Does it feel like 2018 is flying by? Less than two months to go until 2019! We’ve been busy during the month of October. We spent the first part of the month aboard the Caribbean Princess cruise ship. Once we returned to Raleigh, we tackled several projects around the house and enjoyed the nice weather outside.
In financial news, you may have heard that turbulent times have returned to the stock market. At one point, our portfolio was down almost $200,000 for the month before recovering to $1,988,000, a loss of “only” $98,000. Income for the month remained strong at $5,352 while expenses remained rather low at $1,784, or exactly one third of our income. In conclusion, our net worth dropped by a significant margin, however our diversified income streams outpaced our spending.
Let’s check out the details for October.
Investment income totaled $3,145 in October. Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December, and sometimes the payments lag a few days into October as was the case this month. November will be a low month for dividend income while December is usually the largest month of the year by far thanks to year-end dividends. More on our dividend income.
Blog income, shown as “other income” in the chart, totaled $2,187 for the month of October. And November is shaping up to have even higher revenues! I expect I’ll have more time indoors when the weather gets cold this winter so my blog posts may become more regular at that point. The revenue will probably follow.
My early retirement lifestyle consulting income (“consulting”) dropped from $472 in September to $0 for the month of October. I probably lost a client or two while I was on the cruise because I didn’t answer my emails. We’ll see what happens in November.
If you sign up for Ebates through this link and make a qualifying $25 purchase through Ebates, you’ll get a $10 gift card. We continue to accumulate cash back from lots of different online retailers for travel bookings, gift cards, and general merchandise purchases.
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.
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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 October expenses:
In total, we spent $1,784 during October which is roughly $1,500 less than our target spending of $3,333 per month (or $40,000 per year). Top expenses for October include travel and groceries which has been the case for the past four months as we saw in July, August, and September expense reports. That also means we haven’t had any big lumpy expenses or unexpected “emergency” spending (which is great news).
Detailed breakdown of spending:
Travel – $1,237:
We paid for parts of three trips during October.
The first bit of travel spending covered miscellaneous October cruise costs:
- remainder of rental car fee – $14
- local bus fares on the islands of St Kitts and St Lucia for the two of us – $13
- Lyft ride from the cruise terminal to the Ft Lauderdale airport to get the rental car – $12
- Gas for the rental car – $5
Some great food on this cruise (and a whole article on cruise food for those interested/hungry):
The second trip we spent on is our upcoming Christmas cruise. The final payment came due at $740 (with around $500 already paid over the past year).
For our third upcoming trip, we’re going to Vietnam, Cambodia, and Thailand. I bought some more Airbnb gift cards at a discount using Raise.com. They routinely offer coupon codes that take 4% to 10% off their already discounted gift cards. This time around I bought $200 worth of Airbnb gift cards for $159 using a coupon code and a $25 referral credit.
We’ll be spending eight weeks in Southeast Asia and most of the time we’ll be renting Airbnbs by the week.
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For our Southeast Asia trip, I also booked the return flights home from Thailand for next August. I used 187,500 American Airlines Aadvantage miles to book five one way tickets from Bangkok to Raleigh plus a total of $297 in taxes. Since I have the Barclay American Airlines Aviator card, I got a 10,000 mile rebate on the AA redemption (10% of amount of miles redeemed up to a redemption of 100,000 miles).
If you want to score some free travel from credit cards, there are several 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 – $296:
We spent less than normal this month at grocery stores. The culprit for lower spending is most likely the fact that we weren’t at home for a third of the month. It’s funny how travel can save money in some categories.
We didn’t go hungry though. Here’s a nice grocery haul from Lidl that only cost $42:
In my never-ending quest to optimize my spending, I visited BJ’s Warehouse for the first time. BJ’s was offering free admission without a membership for a couple of weeks in October. We ended up finding a few items that were cheaper than Walmart, Lidl, and Aldi like:
- 500 yards of dental floss for 5% less than Walmart
- prosciutto fresh from the deli for $8 per pound
- A gallon of soy sauce at 30% off Walmart prices
Overall, we were not impressed. Much like my comparison shopping at Costco, I quickly figured out that warehouse stores aren’t a great way to save money and would add a lot of time to my weekly grocery shopping routine. Most items were about the same price or even more expensive than the low cost stores I usually shop at.
Clothing/Shoes – $68:
A pair of shoes for the six year old and several miscellaneous items for the rest of the family.
Education – $53:
$10 PTA dues for the two of us. $43 for three field trips the first graders will take this year.
Gas – $37:
Refueled about three quarters of a tank of gas.
Home Maintenance – $34:
I installed a new (used) cooktop in our kitchen. Once it was installed, I realized the front dual element burner didn’t work. After some troubleshooting, I realized the burner element wasn’t faulty. It was the switch for the burner. Who knew those switches cost $34?! At least we saved $500 by getting a lightly used cooktop for free from a neighbor instead of buying a similar unit brand new.
Mrs. Root of Good decided to film the repair process so we can make ten times that amount from Youtube ad revenues. Professional videographer in the making!
Entertainment – $30:
We chaperoned our son’s first grade class field trip to the North Carolina Zoo. We had to buy the zoo admission for the two of us for a total of $30, which I’m classifying as “entertainment”.
Cable/Satellite – $15:
$15 for one month’s internet bill. We qualify for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.
Utilities – $10:
Utilities are typically paid in lump sums in order to fulfill the terms of sign up bonus offers on credit cards. We still have around $500 worth of positive balances on our electric and water accounts, but the prepaid balance on the natural gas account finally got used up. I had to pay $10 to cover part of last month’s gas bill.
Telephone – $7:
My cell provider, Freedompop, decided to shut off my SIM card without advance notice. End result: I had to buy a new SIM card for $7 to get my cell service going again. I wouldn’t really recommend Freedompop since they are tricky and sometimes difficult to deal with.
But for my needs, I’m fine paying $0 each month for 250MB of 4G data and 200 VOIP minutes. I rarely use my phone so this is plenty for me. And I normally go a year or two between big problems, which seems par for the course for cell providers in general.
Restaurants – $5:
We had two free burger coupons for Ruby Tuesday’s so we went out for lunch (without the kids – shhhh… don’t tell them).
I left a $5 tip so the burgers weren’t entirely free.
Note on Health Insurance
- Health insurance premiums don’t show up this month because we prepaid the premiums in January and February for the whole year. If paid monthly, premiums would be $40 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$40,000 per year Adjusted Gross Income.
Total Spending in 2018
With ten months of expenses on the book, we have spent $22,335 year to date. That’s $11,000 less than the $33,333 budgeted for the first ten months of our $40,000 early retirement budget.
Big upcoming expenses include $1,400 for our Spring Break cruise to Cuba with the whole family.
In March, we will celebrate our fifteenth anniversary. We hope to book a one to two week trip to Mexico City for that occasion. Swanky Airbnb, coffee at sidewalk cafes, a bunch of tacos, and some cervezas and vino por la noche. And maybe we’ll visit ancient ruins and a volcano while there.
In summer of 2019 we will travel to Southeast Asia for around eight weeks. We will be planning that trip in more detail during late 2018 into 2019. I’ve already accumulated $2,400 of Airbnb credit so spending on lodging for this trip might be relatively minor during 2018. Next up, I plan to book several flights between cities in SE Asia which will add up to about $500.
For housing expenses, we have our $1,600 annual property tax bill due at the end of the year.
So far, we are on track to end 2018 with a significant budget surplus as we have in three out of the past four years of my early retirement.
Monthly Expense Summary for 2018:
- January 2018 – $1,281
- February 2018 – $3,108
- March 2018 – $2,025
- April – $1,977
- May – $3,366
- June – $3,554
- July – $1,389
- August – $2,565
- September – $1,342
- October – $1,784
Summary of annual spending from all years of early retirement:
Net Worth: $1,988,000 (-$98,000)
What can I say? We lost a bunch of money in October. At the worst point toward the end of the month we were down almost $200,000. Since we tend to spend $30,000 to $40,000 per year, last month’s “loss” of $98,000 represents about three years of living expenses.
Such is life. The market goes up and down. I never know which way it’s headed. In 10, 20, 30, or 40 years I expect the market will be up. Over shorter periods of time I’m less certain. The market requires patience and perseverance. In absolute terms, we’re still wealthier than we were during most of last year, and I felt pretty wealthy back then!
My advice for those early in their investing careers is to keep plowing money into their investments according to their asset allocations. If the market correction continues, then this might be one of the best buying opportunities of your lifetime. I look back fondly on the extremely low asset prices we saw in 2008 and 2009.
For those approaching retirement (early or otherwise), this little market hiccup is a good test of your nerves. And your asset allocation. If you can’t stomach market volatility right now while you’re working, then you’ll probably have a much harder time doing so once your portfolio is the main source of living expenses during retirement.
For us, we are sleeping well at night in spite of market turbulence. We’re sitting on a $180,000 stockpile of cash, CD’s, and bonds so we aren’t too worried about last month’s stock market losses.
How did you do in October? Stock market ghouls and goblins got you spooked?
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