April 2021 Early Retirement Update

How does every month fly by so fast? Is it really May already?! I’m going to hit the pause button for a minute and reflect on the last month. 

It was a very busy month for us. The kids had spring break in early April with lots of fun times with their friends. Then we enjoyed a relatively normal Easter family gathering this year since almost everyone is vaccinated now. We closed out the month with a birthday party for our son. 

Nice weather means more time outdoors enjoying this fine spring weather. The pollen finally abated toward the end of the month too.

Right now, we’re busy planning the final details of our big summer road trip. It’ll be exciting to hit the road once again after over a year of being (mostly) stuck at home! 

Our finances had a good time last month, too. Our net worth went up $19,000 to end the month at $2,667,000. Income during the month totaled $4,789, which was roughly double the $2,450 we spent during the month. 

Let’s jump into the details from last month.

Income

Investment income totaled $373 in April. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. As a result, we had a relatively modest month of investment income last month. Here’s more on our dividend investments.

Blog income totaled $1,526 for the month which was in line with average over the past several months. 

My early retirement lifestyle consulting income (“consulting”) was $2,002 for the month of April which represents fourteen hours of consulting sessions. I bumped my rates up by about 5% in February to $150 per hour. In spite of the fee increase, April was a record-breaking month in my little consulting side hustle. May is starting out much slower but it’s a welcome reprieve after a busy month. Ideally, I’d like to do one or two hours of consulting per week so I still have plenty of unstructured free time during the day (the whole point of retiring early!). 

Tradeline sales income was $425 in April. May income should be a little bit higher. But June will be lower since my credit card slots are almost totally full right now. I ramped up my tradeline sales last year and discussed it in a bit more detail in my October 2020 monthly post. 

The “deposit income” totaled $58 in April. A redemption of credit card rewards added $37 to the deposit income.  

The other $21 in “deposit income” came from cash back and incentive bonuses from the Ebates.com and Mrrebates.com online shopping portals (some of which was earned from you readers signing up through these links). 

If you sign up for Ebates/Rakuten through this link and make a qualifying $20 purchase through Ebates/Rakuten, you’ll get a $20 sign up bonus (limited time only; normal bonus is $10 after a $25 purchase). 

I managed to sell two items in April and net $83. The first item was a large wardrobe I sold on Facebook marketplace for $60. The second item was an old VOIP phone adapter I sold through ebay for $23. This is stuff we’d usually set on the road for someone to pick up for free (or toss it in the trash/recycling in the case of the old electronics). 

I didn’t include the other big “stuff sale” we had in April in my income totals. My daughter cleaned up and organized her old doll collection and other toys from her childhood that they no longer play with. She listed several lots on ebay and she hit the jackpot with a $100+ sale of 10 Monster High dolls! She did most of the work so she got to keep most of the money (after giving her little sister 10% of the sale proceeds since the dolls belonged to both of them).

My Youtube earnings totaled $320 last month. Here is the channel for the curious. It’s random travel videos, birds, kids, and a couple of DIY videos. Somehow through the magic of the internet hundreds of thousands of people watch the vids and we get paid for it. 

Not shown in my income report is the $1,000 sign up bonus for my new account at Interactive Brokers. I received the bonus within a few days of funding my new account in April. But there is a catch. They pay 1% of any amounts transferred into a brokerage account at Interactive Brokers, up to $1,000 bonus for transferring $100,000. I transferred shares of two ETFs I’m not planning on selling any time soon. All I have to do it let the funds sit there for a year to get the $1,000 fully vested so I can withdraw it.

Here’s the catch. The bonus isn’t a straight up cash bonus. They pay you in shares of their own business. So now I’m the proud owner of about 15 shares of IBKR stock. I’m okay with that, since I can sell the shares after a year and cash out the value. If you’re interested in this sign up bonus, here is my referral link to the $1,000 sign up bonus. 

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).

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.

Expenses

Now let’s take a look at April expenses:

In total, we spent $2,450 during April which is almost $900 less than our regularly budgeted $3,333 per month (or $40,000 per year). Healthcare/dental and groceries topped the spending categories in April.

Detailed breakdown of spending:

Healthcare/Medical/Dental – $799:

Initially, our 2021 healthcare premiums were $135 per month thanks to very generous Affordable Care Act subsidies that we received due to our low ~$45,000 per year Adjusted Gross Income. The benefit of being “poor” on our tax return. 

But wait, it gets better! The “American Rescue Plan” passed in March 2021 makes the Affordable Care Act premiums even cheaper. Households with modified adjusted gross incomes (MAGI) below 150% of the federal poverty level get some silver-level health insurance plans completely free. We opted for a slightly more expensive silver plan that comes with $1,000 in cash back incentive rewards. Our total cost is $1 per month now! On top of that, it looks like we’ll get a refund at tax time of the extra $134 per month in premiums we paid during January, February, and March. 

In addition to the $1 expense for health insurance, we also spent another $798 on a crown replacement for Mrs. Root of Good (plus the remaining $200 cost using free cash back rewards from our health insurance company). These kind of “one time” expenses come up with amazing regularity, so it’s fortunate that we budget for “emergencies” like this. I’m being facetious – these are completely predictable over the course of decades of early retirement so you just have to stick something in the budget for big healthcare and dental expenses that will inevitably happen. 

Groceries – $616:

Grocery expenses of $616 are in line with the $500 to $600 we spend in a typical month. We’ve been eating a lot of steak and we restocked on some bulk staples from the Asian store during April. 

I’m still using Walmart Grocery pick up service several times per month along with visits to Aldi, Lidl, and Food Lion.

The Walmart grocery pickers put together your order for you and you just drive up and click a button on the Walmart app to get them to bring the order out to you. The best part is you pay the same low prices as they offer in-store to all their customers and there is no delivery fee.

If you want to try Walmart Grocery, you can take $10 off your first $50+ order with my referral link. Enjoy! 

 

 

Taxes – $300:

Quarterly estimated taxes for the State of North Carolina. We usually owe about $1,200 per year so we pay $300 every quarter. 

Utilities – $184:

We paid $45 toward the water/sewer/trash bill out of pocket plus another $90 from the health insurance cash back rewards. Our electricity bill was $73 for the month. The natural gas bill, which we covers our heating and hot water, was $67 in April which reflects heating for March. 

The next month should bring us more moderate utility bills as we won’t need huge amounts of heating or cooling during spring. 

 

Travel – $147:

We booked essentially all of our summer trip’s lodging during April. We will spend 46 nights on the road as we travel from North Carolina to California to Yellowstone and then back home to North Carolina. 

For lodging, we have 17 nights booked in Airbnb’s, 11 nights cash hotel bookings, and 18 nights in hotels booked for free using points. Most of the 11 nights of cash hotel reservations are “fully refundable” which means they haven’t charged my credit card yet (other than a 50% deposit for one place that came to $139 due in April). We’ll end up paying another $1,225 once we check into the various hotels, cabins, and lodges booked with cash. 

Cost breakdown:

• 17 nights Airbnb for $2,062 (using gift cards/credits bought in past years)
• 11 nights in hotels using cash for $1,364 ($139 already paid; $1,225 remaining)
• 18 nights in hotels using 243,500 hotel points (Choice Privileges, Marriott, and Hilton)

Average lodging cost (ignoring the 18 free nights) is $122/night. That’s not too bad given that we booked two hotel rooms or 2-3 bedroom airbnbs for a majority of our trip. We’re staying at budget hotels for the most part when we’re paying cash. But we got some nice airbnbs where available since we’ll stay in the airbnbs for longer durations. 

We booked three nights near Yellowstone in a nice $500+/night two bedroom hotel suite using only 32,000 Choice Privileges hotel points in total (cash value of the points is only $200 or so). Our next best alternative was paying $250+ per night in cash for one room in a not particularly nice Super 8 motel that would have been a longer drive to Yellowstone. 

If you want to get in on the travel hacking points and miles game, and you have a small business you can get $750+ in cash back bonus or travel with a new Chase Ink business card. 

Our total April travel spend of $147 included:

• $139 for the 50% deposit on 1 cabin for 2 nights
• $2 for a 3 day timed entry ticket to Yosemite National Park (heads up: several parks require buying advance timed entry tickets this year even if you have an unlimited entry park pass!!)
• $6 for convenience fee to pay state taxes with a credit card – we get lots of miles/points from using credit cards so I call this $6 convenience fee “travel spending”

 

Automotive – $118:

The battery in our van died last month. RIP. I found out that the best two places to get a new battery are Walmart and Costco. Costco offered a lower quality battery at a slightly cheaper price. I opted to pay a little more and get the high end battery from Walmart for $118. 

The battery that died came with the van when we bought it five years ago, and the date label indicates it was 6 years and 1 month old. That’s pretty good longevity for a cheap 2 year warranty battery, especially considering we often leave the van sitting in the driveway for a week or more at a time.

I’m very glad the battery died while we were at home instead of somewhere halfway across the country in the middle of nowhere. The battery was on my list of “maybe” preventive maintenance items to knock out before we left, and fortunately it made the decision for me by going kaput very suddenly. It was mildly inconvenient to cancel our planned afternoon walking at the lake, but much better than being stranded somewhere unfamiliar. 

 

Electronics – $108

We upgraded Mrs. Root of Good’s cell phone to a refurbished Pixel 3. It’s a good choice for her since she likes photography but doesn’t always want to lug around the DSLR camera. It was $99 plus tax from Woot. After ordering one refurbished Pixel 3 from Woot and realizing it was totally busted junk, I decided to order a four pack and pick the best one (return shipping is free). That strategy paid off and we have a near-mint Pixel 3 (with 87% of the original battery life) for a very low price. 

General Merchandise – $106:

Ah “general merchandise” – the bottomless pit of spending. Basically “miscellaneous”. We kind of stopped caring about spending money on random stuff since the portfolio keeps going up in value and we have all these stimmies. This $106 is mostly Mrs. Root of Good’s birdfeeder-related purchases.

Don’t tell her I said that. 

Gifts – $44:

We purchased some rigid foam swords for our son’s birthday plus some other gifts for $44. 

Cable/Satellite – $18:

We pay $18 per month for a local reduced rate package due to having a lower income and having kids. 30 mbit/s download, 4 mbit/s upload.

Home Maintenance – $14:

Our kitchen towel rack broke so I bought a new one for $5. 

The other home maintenance craziness was beaver-related. Our garden hose sprayer disappeared in the middle of winter along with the connector from the end of the hose! Based on the beaver-like bite marks on our hose at the tip where the nozzle was severed, plus the frequent thievery from our wood pile and trees we suffer at the hands of our backyard beavers, we have identified them as the likely culprit. 

It doesn’t really make any sense why the beavers would chew through our garden hose and carry off the hose segment and sprayer but… there are bitemarks. Forensic evidence does not lie. 

We bought a replacement hose coupling connector from Amazon for $9 and fixed our very nice $40+ contractor grade garden hose instead of replacing the entire hose. 

Gas – $0:

No gas this month! I’m sure we’ll be spending a ton of gas on our road trip across the USA! 

Total Spending for 2021 – Year to Date

Our spending totaled $7,459 for the first four months of the year. This is almost $6,000 less than the $13,333 we budgeted for four months of spending in our $40,000 annual early retirement budget.

So far in May our spending is picking up. I just paid our annual home insurance bill and semi-annual auto insurance bill which was almost $1,000 total. In June and July, we’ll have a lot of dining out expenses, gas, and over $1,000 in lodging expenses for our summer road trip.

In the intermediate term over the next 6 to 24 months, we’ll have to buy a second car and start paying for college. It’s looking like college bills won’t be so bad due to a combo of financial aid and kids doing AP classes, college transfer classes, and community college for a year before university. Some more thoughts on college spending here. 

Monthly Expense Summary for 2021:

Summary of annual spending from all years of early retirement:

Net Worth: $2,667,000 (+$19,000)

Another month of gains! The investment portfolio keeps on doing its thing, and we keep getting a little bit richer each month. 

It’s nice to see our early retirement plan working out so well. Since I retired, our net worth has roughly doubled. This means we really don’t need to worry about spending money on things. 

Even if we see another 50% market crash, we’ll still have plenty of funds to cover our $40,000 per year budget at a very reasonable withdrawal rate. 

Life update

Things are looking up for us. Three out of five in our household are fully vaccinated so far, and the fourth one is schedule for a vaccine next week (pending approval of the EUA by the FDA). The last kid should be eligible in September or October. 

Case counts across the nation continue to drop every week. I think we are past the worst of it. However, I’ve felt that way several times over the past 15 months! 

We are excited to get out of the house and get back to traveling. The trip is definitely happening. Almost all of it is refundable, but we are committed. School gets out in early June and we hit the road the day after high school exams end. 

But even sooner, I’m traveling a couple hours north to speak at CampFI Midatlantic on May 28-31st. This year’s camp will be held about 45 minutes outside Richmond, Virginia. If you’re interested in going, tickets are still available.  I’ve talked to the organizer and I’m confident he can pull off the camp in a reasonably safe manner for attendees. 

That’s it for this month. See you all next month! 

What are you looking forward to this summer?

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