October 2013 Update

Halloween is over (booo!) and Thanksgiving is around the corner.  Looks like we will be hosting a big Thanksgiving dinner for Mrs. RootofGood’s side of the family again this year.

Right now, I’m preemptively giving thanks that last year I did a post mortem of Thanksgiving 2012 and prepared a spreadsheet of what we served including quantities and notes on how much was eaten.  It will make preparing and cooking this year’s meal for 25-30 people in our small kitchen a lot easier.  The quick and dirty: make more green beans and green bean casserole and don’t make chili (no love for creativity at Thanksgiving??).

But that is this month.  Let’s reflect back on the month that has just passed – October 2013.

First off, this is an awesome time of year in North Carolina.  The temperature tends to hover around the 60’s and 70’s, with chilly nights.  The leaves start to turn golden yellow or bright red and orange during the month.  It’s a perfect time of year to spend time outside or keep cozy inside if it’s chilly.  And a perfect time to harvest the last fruits and vegetables from your garden.

Income and Expenses

Let’s look at the Root of Good household’s financial activity in October.

Overall it was a great month.  Personal Capital made it really easy to take a quick look at my income and expenses, and then drill down to areas of spending that were unusually high.  Keeping track of our investment portfolio takes two clicks and is incredibly easy with Personal Capital.  If you haven’t signed up for the free Personal Capital service, check it out today.

Here’s a look at our Personal Capital displays for the month:

Our income was solid in October.  Mrs. RootofGood’s take home pay accounts for about half the monthly income, with another big chunk coming from some final payouts from my old job.  We also received $263 in dividends and interest income in our taxable accounts.  We won’t see much investment income in November.  December will be a huge investment income month since most of my funds and ETFs pay quarter end or year end dividends in December.

Now let’s look at expenses:

 Woah!  No way we spent over $9,000 in one month!  Digging in a little more shows that we spent most of that ($6,957) on “business misc.” expenses.  We paid for a new (used) work van for my wife’s father with the agreement that we would be paid back over the next couple years (with a reasonable family interest rate).  In general it’s a bad idea to lend money to family or friends, but this was a reasonable situation (lending money on an income producing tool).

After pulling out the expenses for what is really an investment in a loan note, we only spent $2,100 in October including our $1,245 mortgage.  Not a bad month at all.

The only category of spending that jumped out at me as being abnormally high was “Restaurants” at $126.  This isn’t exactly a budget buster, but it is higher than the $80 per month I budgeted for in our Retirement Budget.  Enter Personal Capital.  One click and it tells me exactly where we went to eat and how much we spent at each restaurant.  Personal Capital and my waistband say “Time to lay off the China Buffet” (but the sushi is so good!).

I’m not worried about going $46 over our budgeted amount this one month, but it is something to keep an eye on if it recurs on a regular basis.  If so, we’ll have to intentionally adjust the budget upwards to address our higher spending on dining out, or cut spending elsewhere.

To recap, spending in October looks pretty good with no real areas of concern.  Recurring income was awesome and more than covered our recurring expenses.

Investments

October was more than kind to our investment portfolio.  We ended the month about 3% higher than where we started.  This doesn’t seem like a big change, but it is enough to cover one full year of our retirement expenses.

Very positive months like October 2013 makes you forget that bad months can easily be right around the corner.  Getting used to making or losing 5-10% in a month is part of living off your investments.  I’ve mostly lost interest in looking at the investment portfolio daily because a five figure swing up or down is often temporary.  I’m not planning on selling huge chunks of my portfolio, so daily changes don’t really mean a whole lot (other than ulcers if you worry too much about it).

It’s easy to forget that investing this October was supposed to be scary for reasons other than little kids dressed as adorable (but oh so spooky!) zombies, vampires, and witches.  Anyone remember that Government Shutdown thing?  Well, apparently it happened in October but I still earned a 3% return.  Check out that article I just linked if you want to learn how to turn the television off and make more money in your investment portfolio by doing nothing.

What have I been up to in month #2 of retirement?

I provided an update at one month into my early retirement adventure.  Here’s the two month update:

• I’m still working on the French language at duolingo.com.  Making progress slowly.
• Blogging has been going great (full update below) and I have successfully reduced my time expenditures on the blog so I can pursue other interests.  The downside is less frequent articles, but the upside is I won’t get burnt out on blogging by proceeding at a leisurely writing pace.  Quality, not quantity, right?
• Exercising and cooking are going well.  The weather has been great for walking 2-5 miles per day, although the mornings are starting to get chilly.  I learned a couple new recipes, including naan.
• October was an intensely busy month socially.  Playdates for the kids and adults, lunch and dinner parties, halloween parties, birthday parties, sleepovers. Hosting a Mr. Money Mustache Triangle Area meet up.  It has been so busy that Mrs. RootofGood declared this past weekend a “stay at home and don’t do anything” weekend.  Little did she know that staying at home and doing nothing is still technically doing something.
• I had to make it a point to read more books and play more games.  In retirement, it’s easy to while away the time surfing on the internet, but that’s often a waste of time (though occasionally an interesting waste of time!).  I finished up a couple of books and jumped into a few new ones.  There’s been some minor online strategy war games going on lately, but nothing too time consuming.
• I’m sad to report my ebaying and craigslisting has fallen to the wayside (and the junk is still in my house).  I’ll get this done in November (I promise).  No excuses.
• I dabbled with some WordPress and PHP programming on this blog.
• Taking care of Mr. RootofGood Jr. consumes time like the Sahara consumes most of North Africa.  Fortunately my time spent with the little guy is way more enjoyable than the dessication and desertification of half a continent.  He has a busy social calendar and keeps me on the move.

Root of Good Blog Update

It has been a very busy month for Root of Good.

Stats for October:

Visitors: 9,467

Unique Visitors: 6,538

Pageviews: 19,369

Most popular pages:

Make $150,000 Income, Pay $150 Tax

Early Retirement at 33: An Overview

I Retired At 33!

A Simple Way to Retire 15 Years Earlier

Facebook subscribers: 39

Blog subscribers/followers: 21

Twitter followers: 74

Revenue: $358 (although I haven’t actually received a penny of this yet).  I’m surprised I’m already getting this kind of revenue.  November is looking decent so far as well.  $358 per month income represents 13% of our budgeted retirement spending.  It’s pretty cool to think slinging words onto the internet can fund 13% of our retirement.  I’m skeptical about the long term revenue prospects, but as long as it remains fun to blog, I’ll keep it up.  Picking up some beer money is a side benefit.

Guest Posts: During October I was lucky to have a guest post from Nick at Pretired.org on Rethinking Retirement.  Thanks again to Nick for sharing his take on what retirement means in the modern day.

Coming up on Wednesday will be a guest post from Doug Nordman, founder of The Military Guide and author of “The Military Guide to Financial Independence and Retirement”.  In addition to being an early-retired nuclear submarine officer and surfer dude, he’s also an expert in military benefits, pension, health care, and early retirement.  Doug will discuss whether it makes sense to join the military if early retirement is your goal.  Stay tuned!