Out with the old and in with the new! 2018 proved to be another fun-filled and successful year of early retirement for us at Root of Good. I’m looking forward to 2019 being more of the same. Our oldest child will enter high school (!!) in the fall which means college is just around the corner.
We have several trips lined up for 2019 that will bring us to Mexico, Cuba, the Caribbean, and Southeast Asia. We’ll be spending more than two months overseas exploring new places, eating new foods, and wondering how we ever had time for full time jobs.
Looking back on December’s finances, we saw a very significant drop in our net worth. Due to a major stock market correction, our net worth dropped $117,000 during December to end the year at $1,871,000. Compared to 2017, we were $166,000 poorer at the end of 2018, which represents an 8.1% drop in net worth versus 2017’s $2,037,000 year end balance. After a brief bout of volatility in January and February, 2018’s market was mostly uneventful until October when stocks went into decline. Tough times in the stock market, but that is to be expected occasionally.
Spending for the month of December totaled $3,878 with a year end total of $29,058 for all of 2018. Income for the month of December was very high at $21,030 due to year end dividend payments and several double payments from blog advertisers. Income for the year totaled $72,605 and was roughly half blog income, half investment income.
Ok, folks. 2018 is rapidly coming to a close. We’ve had a busy year and 2019 will be no different. I’m not sure how I ever had time for anything fun when I was working 40 hours per week!
Looking back on November’s finances, it was a month of holding steady. Out net worth remained the same at $1,988,000. It was a good month of income with $4,173. Our expenses remained moderate at $2,846. In financial terms we’re just fine even though we are still about $50,000 below our year end 2017 net worth of $2,037,000.
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.
Better late than never, right? Since we’ve been cruising the Caribbean without internet, this monthly financial update and slice of early retired life is about two weeks late. I’ll work on the timeliness in the future. If I have time 🙂
Aside from having fun on the cruise, I’m extremely excited that it finally feels like fall here in North Carolina. The air conditioning is off and the windows are open after a long, hot, humid summer. Time to enjoy the outdoors before it gets cold!
Financially, September was an okay month. Income exceeded expenses, which is always good. We brought in $2,829 in September while only spending $1,342. On the net worth balance sheet, we shed $12,000 in value to bring our net worth to a still respectable $2,086,000.
When you have kids it’s impossible to retire early, right? I found out that may not be true in all cases. Like my own. We have three kids and still managed to retire early. But how is it possible when kids are soooooo expensive?
The US Department of Agriculture publishes the “Expenditures on Children By Families Annual Report” which examines the cost to raise children in America. The headline number that gets a lot of press is the total cost to raise a child from age 0 to 17: $233,610. And that doesn’t include the cost of college!
Almost a quarter of a million dollars seems really high to me, so I’m diving into our kid-spending to see what it actually costs to raise our three kids.
And just like that, our summer break is over. The kids have been back in school for a week already and us parents are enjoying our peace and tranquility during the middle of the day. The summer weather, however, lingers on. It’s been hot and humid for the past week. I’m looking forward to real fall with it’s cool mornings and lower humidity.
Financially, August treated us very well. Our net worth went up by $14,000 to $2,098,000 thanks to mildly positive stock market returns. Our income remained very strong in August at $5,923 while our expenses remained rather modest at $2,565 for the month.
Any month where your income exceeds spending and your net worth goes up is a good one! Now let’s jump into the details.
Well folks, today marks five years of early retirement for me. Flashback: on August 26, 2013 I spent the morning sitting in my office at work, catching up on emails after a week long vacation. Then my boss walks in, says “you’re fired”, hands me the dismissal paperwork and I’m on my way. I spend the rest of the morning at home puzzling over my spreadsheets to verify that I am, in fact, financially independent.
Analysis result: I was financially independent. Our initial budgeted spending of $32,000 per year was only three percent of our total investment balance. In other words, way less than the 4% rule dictates.
Fast forward five years and here we are. Five years older and five years wiser. Our kids were age 1, 7, and 8 when I retired and now they are 6, 12, and 13! They are very different people than they were five years ago.
Right after I quit working, I was still in production mentality when I started this blog. I always wanted to do something internet-y and the blog was the first thing that came to mind. After a weekend of googling “how to start a blog” and other extremely basic search queries, I had figured it all out. I registered the rootofgood.com domain name and published my first article on September 11th, 2013.
Have you ever wondered what it is like to be shipwrecked on a deserted island? Would you get bored? Would you starve? Die of dehydration?
Or would you thrive and prosper in your newfound isolation and make the most out of your (hopefully) temporary stay on the beach?
In a roundabout way, our one month trip to Freeport, Bahamas was inspired by this thought experiment. What would life be like in a relatively isolated section of a Caribbean island? Crystal clear water. White sand beaches. No people. No nearby restaurants or entertainment.
Are we crazy to voluntarily shipwreck ourselves in such a predicament? I don’t think so. But we aren’t complete gluttons for punishment. We made sure to book a place with air conditioning and wifi (it is the 21st century after all).
It’s early August and we’ve been at home for about two weeks after spending a month vacationing in the Bahamas during June and July. Summer is flying by incredibly fast because we have been so busy!
Our oldest two kids just wrapped up two weeks in summer camp. The whole family has enjoyed lunch, dinner, or play dates with several groups of friends that we haven’t seen all summer. Back to school shopping is mostly done. And school starts in three short weeks!
In the meantime, our lazy investment portfolio continues to be busy as well (in a very hands-off way). Our net worth shot up by $46,000 during the month of July to $2,084,000. Spending was particularly low at $1,389 while income remained strong at $4,361 for the month.
“JM”, a new commenter on the blog, left a great comment asking about tracking spending and how that helps you get to Financial Independence.
“Do you track all your monthly spending, no matter how minute? Did this help get you to Financial Independence? And how?” -JM
The quick answer is yes, I did track all spending down to the dollar while working towards FI. And looking back, tracking everything I spent was pivotal to accelerating my journey to FI.