Ok folks, it’s June and the year is almost half over. Where does all the time go?
May was another busy but fun month for us. We celebrated some birthdays with family. We went on a cruise. Our kids have finished another successful year of school. And next week we watch our oldest kid graduate from high school!
Meanwhile, we are researching and planning the final details for our big eight week summer vacation in Europe. In a week, we will get on a plane and head off to Zagreb, Croatia where the adventure begins once again. Busy, busy, busy!
Financially, May was a great month for us. Our net worth rebounded by $103,000 to end the month at $2,770,000. Income during the month totaled $4,718 while expenses were $2,972 during May.
Let’s jump into the details from last month.
Investment income totaled $339 in May. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. As a result, we had a smaller amount of investment income last month. Here’s more on our dividend investments.
Blog income totaled $1,012 for the month. A pretty ordinary month for blog income.
My early retirement lifestyle consulting income (“consulting”) was $912 in May. These earnings came from 5.5 hours of consulting work during the month.
Tradeline sales income totaled $175 in May. This is lower than the past couple of months but still a nice chunk of change for minimal effort. I ramped up my tradeline sales in 2020 and discussed it in a bit more detail in my October 2020 monthly post and in my July 2021 monthly post.
For May, my “deposit income” totaled $75. This income comes from cash back and incentive bonuses from the Rakuten.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 Rakuten through this link and make a qualifying $25 purchase through Rakuten, you’ll get a $10 sign up bonus.
My Youtube earnings payout was $175 during May. Youtube only pays out when you exceed $100 in accumulated revenue. Recently, my youtube earnings have been just under $100 per month on average, so I’ll be getting paid a bit under $200 every two months.
Here is the Youtube channel for the curious. It’s random travel videos, birds, kids, and a couple of DIY videos. There are only a few main videos that bring in most of the traffic (and revenue!).
The final $2,028 of income for May comes in the form of some bank account and brokerage bonuses. Mrs. Root of Good signed up for a US Bank Leverage Business credit card and cashed out $850 in rewards from this new card. Of that total, $750 came from the sign up bonus and the other $100 came from points earned while meeting the $7,500 minimum spending requirement.
I also cashed out $1,178 in rewards from our new Capital One Venture X credit card. $1,000 of that total came from referring four other people to the credit 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 May expenses:
In total, we spent $2,972 during May which is about $400 less than our regularly budgeted $3,333 per month (or $40,000 per year). Travel and Insurance were the top two spending categories for last month.
Detailed breakdown of spending:
Travel – $1,319:
More travel spending! We spent $175 for gas and parking for our May cruise out of Charleston, South Carolina.
We also booked another cruise for October 2022. It’s actually 2 cruises back to back. So we had to make 2 sets of non-refundable deposits of $50 per person (or $50 x 2 x 2 = $200 total). We’ll pay the remaining balance of $750 or so in July.
The remaining $945 in travel spending was for the purchase of $1,025 in Airbnb gift cards. I used most of these gift cards to pay for the remaining balance on one of our airbnbs we booked in Europe for this summer’s trip.
If you are interested in getting free travel from your credit card like I do, consider the Chase Sapphire Preferred card (my referral link). Right now, for a limited time, the Sapphire Preferred card offers 80,000 Chase Ultimate Rewards points that can be used to book $1,000 worth of travel. Or transfer the points to a ton of different airline frequent flyer programs and book a free trip to Europe (with enough points left over for a free round trip within the USA)! Or cash out the points for an $800 check and buy whatever you want! The card also has a lot of nice travel benefits as well.
Insurance – $1,008:
Our annual homeowner’s insurance of $774 came due in May. The auto insurance bill also showed up last month. It covers six months of premiums and totals $233 for the two of us. We’ll be adding our daughter in the fall when we get back from Europe so the cost will increase significantly. We’ve been warned it’s going to be about $900 per year in addition to our current premiums.
Groceries – $300:
We only spent $300 on groceries last month thanks to a few factors. We are keeping our grocery shopping to a minimum as we try to deplete our fridge, freezer, and pantry of as much as possible before we leave for the summer. “Shop the fridge” is the new saying for what we’re doing.
During May, we spent several hundred dollars in Walmart gift cards acquired in previous months. Some of these gift cards were reflected in past months’ grocery spending. However, I also received a big chunk of free walmart gift cards from a cash back site that I use.
Our grocery spending will be higher in 2022 than in previous years. Inflation is the main culprit.
An example is the ingredient list for our homemade pizzas:
- 2x pizza dough: was $1.00, now $1.50 (+50%)
- 2.5x 1lb whole milk mozzarella cheese: was $1.43, now $3.74 (+162%)
- 0.5x jar spaghetti sauce: was $0.88, now $1.40 (+59%)
- 1 package pre-cooked sausage: was $0.79, now $1.29 (+63%)
- 1 bag sliced pepperoni: was $2.26, now $2.58 (+14%)
This makes 4 big rectangular thin crust pizzas. The cost per pizza is still very cheap for nice quality homemade pizza at about $4 per pizza. But in percentage terms, almost all the ingredients have zoomed up in price by 50% or more in the past couple of months.
I am blessed/cursed with knowing the price of basically all the groceries we buy almost to the penny. So I’m very conscious of the price hikes.
Fortunately, we can afford a 20-50% bump in grocery prices so we really haven’t changed a lot in terms of consumption.
Utilities – $280:
The total utility spending was $280 last month.
We spent $81 on the electric bill and $151 for the water/sewer/trash bill. The natural gas bill, which provides heating and hot water, totaled $48 for last month.
Air conditioning season is here, so our electricity usage is ramping up. However, we won’t be here most of the summer cooling season, so our utility bills should be very low throughout the rest of summer once we go out of town.
Healthcare/Medical/Dental – $40:
Our current 2022 health insurance is completely free thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$45,000 per year Adjusted Gross Income.
The “American Rescue Plan Act” passed in March 2021 makes the Affordable Care Act premiums even cheaper through 2022. Households with modified adjusted gross incomes (MAGI) below 150% of the federal poverty level get select silver-level health insurance plans completely free.
For the adults in the household, we spend $20 per month ($240 per year) for a basic dental insurance plan for each of us (or $40 per month in total). Our routine dental exams and cleanings with the occasional x-ray have increased in price recently. The cost is now $125 (no x-ray) or $170 (with x-ray).
With two routine visits per year, we will spend almost $300 per person. A $240 insurance plan provides those same services for free. And we get some minimal level of insurance if one of us needs a filling during the year.
Clothing/Shoes – $23:
We bought water shoes for the family.
This summer, we’ll be at the beach on the Adriatic sea. And playing in the rivers and lakes in Slovenia. Most of these beaches, riverbanks, and lake shores are filled with rocks instead of nice smooth sand. Hence the need for water shoes.
Restaurants – $5:
Paypal had a deal where you buy a $10 of Starbucks gift card reload and get $5 cash back. So I did it.
I go to Starbucks a few times per year to meet up with people, so this is basically the cost to rent a seat and drink their $3 cups of drip coffee for a couple hours at a time.
Cable/Satellite/Internet – $0:
We generally 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. Right now the cost of the internet service is temporarily reduced to $0 due to the “Affordable Connectivity Program”.
Gas – $0:
We bought about one full tank of gas in May but it was used almost exclusively for our road trip to Charleston, South Carolina for the cruise. I included the $70 in gas expense in the “travel” category for this month’s spending report.
Total Year-To-Date Spending for 2022
Our spending totaled $13,376 for the first five months of 2022. This is about $3,000 less than the $16,667 we budgeted for five months of spending in our $40,000 annual early retirement budget.
A paid off house and a paid off car keep our basic living expenses very low. This means we have the financial flexibility to afford little luxuries like booking several cruises and spending the summer in Europe while still keeping our overall spending low.
And in June we will pay over $1,000 for a rental car for 5+ weeks this summer.
In August when we return home from our summer trip, we will hopefully be able to purchase an additional car. Used car prices are finally starting to drop since February. I hope car prices continue that downward trend all summer so we won’t be paying $10,000 for a 15 year old Ford Escort.
Our oldest kid starts full time community college in the fall. It’s looking like financial aid will cover the entire cost and cover all the books too. So we shouldn’t have to dip into the 529 plan too much.
Monthly Expense Summary for 2022:
- January – $1,193
- February – $2,535
- March – $5,356
- April – $1,321
- May – $2,972
Summary of annual spending from all years of early retirement:
- 2014 – $34,352
- 2015 – $23,802
- 2016 – $38,991
- 2017 – $31,708
- 2018 – $29,058
- 2019 – $25,630
- 2020 – $28,466
- 2021 – $31,740
- 2022 – $13,376 (year to date)
Net Worth: $2,770,000 (+$103,000)
In April, we had a six figure drop in our net worth. May proved to be a much kinder month for us. Our Net Worth skyrocketed by $103,000 to end the month at $2,770,000.
These wild fluctuations don’t bother me a bit. It’s a nice form of “exposure therapy”. Consider a 1% change in a ~$2.5 million investment portfolio. That’s $25,000. And consider that a 1% move in one day is somewhat common. A big day is a 2% or 3% change. So I’ve grown accustomed to watching the portfolio swing $25,000, $50,000 or even $75,000 in value in a single day.
If I happen to check on the value, that is. Some days I do and some days I don’t.
Day to day, it’s just numbers on a screen. In fact, year to year it’s still just numbers on a screen.
Our withdrawal rate is under 3% of our portfolio now. That means we won’t even need to touch 97% of our portfolio for over a year. A lot can happen in a year, so why worry about it today?
For the curious, our net worth reported above includes our home value (which is fully paid off). However, please note that I don’t consider my home value as part of my portfolio for “4% rule” calculation purposes. I realize folks ask me about that every month so I just wanted to state that here for clarity.
I just returned from CampFI Midatlantic. It’s a 4 day, 3 night retreat where 70 or 80 FIRE-minded folks gather to discuss money, FIRE, and life.
I’ve been a presenter at all four of the Midatlantic CampFI’s since its inception in 2018 (2020 didn’t happen because of the ‘rona!). Each year I am amazed at all the clever, persistent folks seeking various forms of financial independence and eventually retiring early.
This year was no different! I had a chance to talk to low income earners, high income earners, family-oriented households, and some folks that live a nomadic lifestyle that makes our long summer vacations look like a short weekend getaway.
It’s always inspirational to see how other folks are making their dreams come true. And a nice feeling to think I’ve helped play a small part in helping other people plan and invest for the future.
Well folks, that’s it for this month! I’ll be busy traipsing about Eastern Europe in June and July, but I should be posting next month’s update roughly on schedule in the first half of July. Until then, take care!
Summer is here! What’s up in your life?
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Another great month! Wanted to add a comment on tradelines. Last year I made close to 4k doing tradeline sales on 2 of my credit cards. January of this year one of those cards was closed due to “irregular” authorized user activity. Unfortunately it was my oldest card (15 years) so the average age of my accounts has been adversely lowered. It was still worth the money I made off of it and I would do it again, just mentioning that this is a possible consequence.
Yes, certainly a risk! How much did your credit score drop after that 15 yr old card was closed? Are you still able to get new cards?
It really didn’t drop, hanging in the mid 820’s before and after the cancellation…I was surprised since average length of accounts is supposedly a big factor.
Good to hear! I am always surprised at how little our scores drop after we apply for all these cards, cancel a lot, etc
Was it a chase card?
no, bank of america
Have fun on your 2 month vacation through Europe. I look forward to that style of vacationing eventually. Our vacations used to be 1 week trips, and now, I’ve been working more toward 10+ night trips. Allows for more relaxation while vacationing. Headed to Seattle for 5 nights, then over to Yellowstone for 5 later this month. Should allow for a decent emersion into both places, I hope.
Enjoy Yellowstone! Yes, 5 days should give you a lot of time to enjoy the highlights of the park. It’s huge so I’m sure you’ll have to pick and choose what you see/do but we saw most of it in a very very busy 3 days.
Love the Bahama waters! And congrats on the oldest graduating HS. That was fast. Where is she off to?
I just did some remodeling for one of my rentals in May by building a deck and changing out some dry rot. Whoo hoo!
Oh, and marketing my upcoming book, Buy This, Not That. Now that is a lot of work. Don’t think I’ll write another!
Oldest kid is doing community college for ~1.5 years for an associates, then transfer to state university for a business degree. That’s the plan anyway!
congrats on the book! That is a ton of work I bet.
When you apply for a credit card with bonus points, use the points, then cancel the card, how quickly can you reapply for the card and receive bonus points?
I usually wait a year from one application to the next application (Chase Ink cards, for example). Some cards tell you straight up, minimum 24 months between getting new cards, or must wait 24/48 months or whatever from the date you get your bonus until you’re eligible to get a new bonus (like the Chase Sapphire cards).
In April, we had a six figure drop in our net worth. May proved to be a much kinder month for us. Our Net Worth skyrocketed by $103,000 to end the month at $2,770,000.
What is your allocation? 60/40?
I assume most if not all of that is in ETFs.
What specific equity and bond funds do you currently hold?
90/10 stocks/bonds, yes almost all ETFs (with the rest being mutual funds plus a couple of individual stocks for various reasons)
There’s an asset allocation table in this article.
Considering the market is basically flat during May 2022, it is hard to believe that your net worth skyrocketed by $103,000. Are you doing day trading during this month?
SP500 is flat, but I only have 11% invested in SP500 🙂 I checked at month end, and all my asset classes except real estate (also 11% allocation) outperformed the SP500 in May. There’s also my house that WAY outperformed SP500 in May. And probably some accounts updating weirdly where they may not have updated exactly on the last day of April (sometimes Personal Capital is wonky like that and it takes a day or two to reconnect and update accounts).
That is what got Donald Trump in trouble in New York.
Real estate? Or accounts updating slowly?
One of the highlights of this post might be the impressive use of the law school casebook (still tabbed!) to lift the dish washer. I’m often looking for ways to repurpose mine. Congrats on another solid month. Safe travels.
That must have been one of my wife’s casebooks since it’s tabbed so well. I’m not sure if I ever spent much time with a lot of my casebooks!
It provided just enough lift to give me some access to the parts underneath the dishwasher without needing to disconnect everything.
We’re lucky that we don’t need to consume much, but inflation is definitely noticeable at the pump and in the grocery store. It seems like last year’s regular prices are roughly comparable to this year’s coupon prices. So it goes.
Homemade pizza is the best! I usually handle our cooking but I’m a sous-chef at best (pretty much just slicing pepperoni and gathering ingredients) when my wife decides it’s pizza night. Three 12″ pies require just a couple cups of flour, trace amounts of yeast and salt, and an overnight to let the dough rise; I realize your bag-o’-dough was used as an example and isn’t seriously hurting the pocketbook, but it’s nice to have the option.
I have tried and tried with the homemade from scratch dough and never ended up with anything great. The formerly $1 bags of pizza dough are a nice shortcut. No kneeding, no mixing, just pop the dough onto some flour on the countertop and form the dough into perfect pizzas every time. The slight extra cost vs making from scratch is worth it given our lack of dough-making skillz! 🙂
I hear you. Trader Joe’s bags of dough were what got us into making it in the first place, back in the day; if my wife didn’t have the touch I don’t doubt we’d still be doing it that way.
Man, now I want pizza… 😀
Where do you get the dough?
Walmart. Also bought similar “dough in a bag” from the local grocery store when it’s buy one get one free ($1 after discount). These pre-made doughs work so much better than the stuff we’ve made from scratch.
Going to disneyworld later this month and vegas for a tournament. We’ll also do a quick big bear trip with the family. I agree, longer vacations are nicer than weekend get aways. The amount of travel and hassle isn’t worth it. Hope in 2023 we will be back to doing 4-5 week visits back to NE Asia.
Nice busy summer! Safe travels!
I’m so jealous of car insurance costs for teens! I’ve heard it’s $300 or so a MONTH here in the Atlanta metro. We’re planning to wait until our 16 year old son is closer to 18 to get his license. His school and work are just 1.25 miles away.
Did you get the cheapest Walmart water shoes? The last time we all purchased water shoes they were $25 each (Costco in HI).
We tried on different brands at Walmart. Some of us got the cheaper ones and others got more expensive ones (depending on what was most comfortable and fit best). I think we also bought 2 out of 5 of them using a gift card that we bought in April, so that cost wasn’t reflected here. All the shoes were $6 to $12 from what I recall. I find Costco to be pretty expensive overall, so that may be why there is a big price discrepancy. Our walmart shoes might also fall apart, we’ll see! 🙂
I want to start using travel reward credit cards but was initially denied for the Chase Sapphire Card. At this time, we only have a United card for miles, and we moved away from a United hub. Do you suggestions for reporting income when applying for cards once you are FI? Currently the only W2 income we have is from my part-time substitute teaching. In the past I always applied to a card with a higher income, but I am trying to think about how to factor in dividends, capital gains, etc.
Dividends, cap gains, roth conversions (or other retirement withdrawals) all should count as income. I think you could even include withdrawals from your taxable brokerage account as well (even though it’s not 100% “income” per the IRS, it’s still income to you, as an early retiree)
Thank you! We live near the Air Force Museum, so it was interesting to read about your stop there. Growing up, I got tired of going, but there were less hangars then. Once I moved back to the area with my own children, it’s a great, free option on really cold or hot days.
I called the Reconsideration Line for Chase after receiving the letter explaining why I was not initially approved. It worked and was worth my time!
So you’re saying that the $70,000 I paid in taxes last year goes to pay for millionaire’s healthcare? I don’t think that is sustainable
$70k in taxes?! Wow, you should consider my financial consulting services to help knock that tax bill down some!
Most of the ACA is paid for with the 3.8% NIIT which is mostly paid by individuals making $1million+ per year and also tend to have the majority of their income taxed at the much lower LTCG rate. I’m guessing very little of your $70k tax came from the NIIT and was taxed as ordinary income instead, so it mostly went to fight wars, infrastructure, education, welfare programs, interest on Federal Debt, etc.
Every other developed country provides no/low-cost health insurance to their citizens whether they be millionaires or not. Why does that not seem sustainable?
thanks for the detailed post. One comment… fox babies are “kits”, not “cubs”…
Google says “pups” and “cubs” are also used as names for the baby foxes. I am not a biologist though, so maybe kit is the only proper name?
Where do you get the discounted airbnb gcs? I can never find them for more than 3% off
Sam’s Club was the latest place. I’ve bought them there twice. $500 GCs at 8-10% discount (limit 10 cards lol)
I’ve been curious how you draw the income from your portfolio as I’m assuming it’s the non-retirement accounts due to your young age. I’ve built up a strong portfolio but much of it has been in pre-tax retirement accounts so I can’t touch it until 59 1/2 so not sure how to fund retiring early as I could be getting close but I’m roughly 80% retirement, 20% non-retirement.
Did you intentionally invest in after tax investments to get to this point to be able to withdrawal or just burning those down until 59 1/2 when you can access 401k etc.?
Spending down taxable accounts first. And doing Roth Conversions in the mean time. Also have a 457 account where I can withdraw any time I want without an early withdrawal penalty (haven’t had to touch it yet). Later in the game when the taxable acct is depleted, I’ll be pulling from the Roth accounts where my conversions are going each year.
Could you say a few words about how you secured “And in June we will pay over $1,000 for a rental car for 5+ weeks this summer.” FWIW, I had to pay over £400 for a week!
We ended up paying closer to $300 per week for a five week rental including the one way delivery (Budapest to Zagreb). I shopped around and ended up going with a local rental car agency instead of the major chains. It was challenging to find something affordable, that’s for sure!
How was the month of July on your assets? I’m down pretty good since January, 2022, but hoping for a second half of the year recovery.
I should have said how was June on your investments…
New blog post is out!