flights were booked with frequent flyer points but the international taxes on those frequent flyer bookings were significant. In some cases, we paid full price for flights on discount airlines since the cost wasn’t much more than the taxes on “free” frequent flyer tickets. We saved the points/miles in that case.
All together we paid 337,500 United or British Airways miles for five flight segments plus $795 in taxes. The other three flight segments were $720 total cash price (no miles/points required). These costs were partially offset by a $250 annual travel reimbursement credit from the Citi Prestige card, resulting in a net cost of $1,265 plus 337,500 frequent flyer miles for all of our flights for this summer’s vacation.
We also booked all but one of our Airbnbs in South America during January (or very early February). We didn’t have to pay anything out of pocket in January. I have accumulated several thousand dollars in airbnb gift cards over the past year or two and used those (plus some referral credit from you readers signing up for airbnb!) to cover our weekly apartment rentals in South America. I’m almost out of gift card credit now, so the one remaining week that we need to book in Cordoba, Argentina may have a small out of pocket cost to it.
If you are interested in booking a place through Airbnb, feel free to use my Airbnb referral link to save $40 off your first stay.
The other travel expenses include a $95 annual fee on the Chase Ink Business Preferred card. This card offers 80,000 bonus points worth $1,000+ in travel. The Chase Ink Business Preferred card is still available for sign up if you are interested.
The remaining $6 in travel expense came from the $6 convenience fee for paying our $300 quarterly state tax bill with a credit card. Diverting as much spending as possible onto our credit cards to maximize our credit card rewards is a key part of our strategy to get a lot of free travel every year.
If you want to score more free travel from credit cards, there are several other 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.
Groceries – $547:
We spent $547 on groceries during January. This is a pretty average level of grocery spending for us.
Here are a few related articles on how we shop for groceries without using coupons. And how we avoid Costco because it’s way more expensive than closer, more convenient, and better alternatives like Walmart, Aldi, and Lidl.
Taxes – $300:
Our quarterly estimated state taxes are $300. We have already paid the full federal estimated taxes in previous months of 2019 so we didn’t owe anything to the feds for quarter four.
Utilities – $178:
The city water, sewer, and trash bill was $77 for January (after redeeming a $50 free gift card from our new health insurance company).
The natural gas bill (for the water heater and furnace) totaled $101 for the month. January has been shockingly warm so we haven’t used the heat as much as a typical January.
Several months ago I prepaid $600 on the electricity bill to hit the minimum spending requirement on a credit card. As a result, January utility charges didn’t include electric. However, the credit balance ran out in February so next month’s expense report will show another $600 lump sum charge. I charge a big chunk on the electricity bill at one time since the electric utility charges a flat fee to use a credit card.
Healthcare/Medical – $152:
Our 2020 healthcare premiums are $123 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income. The benefit of being “poor” on our tax return.
In other healthcare expenses, we spent $9 at Amazon for various over the counter medicines bought in bulk.
The remaining $19 in medical expense is my monthly dental insurance premiums for 2020.
Restaurants – $77:
We dined out quite a bit in January. Our big family outing was the neighborhood Chinese restaurant for $52.
I also met a friend for lunch at the neighborhood taqueria for $11 including a generous tip.
We spent $3 at Moe’s for me and Mrs. Root of Good when they offered a $5 off anything promotion.
In other near-free food purchases, we spent $6 at Wendy’s. During December Wendy’s ran a contest where you win a food or drink item each day through their app. Throughout January we redeemed a ton of coupons for free food, drinks, and frosties. We also redeemed six coupons that required a purchase ($1 times 6 purchases).
Chick Fil A is another source of free restaurant eats. Every time the Carolina Hurricanes win a home game, we each get a free chicken sandwich. Plus Chick Fil A randomly doles out free sandwiches through their app. Mrs. Root of Good loves Chick Fil A. For me, it’s a nice excuse to make the four mile round trip on my bike to the restaurant to grab the sandwiches.
The remaining $6 in restaurant spending was a slice of pizza at a Carolina Hurricanes NHL hockey game. Our son earned two free tickets to watch them play through a reading competition at school. It was a fun father-son outing but I don’t think either one of us were converted into hockey fans.
Gasoline – $38:
A tank of gas for the minivan.
Cable/Satellite – $18:
We pay $18 per month for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.
Home Maintenance – $8:
Over the past year, our dishwasher grew progressively worse at cleaning the dishes. In January, I decided to spend an afternoon tearing our dishwasher apart and deep cleaning everything. In the process I discovered that it was really gunked up with old dishwasher detergent deposits and possibly the “dissolvable” plastic wrappers from the detergent tablets.
I have added “tear apart dishwasher and thoroughly clean” as an annual routine maintenance item in future years (Google Calendar recurring events = my friend).
I also located a broken part while cleaning the dishwasher. The grinder blade that chops up larger chunks of food came loose from the motor somehow and had worn the base of the grinder blade away. I bought a new grinder blade for $8 and easily replaced it.
The deep cleaning and part replacement did the job. The dishwasher works like it’s brand new!
Summary of annual spending from all previous years of early retirement:
Net Worth: $2,231,000 (-$30,000)
Two steps forward, one step back. That seems to be the wealth dance lately. We’ve had many months of mostly positive net worth increases as the stock market went up. January led to a slight decline (that has been erased in the first half of February as I write this).
The market feels overly optimistic since it seems like nothing makes the market waver for long. Not an almost-war with Iran and not a major virus outbreak in China. At least not yet.
Our net worth dropped $30,000 to bring us to $2,231,000 by the end of January. This is still almost twice as much as we had when I left the working world way back in 2013. So we feel pretty wealthy.
Given our fairly low average annual spending around $31,000, we could get by on a portfolio half the size of what we have and still only spend 3% of the principal balance each year. From a portfolio health perspective, we have nothing to worry about financially.
In fact, we continue our quest to spend more money. In February we booked another big vacation for later in the year. This time, it’s just me and Mrs. Root of Good flying to Madrid for a two week road trip through the northern and central parts of Spain. It should be a fun and low key trip.
That’s it for this month’s edition of the early retirement journeys of the Root of Good household. Until next time!
Are you ready for winter to be over? Looking forward to big things in spring and summer?
Root of Good Recommends:
- Personal Capital* - It's the best FREE way to track your spending, income, and entire investment portfolio all in one place. Did I mention it's FREE?
- Free Travel* - We score $10,000 worth of free travel every year from credit card sign up bonuses. Get your free travel, too.
- Save more on travel with Airbnb and take $40 off your first stay*. We usually get apartments with 2-3 bedrooms plus a kitchen and living room for less than the price of 1 hotel room. Save even more with weekly and monthly discounts.
- Use a shopping portal like Ebates* and save more on everything you buy online. Get a $10 bonus* when you sign up now.
- $20 off Uber* and Lyft* for new customers (our preferred rideshare apps when traveling)
- Google Fi* - Use the link and save $20 on unlimited calls and texts for US cell service plus 200+ countries of free international coverage. Only $20 per month plus $10 per GB data.