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.
Without further ado, here’s our September month in review:
Investment income totaled $2,128 in September. Our equity mutual funds and ETFs pay dividends quarterly in March, June, September, and December, which means this month’s dividends are much higher than most months. And perhaps due to the end of the month falling on a weekend, a lot of dividends arrived in very early October. As a result, we’ll have a good chunk of investment income in October as well. More on our dividend income.
Blog income, shown as “other income” in the chart, dropped from a healthy $4,588 in August to an anemic $152 for the month of September. This drop was expected since I received two big advertiser checks in August and zero in September. Another advertiser paid slightly later than usual, with a big $1,000+ payment arriving in very early October. So October might end up having a few double payments like August!
Fortunately I don’t rely on blog income for cash flow or retirement spending, so a month where I earn only $152 from the blog doesn’t steal any of my precious sleep.
My early retirement lifestyle consulting income (“consulting”) was $472 in September which represents about one hour per week of consulting. I’m enjoying the nice slow pace of this little hustle since I’ve been busy with the whole “retire and have fun” thing lately.
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.
Restaurant “income” of $2 doesn’t mean we opened up a restaurant to sell our awesome home-cooked food. After being surprised by this unexpected income, I did a little digging.
Apparently the two McDonald’s app purchases from August were refunded. It’s not worth my time to investigate why, but I’ll take the $2. I assume the restaurant failed to mark my orders as “picked up” so I automatically received a refund??
And that’s the income report for September. I need to highlight the fact that we have income arriving every month from several sources of income such as this blog, my consulting sessions, and our passive index fund portfolio. A bad month of income in one or two areas doesn’t necessarily mean we have a bad month overall, as September’s financials illustrate well.
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 September expenses:
In total, we spent a miserly $1,342 during September which is roughly $2,000 less than our target spending of $3,333 per month (or $40,000 per year). Top expenses for September include travel and groceries which is a trend that we’ve seen in July and August expenses too.
Detailed breakdown of spending:
Groceries – $596:
Another month of fairly routine grocery shopping at our normal places: Aldi, Lidl, SuperWalmart, and Food Lion. Grocery spending is slightly higher than usual since I stocked up on some staples at Food Lion during their semi-annual “Quarter Back” promotion where you get a $0.25 discount on all store brand items.
Also wrapped up within the “grocery” category this month was some “charitable giving”. We bought about $60 worth of extra school supplies and treats for teachers at Walmart and Lidl to donate to our kid’s school. The school supplies were mixed in with other grocery purchases so I left what would rightly be called “charity” in the “groceries” category.
As long as we track our overall spending accurately I’m not too concerned with some slippage between budget categories. The Four Percent Rule doesn’t care whether you’re spending on food or charity.
Travel – $494:
We just got back from a trip aboard the Caribbean Princess cruise ship where we made a ten day voyage through the Caribbean. Ports of call included:
- Princess Cays, Bahamas (private island)
- St. Thomas, U.S. Virgin Islands
- St. Kitts
- St. Lucia
- St. Maarten
The cruise fare itself was $1,316 total for the two of us which we paid in August (the kids didn’t come on this trip!).
To get to Fort Lauderdale, we used 7,500 British Airways points each plus paid $5.60 for taxes for a nonstop Raleigh to Miami flight. The return trip (from West Palm Beach) was 4,600 Southwest points each plus $5.60 in taxes.
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For the cruise, we paid for train tickets to Ft. Lauderdale from the Miami airport and a Lyft ride to the cruise terminal from the train station. I also prepaid for a rental car for the day of our return to Ft. Lauderdale so we could explore the local area before flying home to Raleigh.
Other travel spending includes another $450 of Airbnb gift cards bought at a discount when Raise.com had a sale. I’m buying as many Airbnb gift cards as I can since we’ll be spending eight weeks in Southeast Asia in Airbnbs.
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Clothing/Shoes – $77:
$60 for two pairs of new shoes. One pair for me and one for my daughter. I wear out shoes more frequently in retirement now that I’m outside walking around more.
$17 for an epic thrift shop haul. About 15 articles of clothing for me and our six year old son. Several items were brand new. We randomly visited the thrift shop when all men’s clothing was half off and I had a $5 off $20 coupon too!
Home Maintenance – $52:
$3 for a gallon of gas for the lawnmower. I always enjoy riding my bike to the gas station to buy gas because of the fun looks I get along the way.
$49 for several bags of ant killer treatment for our yard plus several new pairs of leather work gloves. Time to do some yard work now that the cooler weather is here! And cut some firewood for fall/winter campfires under the stars.
Gas – $43:
I refilled the minivan before Hurricane Florence just in case things got really bad here and we needed to make a quick escape.
General Merchandise – $43:
Two sets of king size bed sheets.
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.
Education – $10:
Picked up a few items for the kids at Walmart and Dollar Tree.
Electronics – $10:
Four new high quality, high amperage HDMI cables from Monoprice. The kids wear out these cables about once per year.
Note on Health Insurance, Utilities, and other expenses
- 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.
- 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 $600 worth of positive balances on our electric and water accounts
- We didn’t have any new restaurant expenses in September. I used up an old gift card for some pizza but that was it for dining out spending
Total Spending in 2018
We are three quarters of the way through 2018 and we have spent $20,552 year to date. That’s about $9,500 less than the $30,000 budgeted for the first nine months of our $40,000 early retirement budget.
We’ll be doing quite a bit more travel related spending in the next few months. We owe two thousand dollars for our Christmas and Spring Break cruises with the whole family.
In March, we will celebrate our fifteenth anniversary. We hope to book a one to two week trip for that occasion. Mexico City is a front runner. 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 $2,000 of Airbnb credit so spending on lodging for this trip might be relatively minor during 2018.
For housing expenses, we have our $1,600 annual property tax bill due at the end of the year.
Forecasting spending into the next few months, I can see that we’ll be spending a lot more than the $1,342 spent in September. But overall, we are on track to end 2018 with a decent 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
Summary of annual spending from all years of early retirement:
Net Worth: $2,086,000 (-$12,000)
During the month of September we only saw a modest reduction to our net worth due to a slight decline in the stock market. Our net worth dropped by $12,000 to $2,086,000. October has been much bloodier so far, but that’s a story for next month’s financial update.
We’re still feeling wealthy and flush with cash. We’re sitting on a $180,000 stockpile of cash, CD’s, and bonds so we aren’t too worried about the recent stock market dip in early October.
What happens if October marks the start of the next big recession and multi-year stock market crash? We’ll probably be okay.
The fixed income portion of our portfolio would last us for five years if we maintained our average spending at $35,000 per year. In fact, we would probably spend less than that since discretionary travel should grow cheaper during a recession. On top of the fixed income cushion, we also earn around $35,000 in dividend income each year. And to add another layer of security, I have income from this blog and my consulting business, though those streams of income are rather variable month to month.
In any event, I’m not worried about running out of money in early retirement.
For those still working, you should view the drop in the market in October as a good thing. It’s a buying opportunity. Should the market continue to drop, you’ll be getting even more shares for the same amount of money. If you’re still contributing to your investment accounts early in your FIRE journey then you should he hoping for a stock market correction so you can buy into the market at lower average prices.
Looking back at 2008 and 2009, our continued monthly investments during that period of time were a huge contributing factor to enable early retirement in our 30’s with a seven figure portfolio.
I’ve had a lot of people send me messages asking if this is the start of the next big market crash. If I knew anything for certain, I’d be running the best performing multi-billion dollar hedge fund that Wall Street has ever seen.
But given my limited knowledge, I can only look at the history of the stock market. It tends to go up and down over time. Lately it’s been going up a lot for more than nine years. Eventually it will go sideways or down. When, for how long, and how far down? Who knows?!
How did you do in September? Enjoying the fall weather so far?
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