June 2022 Early Retirement Update – Cheers from Europe Edition

After a busy month of traveling in Europe, I finally have a pause in the schedule to pull together another monthly update. We spent the first three weeks of our vacation in Croatia. Then we traveled a couple of hours north where we stayed in the middle of the Julian Alps in northwestern Slovenia for two weeks.

As of this writing, we have returned to Croatia for a week of relaxation at a farm stay in a little village in the mountains. Then we head to Hungary for a couple of weeks before returning to the United States.

It has been a busy summer so far, but we have seen a lot of cool stuff and checked off some bucket list items. In Slovenia, we revisited some favorite places that we visited on our last trip to Slovenia five years ago (covered in two previous blog posts on Ljubljana, Slovenia and the Julian Alps).

Financially, we had a month of mixed results. Our net worth dropped sharply due to a downturn in the stock market. By month end, our net worth dropped by $177,000 to end the month at $2,593,000. Cash flow presented a prettier picture. Our income in June was rather high at $12,743 while expenses remained moderate at $3,782 for the month.

Let’s jump into the details from last month.

Income

Investment income totaled $9,875 in June. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. As a result, we had a very large amount of investment income last month. Here’s more on our dividend investments.

Blog income totaled $554 for the month. Last month’s blog income was lower than normal but July’s blog income should be higher. 

My early retirement lifestyle consulting income (“consulting”) was $957 in June. These earnings came from 5.75 hours of consulting work during the month. July consulting income will be a lot lower because I had to postpone some work due to really bad internet connections at our Airbnb’s in Europe so far. 

Tradeline sales income totaled $175 in June. This is lower than the past couple of months but still a nice chunk of change for minimal effort. I ramped up my tradeline sales in 2020 and discussed it in a bit more detail in my October 2020 monthly post and in my July 2021 monthly post. 

For June, my “deposit income” totaled $20. This income comes 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. 

I didn’t receive any income from Youtube in June. Youtube only pays out when you exceed $100 in accumulated revenue. Recently, my Youtube earnings have been just under $100 per month on average, so I’ll be getting paid a bit under $200 every two months.

Here is the Youtube 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!).

The final $1,160 of income for June came from credit card bonuses. I cashed out $1,060 in rewards from our new Capital One Venture X credit card. This was the $1,000 sign up bonus plus $60 for the spending I put on the card. I also cashed out $100 in cash back earned from a US Bank card. 

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 June expenses:

 

In total, we spent $3,782 during June which is about $400 more than our regularly budgeted $3,333 per month (or $40,000 per year). Travel and Utilities were the top two spending categories for last month. 

Detailed breakdown of spending:

Travel – $2,842:

We are traveling at the moment, hence the much higher than normal travel spending. 

The bulk of the travel expenses came from the $1,520 rental car fee. We booked a rental car out of Budapest, Hungary and then paid several hundred dollars for the rental car company to deliver the car to us in Zagreb, Croatia. So we are basically doing a one way rental from Zagreb to Budapest.

I had the option to take a 5 hour bus ride to Budapest, pick up the car, and then drive back to Zagreb to reunite with the rest of the family. After paying for gas, tolls, and an extra rental car day, the USD $335 delivery fee didn’t seem so steep, so I chose the easy way. 

For our 37 day rental, we ended up paying $41 per day including the delivery fee. We initially booked a slightly cheaper category of rental car. And at the last minute they said they were “all sold out” of that model, and “upgraded” me for a small fee to a “much larger SUV”. It’s basically a compact SUV by American standards and just barely big enough to hold our minimalist luggage. But I paid the slightly higher price because I didn’t have much of a choice at the last minute, when daily rental car rates were $250/day in Zagreb. 

The rental car makes our vacation so much more relaxing compared to relying on public transit. Where we’ve been in the countryside, there is generally some minimal level of bus service. But the bus only runs twice per day (9 am and 4 pm, for example) or every 2-3 hours. So it’s incredibly inconvenient given the alternative of paying $41/day plus a little bit for gas to go wherever we want whenever we want. 

Other than the rental car, the next biggest expense was for groceries and restaurants. I didn’t break out the food expense separately because a lot of the transactions were paid in cash withdrawn from an ATM. However, it appears to be about $900 spent on groceries and dining out. But that overstates the cost a bit because I withdrew too much money while in Croatia and we are still spending the last bit of that right now (since we returned to Croatia for a week in July). 

We also paid about $150 for various transit tickets, uber from the airport, parking, tolls, and museum/park admissions (which were minimal). Plus another $54 for round trip cable car rides up and down the Sljeme Mountain in Zagreb (about 3,000 feet elevation gain over the course of the 16 minute ride). 

Gas for the rental car totaled $70 in June. We’re getting around 40 miles per gallon so the gas costs are actually cheaper per mile here in Europe than it would be at home in the USA driving our 21 mpg minivan. Converted to dollars per gallon, we paid $6.50 to $6.80 per gallon for 95 octane gas over here. So just a bit more than what folks in high priced California cities were paying at the same time period for premium fuel.

When we go to Hungary in a few days, we’ll be paying about USD $4.50 per gallon thanks to a fuel subsidy for Hungarian-registered cars (like our rental car!). 

The last travel expense was a big one. We paid $200 in total for 2-day tickets to Plitvice Lakes National Park in Croatia. It was nice to have two days there instead of just one day. That way, we could take our time to enjoy the scenery instead of rushing through the park along the lakeside trails. We saw plenty of guided tours on what appeared to be a forced march through the park, with the tour guide yelling “mush mush mush, little doggies” the whole time. Okay, the tour groups didn’t get mistreated that much but I wouldn’t want to be on their tours!

If you are interested in getting free travel from your credit card like I do, consider the Chase Sapphire Preferred card (my referral link). Right now the Sapphire Preferred card offers 60,000 Chase Ultimate Rewards points that can be used to book $750 worth of travel. Or transfer the points to a ton of different airline frequent flyer programs and book a free trip to Europe. Or cash out the points for a $600 check and buy whatever you want! The card also has a lot of nice travel benefits as well.

Utilities – $333:

The total utility spending back home in Raleigh was $333 last month.

We spent $169 on the electric bill and $135 for the water/sewer/trash bill. The natural gas bill, which provides heating and hot water, totaled $30 for last month.

The high electricity bill is due to hot temperatures in May and June before we left home. We cranked the AC to stay cool! The next few months of electricity bills will be substantially lower since we are out of town for half of June and August and all of July. The water and natural gas bills should drop quite a bit too, however those utilities have large monthly flat fees regardless of usage. 

Taxes – $300:

I paid $300 toward my second quarter North Carolina estimated income taxes. 

Groceries – $245:

We only spent $245 on groceries while at home in Raleigh in June. The number is fairly low mainly because we were only home half of the month and trying to leave home with the fridge mostly empty. 

Healthcare/Medical/Dental – $40:

Our current 2022 health insurance is completely free thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$45,000 per year Adjusted Gross Income. 

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 select silver-level health insurance plans completely free. 

For the adults in the household, we spend $20 per month ($240 per year) for a basic dental insurance plan for each of us (or $40 per month in total). 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). 

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. 

Gas – $18:

Gas prices were extremely high in early to mid June but I needed a few gallons to get us through the first half of June while we were in town. Plus a little bit more gas to get us to and from the airport! So I bought a quarter of a tank for $18.

Hopefully prices drop back down by the time we get home to Raleigh.

Home Maintenance – $6:

I had to refill our gas can for the lawnmower. With gas at almost $4.50 per gallon, the 1.2 gallons in the can totaled almost $6! 

Restaurants – $2:

I had several free burrito coupons to use at Moe’s in June. But to use the app to order ahead, you have to pay $0.38 per order. So I spent just over a dollar to buy the convenience of having our orders ready as soon as we show up instead of waiting in line and placing our orders in person. 

I don’t include restaurant meals while we’re on vacation, but here are some good food pics from our trip so far. 

Cable/Satellite/Internet – $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 “Affordable Connectivity Program”. 

Total Year-To-Date Spending for 2022

 

Our spending totaled $17,157 for the first six months of 2022. This is about $3,000 less than the $20,000 we budgeted for six months of spending in our $40,000 annual early retirement budget.

So far our spending looks incredibly good all things considered. Inflation continues to drive up prices for staples like food, utilities, and travel expenses. But we are still somehow under budget! 

In August when we return home from our summer trip, we will hopefully be able to purchase an additional car. Used car prices are finally starting to drop since February. I hope car prices continue that downward trend all summer so we won’t be paying $10,000 for a 15 year old Ford Escort. A little tiny baby recession in used car prices will be a welcome relief for us. 

Our oldest kid starts full time community college in the fall. It’s looking like financial aid will cover the entire cost and cover all the books too. So we shouldn’t have to dip into the 529 plan too much. And in any event, the full price tag including books and fees is only $3,000 if we were to have to pay out of pocket. 

In the fall and winter months, we have three cruises booked totaling 20 days. I am about to make final payments on two of those cruises that will total just under $1,000. 

Overall, our spending looks good for the rest of the year. But this might be the year that we finally break the $40,000 spending level that we have budgeted for all along. And that’s totally fine because our portfolio has gone up quite a bit since I retired nine years ago, even after adjusting for inflation. 

Monthly Expense Summary for 2022:

Summary of annual spending from all years of early retirement:

Net Worth: $2,593,000 (-$177,000)

Down $177,000 in one month and here we are gallivanting across Europe spending money like crazy.

Truth be told, I think we are good. The stock market just had a little hiccup and we’ll probably be back to record high stock market valuations in a year or three or five. 

Our withdrawal rate is under 3% of our portfolio now. That means we won’t even need to touch 97% of our portfolio for over a year. A lot can happen in a year, so why worry about it today?

I’d rather enjoy the somewhat expensive vacation we are on instead of focusing time and energy on stock market fluctuations that I have no control over. 

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

Another great month of early retired life is in the books. We have been incredibly busy the first month of our trip through Europe. But we booked a nice quiet airbnb up in the hills for a week right in the middle of our vacation. We’ve been lounging around, taking in the views, and feeding/playing with the critters on the farm. 

And catching up on emails, social media, video games, and keeping in touch with friends and family back home. Our airbnb host runs a restaurant downstairs from us. So delicious hot cooked meals are available for a reasonable price if we are too lazy to cook something for ourselves, or make the 15 minute journey into town to dine out. 

So far, we have been fairly lucky with the weather. It’s only rained hard a few times and we were either hunkered down in our Airbnb or able to take refuge inside a restaurant for lunch to wait out the passing storm. 

The heat is another story. Europe is in the midst of another heatwave, and it’s hot outside! We’ve had air conditioning of varying quality everywhere we’ve stayed except two places, so it hasn’t been too bad overall. And it’s dry enough here that 90F degrees or even 100F degrees doesn’t feel that bad in the shade with a breeze. But I’m definitely bumping up “air conditioning” in our priorities for future airbnb bookings if we are anywhere south of the artic circle (and north of Buenos Aires) during summertime! 

In a few days we will continue our journey east to Hungary where we will wrap up our two month trip in eastern Europe. Then we head home in mid-August. Our older two kids will have a few days to relax at home before their community college classes start for the fall semester. 

That’s it for this month’s update! See you in August! 

How is your summer going so far? Staying cool? 

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