October 2014 Financial Update

After losing $50,000 in September, October started out looking just as ugly.  By the middle of October we had lost another $50,000.  However the last half of October made up for all those losses and left us substantially wealthier by month end.  In terms of expenses, we didn’t do a lot of spending in October other than the ordinary monthly bills.

With $2,619 of income in October, we more than covered our $1,383 in spending.  The excess of income over expenses of $1,200 or so was dwarfed by tens of thousands in investment gains.



We received a tiny amount of dividends in the beginning of October ($361), but the real dividend party starts in December when some mutual funds and ETFs pay out all the dividends accumulated for the whole year.  Total investment income year-to-date for 2014 comes to $15,700.  Will we break $30,000 investment income for 2014?  You’ll have to wait and see just like me!  We’ll likely surpass our $22,300 of dividend income during 2013.

Blog income, shown as “other income” in the chart was about the same as September at $472.  I have a few checks that are probably “in the mail” that would have made October’s freelancing and blogging income much higher.  $472 is lower than the $600-800 I expect to make on average over the long term.  Nothing to worry about though, as I’m not spending as much time in front of the keyboard these days.

Mrs. Root of Good is still working, hence the salary income.  This income will likely cease some time in the next year, and possibly within a few months depending on when Mrs. RoG joins me in early retirement.  My next post will touch on something that’s driving her toward early retirement.

I’m missing the $525 of “travel income” I made in September from my Barclay Arrival Plus card.  Our travel credits almost paid for half of last month’s seven night cruise.

“Deposits” of $225 included $200 from American Express for “the value of unused points that should have been rewarded”.  I can only guess that these were supposed to be Starwood Preferred Guest points but I received all of them that I was supposed to receive.  I feel a little like a player in Monopoly – “Bank Error In Your Favor.  Collect $200.”  I thought that’s what you’re supposed to receive for passing “Go”?  I also received $25 from beer rebates.




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 look at October expenses:


At $1,383 for October, our expenses were significantly less than our budgeted $2,667 monthly spending.  That’s partly because we spent less than average in recurring categories like groceries, but also because no once per year bills like property tax or house insurance were due this month.  This month’s low spending is a nice relief after slightly overspending our monthly budget last month due to taking a last-minute vacation.

We spent $491 on utilities in October, but about half of that is a prepayment on our electricity bill so that I make $500 in spending on a credit card that offered an extra $50 gift card when you spend $500.  Don’t mind if I do!  This also means I’ve paid our electricity bill for the rest of the winter.

Groceries were second on the list of expenditures in October.  The $413 spent on groceries is a little less than usual.  That’s not bad considering the awesome meals we cooked at home.  We even spent $30 at the local Korean grocery store for sushi ingredients which includes a few ingredients that we’ll use on future sushi ventures.

The month was otherwise one of relatively modest spending.  We spent a bit more on dining out than we usually do.  The main culprit was a change in the pricing structure at one of our favorite restaurants.  The price for a weekend buffet almost doubled since we visited last time (weekday lunch time prices stayed the same).  Lesson learned.  Time to use one of the benefits of early retirement to our advantage and make sure to visit the Chinese buffet with awesome sushi during the week at lunch time to get the $7 per person price instead of $13.

The $40 in education spending covers all of our kids’ seven field trips for the year.  We have been fortunate so far that their class outings have been very inexpensive.  I can’t wait for the days when the kids will need a couple thousand bucks to take a weekend school trip to Spain (/sarcasm).

We ventured out to the shopping mall just up the street for a marathon day of shoe shopping.  I really dislike shoe shopping, but we got the job done.  At $69 for four pairs of shoes at Sears, I can’t complain too much.  That’s a pair for everyone in the family except Mrs. Root of Good.  Who was the only person that actually needed new shoes and the reason we went shoe shopping in the first place.  At least 80% of our family should have its footwear needs satisfied for another six to twelve months (or many years in my case).

While talking to the sales associate in the shoe department, he revealed that most of the shoes were on sale for half off or more.  They are clearing out the old inventory and getting in brand new inventory of identical style shoes with slightly different color schemes.  Ah, the wonders of modern retailing.  I guess we have the early 2014 style of shoes instead of the late 2014 styling.  Please don’t tell anyone of this horrible fashion faux pas committed by the Root of Good household.  Let the masses discover on their own that our shoes have the “old” shadings of greens, reds, and pinks instead of the new and improved color palettes.

Overall, we had another very successful month of not spending a ton of money while living a perfectly fulfilling life.


We budgeted $32,000 per year for retirement, so ten months of spending should be $26,667.  At roughly $21,500 year to date actual spending, we are roughly five thousand dollars under budget for the year.

Have no fear, I’m working hard to rectify that underspending.  We are about to have new siding installed on our house in November.  I haven’t selected the contractor yet, but I’m close.  There are two contractors on my short list at prices of $5,000 and $6,000 for installing new vinyl siding and trim.  This should bring our spending up to the budgeted levels.  Or possibly over budget by a few thousand since the siding replacement could easily have another $2,000 in additional work if the siding crew uncovers any unexpected rotting during the install.


Net Worth: $1,443,000 (+$35,000)

The painful losses of September and early October were washed away by phenomenal gains in the stock market in the latter half of October.  We are still $15,000 below our net worth high water mark of $1,458,000 reached in August 2014, but almost $100,000 wealthier than we were a couple of weeks ago.

October was rather volatile.  There were four days where our net worth jumped by over $15,000 and three days with losses greater than $15,000.  That means on seven different days our net worth moved by an amount equal to six months’ living expenses.  I would go crazy if I looked at the financial numbers and stock market every day when that much money is sloshing around.



What’s next for the stock market?  Beats me.  I’ll just be sitting here having fun and collecting my dividends and doing a whole lot of nothing.



How did you ride out this bumpy October?  More tricks than treats?



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  1. Oh man, the amount of grousing at work over the market was hilarious. I had a mini-CNBC roundtable going on at the lunch table! I’d say 1/2 the table was intending to sell equities and hold cash “until the market is in a more stable place”.

    Note that this was their 401k they were talking about. And none of these folks will be retiring early… so their time horizon is still multiple decades away.

    It’s a good reminder that so many Americans are flighty investors. I’m sure some of those guys sold, and I’m sure that some of them haven’t gotten back in yet. It’s a terrible strategy.

    Reminds me of this chart:


    It should strike fear in the heart of any active trader. You miss the 10 best days of the past 10 years… and there go your returns.

    And when do those best days tend to occur? Right after the deepest depths of despair when people are selling like mad.

    Set it and forget it! Not just a infomercial rotisserie oven jingle, but a solid investing strategy!

    1. Yeah, I just don’t get it. Jumping in and out of the market doesn’t reduce volatility any (other than having zero volatility when you’re in FDIC insured cash accounts!). We’re talking about retirement money that no one will touch for years or decades. Heck, even early retirees won’t touch the majority of their investment portfolio for years or decades. For example, we have a million bucks we probably won’t touch for another 5-10 years. The other $300,000 or so we’ll probably spend down within 10 years, but most of our NW won’t be touched for a loooong time.

  2. Great month for investors as you noted, as long as you didn’t get spooked listening to CNBC and all the other talking heads. I love how when the market is down they all scream “Sell”, but scream “Buy” when it is up. PT Barnum was absolutely right.

    I like that you have the ability to prepay for utilities to maximize your credit card rebate. We don’t have that here, at least that I am aware of. I need to check into that so thanks for the headsup.

    1. I’m glad I don’t waste money on cable and as a result occasionally watch CNBC. That channel can make you broke! Are people investing for their retirement years or decades away or putting stakes on their favorite horse at the races? Makes you wonder.

      Our electric company (Duke Energy) lets us pay with a credit card for a $2.40 fee. Since I charged around $350, I made back 1% in rewards (or $3.50) plus finished up the $500 spending requirement to pocket another $50. So it does cost a tiny bit to use the CC, but it’s worth it if you charge a few months worth of electricity usage.

  3. I’ve been antsy to invest some additional cash into the stock market. I should have pulled the trigger two weeks ago, but I didn’t. I’m probably going to go ahead and pull the trigger in the next week or so.

  4. I think I’d panic if my net worth dropped so much, but it obviously pays to hold out as, by the end of the month, you were up by a lot! Another good month for you 🙂

    1. Just think of your investments as long term money not to be touched for a long time. Daily or monthly fluctuations won’t mean a thing 10 years from now.

  5. I was all set to see some terrible numbers then it just turned around. Unfortunately I sold some BAC options that I should have held on to! I added to a couple of mutual fund positions at the right time though. I am one of those people that check on my holdings nearly every day, so I tend to get sucked in to the panic sometimes even though I know I should avoid it.

  6. ROG,

    Spending less than $1400 is insane (in a good way). Great job! I noticed your family’s health care expenses have totalled less than $2000 for the year. Do you pay for health insurance in one lump sum each year?


    1. I’m “cheating” on the health insurance payments since Mrs. RoG is still working. It actually comes out pre-tax from her paycheck so I don’t really count it as an expense (although it is an expense). It’s about $480 per year (yes, per year!) so not very significant. I’ve budgeted for something like $1000/yr on health insurance once Mrs. RoG finally calls it quits, but the exact premium will depend on our incomes since we’ll be getting ACA subsidies.

      I figure we’re spending a lot on Mrs. RoG’s gas to commute to work, so once she quits that expense goes away. The savings on gas will more than pay our health insurance premiums.

  7. I love when the market goes down and I get to buy at a reduced price. Absolute best time to buy! I just wish I would have had more to invest to take full advantage in early October.

  8. The October roller coaster is something none of us will forget anytime soon. It’s been a long time since we have seen that kind of crazy volatility and everyone’s portfolio reflected the changes. Thanks for sharing your recent income and expenses. Your expenses are really kept in check and I think you are doing an amazing job of not coming close to your income levels. Look forward to your next update.

    1. I embrace the volatility and was almost at the point of rebalancing some US funds into international investments. It’s a good reminder that stocks don’t always go up up up.

  9. I was hoping that the market would stay low for a while so I can continue buying stocks at a cheaper price. Too bad that didn’t happen. Your expenses and net worth are looking great. Hopefully we’ll get to the same point as you in the near future.

  10. Maybe you have addressed this somewhere buy could you explain the $490 utility bill?

    I think I would crap my pants if we spent this much. I’m on well and septic and all electric but our highest total monthly bill on a 3100 house was $220 in the dead of winter in the Midwest.

    I’m assuming a good portion of your bill is heat? What type of fuel and system do you have?

    Details if you have the time friend?

    1. That was mostly prepaying the electric bill. I needed to spend $500 on a credit card to get $50-75 in rewards back (some promotion they ran) so I paid extra on the electricity.

      We do spend close to $200 during the dead of winter and the worst month of summer. Heat is natural gas and we keep it pretty toasty inside.

      1. That makes perfect sense now. Thanks for the reply. You are a wise man. I have seen the question many times on how to spend enough money to meet certain card requirements for bonuses. I think prepaying bills on a credit card is a pretty good way to do so. I wonder if we could prepay our mortgage using ccs? I’ll have to check.

        thanks again

        1. I can pay city water, natural gas, electricity, home/auto insurance, and even the kids’ lunch money with a credit card. The electric and lunch money charge a $2 fee, but it’s still worth it after the rewards points (even ignoring special “spend $500 get $50 extra back” deals).

  11. Hey mate,

    I recently downloaded the ebook “The Dividend Lie” and found your blog that way. I totally liked this book showing typical pitfalls you come across when you try to become financially independent. Great interview of yours, too!

    Looking at your blog, I have a lot to discover. Thanks for posting this awesome journey!


  12. Good times when $389 dividends are considered “tiny”!! 😉

    It takes a lot of self-discipline not to get emotionally involved when you lose $100k in 45 days, but as you know, its so important not to get distracted by the daily, weekly, monthly or annual moves in the markets. Just invest for the long-term (however much you have invested) and things will be pretty good…!

    1. Tiny compared to our total annual dividend income, but still very significant in terms of one month’s spending and income (where some months we only spend around $1,000!).

      Watching the portfolio values go up is slightly more fun than watching them go down. Understanding that they will fluctuate frequently and coming to terms with that is the key though.

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