July 2021 Early Retirement Update – Back Home in Raleigh!

Welcome back to Root of Good! We arrived in Raleigh two weeks ago after spending most of the summer driving cross country for our road trip. I can’t believe summer is almost over! One of our kids starts college half time in one week and all three will commence regular classes in two weeks. When they said “time flies when you’re having fun”, they didn’t lie! 

We’ve spent the past two weeks getting situated in Raleigh and relaxing after a busy but fun summer vacation. So far it looks like all the kids will be attending class in person this fall. For us adults, that means we will have a lot more free time between the hours of 9 am and 2:30 pm. This will be quite a schedule adjustment compared to the past 18 months of the kids being here almost all day every day. 

Financially, last month was pretty decent but not overwhelmingly positive. For the second month in a row, our stock investments went down very slightly. Net worth dipped by $9,000 to end the month at $2,692,000. Income during the month totaled $2,888, which was slightly higher than our $2,128 spending during the month. 

Let’s jump into the details from last month.

Income

Investment income totaled $259 in July. 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 small amount of investment income last month. Here’s more on our dividend investments.

Blog income totaled $1,441 for the month which was a fairly normal blog income for one month.

My early retirement lifestyle consulting income (“consulting”) dropped to $0 for the month of July even though I had a two hour consulting session last month. The consulting fees didn’t hit the account until August so I’ll book the revenue for that month. After a busy June, it was nice to have a break in July! 

Tradeline sales income was $900 in July. I ramped up my tradeline sales last year and discussed it in a bit more detail in my October 2020 monthly post. The company I use, Boost Credit 101, has temporarily opened enrollment for new tradeline sellers for the month of August. If you are interested in selling tradelines too, here is some more info. 

Boost Credit 101 takes credit cards issued by Barclays, Discover, TD Bank (Redcard/Target Card only), Citibank, Huntington Bank, Synch (Care Credit only), US Bank, Elan, Amex (Amex-branded only and no charge cards), Capital one, PNC, NFCU, and Chase.

I’ve used Boost Credit 101 for almost a year and from my research and personal experience they are the best and most reputable tradeline selling company.

If interested in selling tradelines, please email investorsupport at boostcredit101.com and make sure to mention that “Root of Good” sent you their way if you want me to get a little referral bonus from them (or don’t mention me if you don’t want to!).

Include this info when you email Boost Credit 101:

1. Lender and card type: (e.g. Discover It or Citibank Double Cash) It can’t just be “Citibank Visa”
2. Opening date: (month and year)
3. Credit limit
4. The statement date: (aka closing date, this is not the same date as your payment due date)

Good luck with tradeline sales if you go that route. And thank you if you mention that “Root of Good” referred you to Boost Credit 101! 

Moving on to Deposit Income. My “deposit income” totaled $11 in July. This $11 came from cash back and incentive bonuses from the Rakuten.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 Rakuten through this link and make a qualifying $25 purchase through Rakuten, you’ll get a $10 sign up bonus. 

My Youtube earnings totaled $275 last month. Here is the channel for the curious. It’s random travel videos, birds, kids, and a couple of DIY videos. There are only two main videos that bring in most of the traffic (and revenue!). Based on several comments on this blog, apparently some folks doubt we make this much from Youtube. Which is funny. I also find it funny that we do actually make this much from Youtube. 

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 July expenses:

 

In total, we spent $2,128 during July which is about $1,200 less than our regularly budgeted $3,333 per month (or $40,000 per year). Travel and taxes were the top two spending categories for the month (just like in June!). 

Detailed breakdown of spending:

Travel – $1,035:

We spent 24 days on the road during July and spent $1,035 on travel expenses. I am including the groceries and restaurants we have enjoyed along the way in addition to gas, parking fees, and admission tickets. 

A breakdown of the travel spending for the month of July:

• Hotels – $0 (paid for in previous months and/or reserved for free with points)
• Gas – $600
• Groceries and supplies – $90
• Restaurants – $300 (plus another $65 worth of restaurant gift cards bought in the past)
• Parking and admission fees – $45

Since all of our lodging was booked in June or earlier, we didn’t pay anything for lodging last month. We did spend a total of $2,300 in the previous couple of months on airbnb stays and prepaid hotel bookings. We also booked 18 nights in hotels for free throughout our whole trip using 243,500 hotel points spread across the Choice Privileges, Marriott, Hilton, and Wyndham loyalty programs. 

Our best hotel point redemption was at the Ridgeline Inn in Gardiner, Montana. I used 8,000 to 16,000 Choice Hotel points per night to book a 2 room suite with full kitchen for six people. In total, the three nights we booked cost 32,000 points which are worth around $200 when valued at 0.6 cents per point. The cash rate was over $600 per night! 

When we checked in to the Ridgeline Inn, they profusely apologized that the two bedroom suite only slept four people (and not the six people I had booked under the reservation!). The sleeper sofa had mysteriously disappeared sometime after the room was photographed and listed on their website.

Wow, what?

I told them that I wasn’t really interested in one of my kids sleeping on the floor in a $600 per night hotel room. Maybe they could go find me an extra mattress to throw on the floor? Nope, no dice.

So then I said “how about you just give me a second room?”. No dice there either as they are all booked up! “Well okay, just put me on a waitlist and give me a call in my “suite” if you find an extra room. Ten minutes later the phone rings. By this time it’s almost 10 pm and we’re beyond tired after exploring Yellowstone all day and driving many hours.

Success! The frazzled front desk lady worked her magic and scrounged up a room in the “fully booked” hotel. So we ended up with a second room with two queen beds for all three nights. The room normally would have been $500 per night. But it was free for us. I figured my request for a second room for free was a pretty big ask but it worked. 

To summarize, we ended up getting $3,300 worth of hotel rooms for about $200 in Choice Privileges points (32,000 points in total). Best hotel points redemption ever?

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. No business? You can still get a Chase Freedom personal card with $200 in cash back when you spend $500. 

Gas was our biggest travel expense in July at $600. We drove A LOT. And gas was very expensive by American standards in California and a few other western states. Overall we drove 8,200 miles this summer and spent a combined total of $1,035 on gas. This works out to 12.6 cents per mile for gas.

I definitely feel like we paid more than $2.50 per gallon for gas on average which means our fuel economy was greater than 20 miles per gallon. Not bad for a 13 year old minivan!  The EPA says our minivan should get 19 mpg in combined driving and 23 mpg highway-only driving, so that sounds about right based on our experience. 

We spent $90 on groceries and supplies including some new sunglasses for two of us. The Bonneville Salt Flats were SUNNY! 

Restaurant spending totaled $300 (plus $65 of gift cards bought in previous months) which represents six “real” restaurant meals and some fast food. We also enjoyed the free breakfast buffets or grab and go breakfasts when they were available. 

We brought some non-perishable staples from home (in case you were wondering how five of us survived on less than $500 for all the food for more than three weeks of vacation).

The remaining $45 of travel spending in July came from various parking and admission fees. Our 4th grader got us into all the National Parks like Sequoia, Yosemite, Yellowstone, and the Badlands for free. But we had to pay $15 to get into the Antelope Island State Park in Utah and $10 to get into Mt. Rushmore National Monument. The Mt. Rushmore charge was technically a “parking fee” and not an admission fee but you have to pay it to get in unless you walk half a mile or more on a busy narrow two lane road with no sidewalk. We also paid $20 to park at the Los Angeles Hilton. 

 

Taxes – $693:

I found a deal on prepaid Visa gift cards and bought $750 of them for $693. I’ll be paying the quarterly estimated taxes or annual property taxes with these cards. 

Groceries – $168:

The $168 we spent on groceries in July represents the cost to restock our fridge and pantry during the last week of July. We intentionally consume all the perishables before we leave on our big trip each summer. So after being gone for 7 weeks, we had quite a long grocery list!

Going forward we should be back to our routine $500 to $600 per month in grocery spending. 

As a matter of personal accounting, I categorize groceries purchased while on vacation as a “travel” expense, so our grocery total for July really only covers the one week of July that we were actually in Raleigh. 

Utilities – $38:

Our utility bills were next to nothing in July because we weren’t home during the month covered by these bills. We paid $38 just to keep the connections active for the month even though we didn’t consume any water or gas. And electricity consumption was under $10. 

In August we should be back to spending a few hundred dollars on utilities because it is really hot here in North Carolina and we have the air conditioning cranked up!

Home Maintenance – $89:

While we were out of town, we paid to have our lawn mowed twice for a total cost of $80. 

We spent the remaining $9 of home maintenance expense on a replacement toilet flush valve. Every summer when we leave for a couple months, we shut off the water to our house to prevent extensive water damage from potential leaks in the plumbing. As a result we occasionally have a small plumbing issue we discover upon returning home. My theory is that the lack of water leads to the seals drying out in our toilets, faucets and fixtures. 

This year our toilet flush valve was screaming and yelling in a high pitch. I gave it a few days to see if the seal would heal itself and the issue would go away. It did not. End result: $9 for a Fluidmaster 400A toilet flush valve. That fixed the problem. 

My forensic analysis of the failed toilet valve indicates some plastic spokes inside the column of the valve had failed at some point. Probably due to a manufacturing defect when the raw plastic was injected into the mold to form the spokes. A couple of these broken spokes would vibrate back and forth along the hairline fractures at a high frequency and “sing” (aka generate a really loud and annoying whistling noise).

In any event, it’s a $9 easily replaceable part. I threw the old one in the trash after installing the new toilet flush valve. 

I briefly considered hiring a plumber to swap out the valve since our net worth keeps on growing and we have to spend the money somewhere. Then I realized it would probably be more of a hassle to get a competent plumber or handyman to show up and do the job right instead of just doing it myself. And at $100-150 labor expense, it wouldn’t have been cheap. For the time being, I’ll keep on doing these simple DIY repairs. 

General Merchandise – $68:

A bunch of miscellaneous stuff made up this $68 worth of “general merchandise”. This category is the catch all for everything we buy at Walmart, Amazon, or Dollar Tree that isn’t groceries or some other obvious category. Or a mix of multiple categories of expenses that isn’t worth breaking out item by item. 

Automotive – $30:

After driving 3,000+ miles across the country and around Colorado, Utah, and Arizona, we were due for an oil change in Las Vegas. I found a local Meineke to swap out the oil in our trusty minivan for a reasonable $30 charge. 

Now that we are back home after an additional ~5,000 miles, we are almost due for an oil change once again.

I also took the van in for a routine free tire rotation and balance at Discount Tire while in Las Vegas. Normally they do a great job. This time around I think they failed to properly reinstall the front right hubcap. Somewhere between Las Vegas and Sequoia National Park in California (by way of Los Angeles), we lost a hubcap! It’s possible that someone stole our beat up old hubcap, but very unlikely. 

I don’t know what hubcaps cost but $30 feels about right for some basic replacement hubcaps. Our old hubcaps made it through 13 years and look pretty beat up anyway. No big loss there!

Overall our trip-related auto maintenance/repair costs will be about $133:

• oil changes x2: $70
• windshield crack repair kits (bought in June): $33
• new hubcaps: $30

Healthcare/Medical/Dental – $10:

Our current 2021 healthcare premiums are $1 per month thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$45,000 per year Adjusted Gross Income. The benefit of being “poor” on our tax return. 

The “American Rescue Plan Act” passed in March 2021 makes the Affordable Care Act premiums even cheaper through 2022. 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 just over $1 per month now! 

In May, we prepaid the health insurance for the entire summer which totaled $5. As a result, there is no cost for health insurance in July. 

The only actual medical expense for July was a $10 copay for an eye exam for Mrs. Root of Good. 

Gas – $0:

We haven’t bought any gas since returning to Raleigh, hence the $0 gas expenditure. All gas purchased while on our road trip went into the “travel” expense category. 

Cable/Satellite – $0:

We generally 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. Right now the cost of the internet service is temporarily reduced to $0 due to the “Emergency Broadband Benefit”. 

Total Spending for 2021 – Year to Date

Our spending totaled $14,229 for the first seven months of the year. This is about $9,000 less than the $23,333 we budgeted for seven months of spending in our $40,000 annual early retirement budget.

We are on track to finish the year well under our $40,000 yearly budget. We’re hoping to spend more on travel throughout the fall. We have prepaid for our October cruise but we still owe $1,400 for our family cruise over Christmas. Will these actually happen? Who knows! Two months ago everything looked fine. Today? I’m less certain about our travel prospects. 

In the intermediate term over the next 6 to 24 months, we’ll have to buy a second car and start paying for college. Used car prices are way up! However, 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: $2,692,000 (-$9,000)

After a year of strongly positive monthly gains, we are now treading water. For the second month in a row our net worth dipped slightly. This time, we lost $9,000 during July to bring our total net worth to $2,692,000. So far August is starting off on a strong note, so we may make back this $9,000 loss and gain a lot more! 

These monthly fluctuations are to be expected. Stocks don’t go up a steady 0.5% or 1% per month to generate those 9% average returns long term. In reality, we often see 2-3% monthly swings (up or down) which translates to big five figure and sometimes six figure monthly fluctuations in our portfolio. 

The good news is that we aren’t liquidating more than a couple percent of our portfolio in a given year. So we can ignore the short term fluctuations on the other ~98% of our portfolio! 

 

And the truth is that we have enough of a cash buffer and side income sources such that we are often okay without actually selling anything during the year (other than moving funds around for tax saving purposes). 

Instead, we live on the cash flow as it rolls in from various sources:

• dividends and interest from our taxable brokerage accounts
• “side hustle” income: early retirement consulting, this blog, and youtube
• tradeline sales
• credit card/bank/brokerage sign up bonuses and promotions

If at some point during the year our cash reserves get depleted, we can always sell a chunk of taxable investments to replenish our savings. 

Life update

Vacation is over. Back to work!

Just kidding. Back to relaxing, reading books, watching Netflix, riding my bike, and being a professional dilettante. And updating this blog occasionally. 

Looking back on our vacation, I’m glad we did it. We got very lucky with the timing. No travel restrictions and minimal masking requirements almost everywhere we went. It was like a vacation from the global health crisis! Now things aren’t as rosy and I’m not sure traveling will be as easy in the next few months. 

We’re already looking ahead to the summer of 2022 but don’t have a clue where to go yet. The only continent that hasn’t come up in discussions so far is Antarctica. So at least we are narrowing down the target geographies a little bit. That’s progress, right?

I’m looking at which countries will be the most heavily vaccinated and therefore more likely open to travel with few or no restrictions. My crystal ball is rusty but hopefully I can gain some clarity soon. It’s really hard to predict 10 months out given the fact that new variants can emerge and wreck any global progress we collectively make. 

In the meantime, our travel planning is in a holding pattern. We don’t even know if we’ll be on our cruise in less than two months, let alone traveling the globe in 10 months! 

I’d like to go somewhere cooler (temperature-wise) than the southwest USA. Eastern Europe from Hungary north to Poland and the Baltic Sea looks pretty interesting from a “chilling in cooler weather”, culture, and sightseeing perspective. And factoring in vaccine prospects, Europe seems to be well positioned for being open in summer of 2022. Time will tell! 

Right now, our household is getting ready for school. Our kids are returning to 4th, 10th, and 11th grades this year. This will be the first time they are attending school in person since March 2020! Our 11th grader is going half time to community college and half time to high school. The community college classes start in less than one week! 

The other kids will have back to school orientation in the next two weeks. And we are scrambling to complete all the routine doctor and dentist appointments before school starts. 

Busy times! But at least I don’t have a day job, so the rushing around isn’t too bad. 

Okay, that’s it for me for this month. See you next time! 

Summer is coming to an end already??!! How will you make the most of it? 

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