September 2021 Early Retirement Update – Back to Traveling Edition

Welcome back to a slightly belated monthly update post! Fall is in full swing here in North Carolina and I’m loving it. It’s the best time of year here. I’ve spent a lot of time enjoying the cooler mornings by sitting on the back porch drinking coffee and reading while watching the backyard wildlife. 

Between the porch-sitting, the occasional bike ride in the woods, and the Netflix-watching, my schedule is pretty full these days. 

During September, we have been busy planning and booking a lot of travel for 2022. That takes up a lot of time too. Hopefully these travel plans work out better than they did in 2020! 

Financially, last month was a mixed bag. Net worth dropped by $38,000 to end the month at $2,687,000. Income during the month totaled $10,061, which was much higher than our $4,481 spending during the month. 

Let’s jump into the details from last month.

Income

Investment income totaled $7,204 in September. 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 high investment income last month. Here’s more on our dividend investments.

Blog income totaled $1,056 for the month which was a little lower than average. One advertiser switched up their income reporting system and payment system so the September payment will be delayed until October. 

My early retirement lifestyle consulting income (“consulting”) totaled $750 in September. This income represents five hours of consulting during the past month. I sit down at my desk and strategize with folks a few times a month and this covers my family’s monthly grocery bill. Not bad! 

Tradeline sales income was $875 in September. I ramped up my tradeline sales last year and discussed it in a bit more detail in my October 2020 monthly post and in my July 2021 monthly post. Of that $875 total payment, $400 came from referrals that signed up with Boost Credit 101 and mentioned “Root of Good” as a referrer. Thanks to all of you that did so! And good luck making money with tradelines! 

For September, my “deposit income” totaled $46. Of this total, $15 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. 

The remaining “deposit income” came from a $31 cash back credit from routine monthly spending on a cash back credit card. 

My Youtube earnings totaled $128 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!).

For the second month in a row, our Youtube earnings are half of what they used to be the past couple of years. I don’t do much to promote my channel or keep it fresh, so I am not surprised at declining revenues. In fact, I’m still shocked that I hit the Youtube lottery of success at all! 

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 September expenses:

 

In total, we spent $4,481 during September which is about $1,100 more than our regularly budgeted $3,333 per month (or $40,000 per year). Travel and groceries were the top two spending categories for last month. 

Detailed breakdown of spending:

Travel – $2,634:

As you can see, we’ve been busy spending money on future trips. 

We spent $571 on various gift card deals to obtain $695 worth of Airbnb gift cards. Best Buy, Amazon, and Raise.com had promotions that we took advantage of during September to snag these deals. We typically use several thousand dollars in Airbnb credit during a normal summer vacation, so these credits won’t go to waste. 

The biggest chunk of travel spending in September was the partial payment on three different cruises. 

We paid $1,261 to complete the payment for our December cruise over Christmas break. We’ll drive down to Miami and enjoy the Caribbean for a week while the kids are out of school. 

We also booked two more cruises and paid a $398 deposit for each cruise. One cruise departs from Miami over spring break. The second cruise departs from Europe next fall and travels around the Mediterranean to several ports in Europe and northern Africa.

We may cancel the 2022 European cruise unless they relax the requirement to travel only with official tour groups while ashore for public health reasons. I have no interest in a guided tour and would rather venture on my own (cruise or no cruise!). 

The last bit of travel spending came from paying my estimated state income taxes to help meet the spending requirements on my credit card. The credit card fee totaled $6 for the $300 estimated tax payment. I treat the $6 fee as a “travel” expense since the miles and points I earn generally go toward travel redemptions. 

Groceries – $872:

Our grocery spending dipped slightly compared to August. We “only” spent $872 last month for groceries. We routinely spent $500 to $600 per month over the past few years.

Feels like inflation is here to stay. Plenty of things are way up from where they used to be.

Beef, for example, is up 30-40% from what we were paying six months ago. My baseline for a good sale on a cut of lean beef was $3 per pound. Now $4 per pound is the “new normal”. Similarly, $3 per pound is the new sale price for lean ground beef, whereas it was $2.00 or $2.50 not too long ago. 

A lot of other items are only up a mere 10% or so. And some items haven’t moved a penny! It’s hard to say what our food inflation number is exactly, just because the kids are getting older and eating more, and we don’t buy the exact same thing year after year. 

We don’t really try to conserve money on groceries as much as we used to, so this might be a case of “lifestyle creep” as well. 

In any event, I expect we’ll continue to pay $800-900 per month long term unless food inflation magically disappears. 

Utilities – $342:

The total utility spending was $342 last month.

We spent $178 on the electric bill, $21 on the natural gas bill, and $143 for the water/sewer/trash bill. 

The electric bill should be lower for the next six months or so since we won’t be using the air conditioning very much throughout the cooler parts of fall, winter, and spring. 

Taxes – $300:

$300 paid for North Carolina estimated income tax each quarter. 

General Merchandise – $137:

This $137 of general merchandise spending consists of random things we bought throughout the month from Amazon and Walmart. Included in this catch-all category are things like bird food, toys, and cosmetics. 

Home Maintenance – $122:

We spent a lot on tools to cut with. $108 went toward a 40v lithium battery powered 16″ chainsaw. We spent another $14 on a machete and hand axe at Harbor Freight. 

Now we will be prepared for the zombie apocalypse. And we’ll be ready to trim the trees, bushes, and undergrowth on our lakefront and the islands in the lake. 

Gas – $39:

I topped off the minivan. It’s hurricane season, and I want to be prepared. Just in case we have to flee for higher ground.

Restaurants – $23:

I bought a $25 discounted gift card for a pizza place from Raise.com (discount was almost $3 plus I got cashback on the purchase). 

Entertainment – $15:

Two bottles of cinnamon flavored vodka were $15.

I place hard liquor purchases in the “entertainment” category. Beer and wine go in the “grocery” category. 

Healthcare/Medical/Dental – $2:

Our current 2021 healthcare premiums are $1.15 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. For some reason Personal Capital rounded the $1.15 up to $2. 

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!

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 $20,800 for the first nine months of the year. This is about $9,000 less than the $30,000 we budgeted for nine months of spending in our $40,000 annual early retirement budget.

We are still on track to finish the year well under our $40,000 yearly budget. However, we’ve already spent quite a bit in October for travel related expenses like two new passports and airline taxes and fees on some award redemptions. 

In the intermediate term over the next 6 to 24 months, we’ll have to buy a second car and start paying more 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. 

It’s looking like we may finish the year at roughly $30,000 in annual spending, in spite of higher prices in some categories like groceries. Our travel budget has been depressed during 2021 simply because we had to cancel multiple cruises already and didn’t want to book trips for a multitude of reasons. Hopefully 2022 will be more open and we can be a bit more spendy! 

Monthly Expense Summary for 2021:

Summary of annual spending from all years of early retirement:

Net Worth: $2,687,000 (-$38,000)

We had a decent sized dip in our portfolio during September to leave us $38,000 poorer. Our net worth closed the month at $2,687,000, which is still more than plenty to support our paltry $30,000 to $40,000 in typical annual spending. 

If we use the higher spending figure of $40,000, then we are only spending about 1.6% of our investment portfolio. 

For the curious, our net worth reported above includes our home value (which is fully paid off). However, please note that I don’t consider my home value as part of my portfolio for “4% rule” calculation purposes. I realize folks ask me about that every month so I just wanted to state that here for clarity.

I confess that I didn’t really pay close attention to our portfolio value throughout the month. As I progress through the years of early retirement, I find that I care less and less about daily or monthly fluctuations in our net worth. 

As long as we have “way more than enough” then it doesn’t really matter if we lose $100,000 in a single day.

The portfolio goes up. The portfolio goes down. It might stay down for a year or two.

Or more.

But in ten years, there is a high probability that our investments will be worth more than today. That’s just the nature of owning a portfolio of companies that tend to grow their earnings over time. 

Life update

Things are looking good! We booked a ton of travel last month, with the hopes that 2022 will be much easier for us travelers. 

I’m keeping everything fully refundable for now, since we don’t know what will happen 3, 6, or 9 months out. 

Our big summer 2022 plans are slowly coming together. We just booked plane tickets to spend a couple of months in Europe. We fly into Zagreb, Croatia in mid-June and return home in mid-August from Budapest, Hungary. We’ll take a detour into Slovenia for a few weeks to enjoy the Julian Alps and beautiful rivers and lakes we discovered on our last trip over there in 2017. 

After a busy road trip in summer of 2021, we are ready for a slower pace of travel next summer! 

Planning the trip is half the fun. Right now we’re going through all the cool places to visit and narrowing down the list to something that we can handle at a slow pace over the course of a few weeks in each country. We’ll probably book weekly Airbnb rentals throughout our stay so we can spread out and relax in between the sightseeing. 

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

Do you feel like things are getting better? Or getting worse? 

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