December 2021 Early Retirement Update – New Year’s Edition

Another year all wrapped up neatly with a bow on it! Where does the time go?

We had a great 2021, both financially and personally. We managed to squeeze in a bunch of travel in spite of global difficulties. And we were able to relax at home a ton as well. Another glorious year of early retirement! 

For those wondering, we were able to embark on our Christmas cruise successfully. After two years of being landlocked and skipping international travel, we finally got back to the crystal clear Caribbean waters and enjoyed a warm week floating around the islands.  

Financially, December was an incredibly bountiful month for us. Net worth jumped $115,000 to end the month at $2,830,000. Income during the month totaled $21,970 while expenses were a mere $3,312 during December. 

Let’s jump into the details from last month.

Income

Investment income totaled $19,932 in December. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. The final quarterly payment in December is always the largest for the year. As a result, we had an incredibly high investment income last month. Here’s more on our dividend investments.

Blog income totaled $1,289 for the month. I think this is the “new normal” for blog income. The trendline on my blogging income has dropped as I have posted less frequently over the past several years.

My early retirement lifestyle consulting income (“consulting”) was $0 in December. I only completed one consulting session of two hours in length during the month, with the payment arriving in the first couple of days of January, 2022. The slowdown worked pretty well since we were traveling for about a third of the month and needed time to pack beforehand and recuperate afterwards. 

Tradeline sales income was $525 in December. 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 $525 total payment, $100 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!

My total Tradeline Sales in 2021 were $6,650 (about $5,800 after backing out the referral bonuses I received thanks to the visitors of this blog). 

For December, my “deposit income” totaled $63. Of this total, $43 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” included $10 from submitting grocery rebates (only available in Alabama, New York, and North Carolina). The other $10 of deposit income came from a $10 promotion on my Fidelity credit card for spending $1+ on any type of insurance. 

My Youtube earnings were $160 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 a few main videos that bring in most of the traffic (and revenue!).

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 December expenses:

 

In total, we spent $3,312 during December which is almost exactly the amount of our regularly budgeted $3,333 per month (or $40,000 per year). Taxes and Travel were the top two spending categories for last month. 

Detailed breakdown of spending:

Taxes – $1,878:

Our annual property tax bill of $1,878 came due. Yes, that’s the annual figure and not a monthly payment in case any readers in high cost of living areas were confused. 

Travel – $611:

I loaded up on $300 worth of Airbnb gift cards during December. Best Buy ran a 10% off sale and I stacked that with “$25 off of a $250 Best Buy purchase” offer from Paypal. The total cost after discounts and promotions was $245. 

We typically use several thousand dollars in Airbnb credit during a normal summer vacation, so these credits won’t go to waste. Right now we have accumulated almost $4,000 in airbnb credits.

The remaining $366 in December Travel spending came from our cruise. Ancillary cruise costs include:

• Gas from Raleigh to Miami and back
• Parking in a remote city park and ride lot
• Ridiculous surge pricing Uber to the cruise port ($18 for 1.5 mile/7 minute ride)
• Public transit to/from remote city parking lot
• 1 night hotel suite in Vero Beach, FL (a couple hours north of Miami)
• 2 sets of Icees for the family (they were $0.79 each!!)
• On-board cruise gratuities (these were close to zero due to the on-board credits we received)

Overall the cruise was a blast. The boat sailed at 23% of their normal capacity so it was rather empty compared to all the other cruises we’ve been on. The public health measures weren’t too bad and mostly helped keep us safe. 

On our seven night cruise aboard the MSC Divina we visited:

• Belize City, Belize
• Roatan, Honduras
• Costa Maya, Mexico
• Ocean Cay, Bahamas (MSC’s private island)

The weather was perfect. Not too hot and never too cold. Minimal rain. 

The biggest disruption to our cruise experience was lackluster evening shows. They usually have excellent production quality broadway style shows most nights along with acrobatics. This time around the shows were disappointing in the aggregate.

Several shows consisted mainly of the two opera singers doing their thing instead of 25+ singers and dancers and gymnasts going all out for us. I assume the performers got hit with the ole ‘rona half way through the cruise and they had to isolate after that. 

We did get a $100 per cabin refund because the “mini club” was closed, presumably due to the ‘rona hitting the staff. We didn’t use the kids club so it wasn’t an inconvenience for us at all. Just free money! We used this to mostly offset the suggested gratuities on board (along with some other on board credits).

What’s next on the travel docket for us?

We ended up cancelling our spring break 2022 cruise. The cruise line is getting less flexible with cancellations and what you are entitled to if you do cancel last minute. Given everything going on, plus the kids’ school schedule, the spring break cruise wasn’t quite worth it all things considered. 

Looking further out, we are in a holding pattern with our summer 2022 Eastern European vacation planning. We definitely want to go but definitely don’t want to lose hundreds (or thousands) on non-refundable fees and deposits. 

So far, we are keeping everything fully refundable. I have the plane tickets and a month-long rental car booked. I can cancel them all with no penalty. We’ll probably start booking Airbnb lodging in January assuming everything gets back to normal-ish by the end of the month.

Such is life during these unpredictable times. I guess our alternative would be “just stay at home” but we’ve done enough of that already. So if we can travel safely and in a reasonably predictable manner, we will continue to do so when feasible.

Groceries – $541:

Our grocery spending is slowly trending back down toward the $600 per month that we used to spend a year or two ago. We only spent $541 during December. 

Part of the lower spending last month is due to us being gone for over a week on our cruise. 

Inflation is definitely hitting our grocery spending. We are seeing more and more items that are marked up by 20-50% versus pre-pandemic levels. 

Utilities – $230:

The total utility spending was $230 last month.

We spent $85 on the electric bill and $66 for the water/sewer/trash bill. The natural gas bill, which provides heating and hot water, totaled $80 for last month.

Our heating bill was about half of what it normally is during this time of year. We were out of town for a big chunk of December, which saved us a lot. And it was abnormally warm the last week of December. Between our vacation and the heat wave, we didn’t use the heat very much during the second half of December.

In fact, it was so hot for a few days that we were struggling to keep it cool inside the house. We almost had to turn the air conditioning on! Yeah I know, southern people problems….

Healthcare/Medical/Dental – $40:

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. I paid for December in a previous month, so there is no cost for December. 

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!

Our new premiums for 2022 are $0 per month since we went with one of the two cheapest silver plans. Same insurance company as 2021, same healthcare provider network. Nothing changes except small tweaks to copays, deductibles, and out of pocket max. And we still get $1,000 cash back for participating in the insurer’s rewards program. 

The $40 shown in this month’s medical/dental expense is our dental insurance for 2022. For the adults, we’ll spend about $20 per month ($240 per year) for a basic dental insurance plan. Our routine dental exams and cleanings with the occasional x-ray have increased in price recently. The cost is now $125 (no x-ray) or $170 (with x-ray). Or it was. Maybe prices go up again before our next dental visit!

With two routine visits per year, we will spend almost $300 per person. A $240 insurance plan provides those same services for free. And we get some minimal level of insurance if one of us needs a filling during the year. 

Automotive – $14:

I went on a mini-shopping spree and bought a new cabin air filter for $9 plus some replacement rubber parts for the exterior of the van from Ebay. These rubber components melted/disappeared over the years so it’s time to replace them. 

Gas – $0:

We didn’t spend anything on routine refueling of our minivan during December. However we did buy a bunch of gas while driving to/from our cruise in Miami. I have included all of those gas purchases in the “Travel” spending 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 (all 12 months)

Our spending totaled $31,740 for all of 2021. This is about $8,000 less than our $40,000 annual early retirement budget.

The $31,740 spending figure is just $700 higher  than the federal poverty line for a household of five. But I think an average working family would need a $100,000 income to approximate our lifestyle. So are we living a very comfortable life? Or are we struggling along at the poverty level? I’ll leave that question for you to ponder! 

Overall, 2021 was a pretty benign, ordinary year for our expense ledger. We did a fairly normal amount of travel (about two months in total). Maybe in a good year we would have done three months.

College costs haven’t really cranked up yet and are unlikely to do so until 2023. We dined out slightly less than we normally do, but that category of spending was never all that high.

We replaced some computers and upgraded a couple of cell phones, which is fairly normal since we’re buying devices for five people. 

Nothing major happened to our home or car, so maintenance costs were very low ($230 and $365 respectively, with most of the auto costs being taxes and various government registration/inspection fees). 

The only real “surprise” in 2021 was paying for a dental crown for Mrs. Root of Good. Even that is in the budget and not much more than rounding error against a $40,000 overall annual budget. 

Thoughts on Spending in 2022

Within the next month, we hope to continue our travel bookings for summer 2022 in Europe. We’ll probably spend around $4,000 to $5,000 on lodging and $1,000 for a rental car and some bus tickets. The first $4,000 of Airbnbs will be covered by gift cards in our possession already. As a result, the remaining cost of our 2022 summer trip might not be that significant. 

College costs look to be minimal throughout 2022, since the FAFSA results indicate we’ll get enough to cover the full cost of community college plus books starting in the fall of 2022. College costs may increase beginning in 2023, however we have dedicated 529 savings that should cover most of the costs. 

We have temporarily abandoned the search for a second car given the prices in the used car market today and our changing family needs for a second car. We will most likely need a second car in August due to one of the kids attending community college full time. So I’m penciling in a $8,000 to $12,000 used car purchase for 2022. And crossing my fingers that prices don’t climb even higher in the next 8 months.

Monthly Expense Summary for 2021:

• January – $2,577
• February – $951
• March – $1,483
• April – $2,450
• May – $2,418
• June – $2,447
• July – $2,128
• August – $2,091
• September – $4,481
• October – $3,047
• November – $4,361
• December – $3,312

Summary of annual spending from all years of early retirement:

Net Worth: $2,830,000 (+$115,000)

After a $49,000 drop in net worth in November, we had a spectacular $115,000 gain in December! Our net worth ended the year at $2,830,000.

We are up $325,000 compared to December 2020’s $2,505,000 net worth.

The topline growth of $325,000 year-over-year sounds good but about half of that net worth growth was eaten away by the 6.8% inflation (based on CPI) that we all experienced during 2021. It’s still a gain in real terms, so I’ll take it! And we enjoyed another year of good living! 

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.

Life update

Wow, what a year to look back on! I guess I’ll focus on our travels since that’s some of the more exciting highlights of our life. 

We had a busy summer and visited a lot of cool places across the midwest and western United States during our six week road trip: 

Hopefully I’ll get the rest of the road trip articles posted soon. 

We capped off our 2021 travels with a cruise to the Caribbean. And all this while dodging waves of the pandemic. 

I’m hoping 2022 brings us a little more stability and predictability compared to the last two years, because I don’t think they have been easy for anyone. 

In the meantime, we’ll just keep on muddling through and making the most of each moment. 

Happy New Year and best wishes for a healthy and prosperous 2022 for you! 

What does 2022 have in stock for you? Any exciting money or life moves you are planning this year?

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