August 2022 Early Retirement Update

Time for a look back at what we were up to last month! We started the month of August in the city of Eger in the east of Hungary. Once our weeklong stay in Eger wrapped up, we headed west to Budapest where our 2 month European vacation would end after a nine day stay in the capital city.

We flew back to the USA through London and missed our connecting flight from London to Raleigh (whoops!) so we got a free one day whirlwind vacation in London. All expenses paid by the airline (except our transit tickets into the city center!). 

After finally making it home to North Carolina, two of our kids started community college classes almost immediately. And now the youngest kid is back in school too. So we are back into the slower-paced “steady state” life here at home in Raleigh. 

Financially, August was a mixed bag. Our net worth plummeted by $79,000 to end the month at $2,639,000. However, our income of $1,698 was higher than our spending of $1,398 during August. 

Let’s jump into the details from last month.

Income

Investment income totaled $350 in August. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. As a result, we had a rather small amount of investment income last month. Here’s more on our dividend investments.

Blog income totaled $1,121 for the month. This is a pretty normal month for blog income. 

My early retirement lifestyle consulting income (“consulting”) was $175 in August. Summer is always a slow period for my consulting biz. We’ll see if the fall season brings more work for me! 

Tradeline sales income totaled $0 in August simply because the monthly payment for August landed in my account on September 1st. And it was over $1,000! But I’ll add that amount into the September income totals, just to maintain consistency in reporting. 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 August, my “deposit income” totaled $51. 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. 

August Youtube income dropped to zero. 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!).

August was one of the lower income months for us during 2022. But our expenses were low as well, so on a cashflow basis we’re still doing well.

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 August expenses:

 

In total, we spent $1,398 during August which is about $2,000 less than our regularly budgeted $3,333 per month (or $40,000 per year). Travel expenses and groceries were the two highest categories of spending in August. 

Detailed breakdown of spending:

Travel – $605:

We spent twelve days of August traveling in Europe. Eleven of those days were in Hungary and one day in London. 

Here is a quick summary of roughly what we spent in Europe during the month of August:

• groceries, toiletries, household supplies – $50
• restaurants – $260 (plus maybe $100-150 more paid in cash that we withdrew from the ATM in July)
• souvenirs – $50
• transit – $115
• museums and attractions – $109

Groceries and Restaurants

Hungary restaurant prices were incredibly affordable, so we didn’t buy many groceries. Instead, we ate out almost every meal while in Eger and Budapest and still managed to spend less than $500 on dining out.

A typical meal for the five of us was usually around $20-25. That represents a mix of takeout and dining at a restaurant. Included in our restaurant spending is a decent amount of snacks, ice cream, and milkshakes while out and about exploring the cities and countryside of Hungary. 

Transit costs

While in Eger, we walked everywhere or drove our rental car. But once we were in Budapest, the car became a liability so we returned it to the rental car agency. While in Budapest, we were able to walk to tons of places from our centrally located airbnb. For longer trips, we took advantage of the efficient bus network and subway system in Budapest.

The transit tickets were usually 75 cents per person, or a bit more if we needed to transfer from the bus to the subway. We also took the express bus from our airbnb to the airport for $4 per person. In total, we spent $45 on all our transit needs while in Budapest for 9 days. That shows how affordable traveling in Eastern Europe can be.

In contrast, we spent one day in London. While there, we decided to visit the downtown area of London for a quick self guided tour of the city. The one-day transit pass for our family of five was $71. We spent almost twice as much for one day of transit in London as we did on a week’s worth of transit usage in Budapest. 

Admission fees/experiences

We didn’t spend too much at museums and other attractions while in Hungary. The biggest expense was the $69 for family admission tickets for their massive Parliament Building. The building sits on the east bank of the Danube River in the center of Budapest and is only accessible with a paid tour. 

We also toured the Eger Castle for $11. We chose to visit in the evening hours once the crowds had gone home and the temperature dropped to a more reasonable level. Tickets were half price after 5 pm, however the small museums inside the castle complex were closed for the day by the time we arrived. But we got to enjoy a great sunset from atop the castle walls. And we only had to share the castle complex with about a dozen other people. 

While in Eger, we rode their Ferris Wheel to catch some excellent views of the city. The cost for all five of us was $29. 

We actually spent a little bit more than $109 on various admission tickets during August, but we paid cash for some of the small ones. So the extra spending was recorded in my July spending report when I withdrew the cash from the ATM. For example, I visited the Hungarian National Museum by myself for $7.

On our drive west from Eger to Budapest, we took a detour to the Somoska Castle and Stone Waterfall in Slovakia. I don’t recall the exact cost of admission but I think it was a dollar per kid and two dollars per adult.

When I tried to buy tickets, I was rattled because the very nice lady at the ticket office only spoke Slovakian, Hungarian, and German. So we conversed in German. The only problem was that I don’t really know much German. Fortunately I did know the words for “one, two, three, student, kid”. That was enough to tell her we needed to pay less for our three kids! In this little corner of the Slovakia/Hungary border, German serves as the lingua franca. 

Apparently this is the case in a lot of Hungary (outside of Budapest), since I had many people ask me if I spoke German when their only languages were German and Hungarian (and not English). Per my googling, this is a hangover from the former Austro-Hungarian days when schoolkids in Hungary commonly learned German as a second language. And from the economic might of Austria and Germany, which feeds a lot of the cross-border tourism in Hungary. On top of all that, there remains a lot of cross-border trade with Germany and Austria so it’s helpful to know German if you want to live and work in those markets. 

Accidental 1-day mini-vacation in London

We missed our connecting flight in London, so we were stuck there for a day. After a tight connection through Heathrow Airport (where you have to pass back through security during a connection, no matter what), we showed up to the departure gate for our 10:20 am flight to Raleigh.

We arrived 20 minutes before scheduled departure. But the gate was already shut! The gate agents were very persistent in saying “gate’s closed; sorry, rebook something else” in a half-dozen different ways. Later on, I find out that the gates officially close 15 minutes before departure, which in London apparently means “gates close 20+ minutes before departure and/or whenever we feel like it”. 

What a bummer. 

Eventually we gave up arguing with the gate agents and headed over to the American Airlines desk to complain and book another flight home. Except there were no more flights home that day. The bad news was that the next available flight from London to Raleigh was the next day. And it was “our fault” that we missed the flight to Raleigh, so we would have to provide our own lodging, meals, and incidentals while in London for the night. 

Yeah, that doesn’t sound fair. 

In the meantime I volunteer to translate for another stranded passenger (there were 38 of us that “missed” the flight to Raleigh because they closed the gates early). He spoke only Spanish and none of the gate agents spoke any Spanish. So I translated for him and got him a flight to Raleigh (maybe) on standby, but not direct. Maybe through New York or maybe not. No clue where he ended up. 

I go back to the airline agent to negotiate. I tell them how our connection was tight and the airport is a nightmare. And my arriving flight (on their partner airline) was late. 

I guess my heroic translation efforts softened up the customer service rep enough to label me “a good guy”. She acquiesced to helping me out (after verifying that our arriving flight did in fact take an extra 20-30 minutes to get to the gate and deplane all of us fine travelers). She said we could rebook on the direct flight to Raleigh the next day for free. And she agreed to cover the cost of hotels, meals, and incidentals for the night in London. 

After a total of two hours at the airport desk, they eventually gave us 3 free hotel rooms at the in-airport Holiday Inn (about a $600 value total), plus meal vouchers for free dinner and breakfast. In addition, she gave us $60 worth of vouchers to buy snacks at the convenience store in the airport. That’s how I found out $60 buys a large grocery bag filled with an assortment of British chocolate, snacks, cookies, and various treats (maybe 10-15 pounds weight in total).

After we scored a free 24 hour paid vacation in London, we quickly set off for our airport hotel, dropped our bags, rested and regrouped for 30 minutes, and pulled together a quick plan to tour downtown London. 

Fortunately I had already extensively researched visiting London because we almost went into the city on our 9 hour long layover waaaay back in June on the way to Croatia. So I already had a route mapped out, and all the best of the touristy places tagged on my map! 

Off we go, to ride the train into the city to see whatever we could see in what we had left of the afternoon. We walked along the Thames River, saw the Millennium Eye ferris wheel, then crossed the Thames by Big Ben and Parliament. Then we walked by Westminster Abbey and on through a big park toward Buckingham Palace. By this point, it was getting late so we headed through another park toward the subway station for our ride back to our hotel. 

It was a great whirlwind tour of London, but not enough time to really experience much of the city. So we’ll probably go back at some point.

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.

Groceries – $282:

Our grocery spending of $282 wasn’t too bad given the massive amounts of food inflation. Lots of stuff we routinely buy has increased in price by 33-50% in the past year.

We were only at home for 19 days during August, so we didn’t buy a full month’s worth of groceries. 

I also used up a bunch of gift cards and Visa rewards cards from our health insurance company, so the $282 spending number is probably quite a bit higher. 

I still have a bunch of gift cards to spend, so our grocery spending might remain artificially deflated for a while. 

Education – $269:

With two kids in college, our education costs are ramping up ever so slightly. 

Our oldest kid has turned college into a money-maker since her total of grants and scholarships exceeds the cost of tuition and books. The surplus is hers (for now!). As a result, I won’t be including the cost of her books in my spending summaries since she will pay for it out of her grant/scholarship proceeds. For the curious, her books totaled $282 for fall semester. That doesn’t include the 2 year Cengage textbook subscription we bought last year for about $260. 

Our middle kid is in community college half time and high school the other half of the time. As a result, she gets no financial aid. So we are paying for her books out of her 529 account (and I’ll be including the book expenses as part of our household spending for the time being). 

We bought the $269 2 year “Cengage” subscription for our middle kid. It includes her Economics textbook and online homework access. In addition, the subscription is “all-you-can-read” for 2 full years. So we will get the Calculus I, II, and III, Linear Algebra, Differential Equations, 2 semesters of Physics, and possibly more textbooks out of this one-time subscription.

That’s not a bad deal since individually these are all close to $100 each. Our oldest kid is using her second year of the Cengage subscription right now for Economics and Calculus, so that one time investment last year is paying off this year. 

Gas – $69:

A full tank of gas for the minivan. We were low on gas when we went out of town in June, but gas prices were almost $5 per gallon in Raleigh. So I left the van mostly empty, hoping for a reversion to the mean in gas prices. The gamble paid off and I saved $20 as a result. 

Telephone – $64:

We spent $64 to buy another year of cell service from RedPocket Mobile on two phone lines ($32 per phone). What started out last year as an experiment turned out to be a very functional cellphone service for our kids, so we continued it another year.

The minutes/texts/data on the cheapest RedPocket plan are limited. But with wifi calling, Google Voice for texts, and almost always being on wifi, the basic plan isn’t too onerous. Especially for a $2.50 per month phone plan! 

Utilities – $50:

The total utility spending back home in Raleigh was $50 last month.

We spent $33 on the electric bill and $6 for the water/sewer/trash bill. The water bill had a small positive credit from (intentional) overpayment in July. The natural gas bill, which provides heating and hot water, totaled $11 for last month. 

These utility bills represent the period over the summer when were weren’t at home. We used a tiny bit of electricity for things like the fridge and air conditioning (with thermostat set at 88F). Most of the charges are for keeping water/sewer/electric/gas connected for the month, regardless of usage.

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. 

Automotive – $22:

Our daughter got her provisional driver’s license! After showing up for our appointment and then waiting an additional two hours at the Department of Motor Vehicles, they finally blessed her with the legal rights to drive a multi-ton vehicle at 70+ miles per hour. And it only cost $22! 

I didn’t know how to classify this expenditure so “automotive” sounds like a nice driving-related category to contain this expense! 

Restaurants – $1:

After a summer of dining out a ton, we are back to grocery shopping and cooking in our nicely outfitted kitchen. As a result, our restaurant spending in Raleigh during August totaled just under one dollar. I paid $0.38 for the privilege of ordering ahead through an app two times to redeem some free food coupons at a local restaurant. 

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 $21,501 for the first eight months of 2022. This is about $5,000 less than the $26,667 we budgeted for eight months of spending in our $40,000 annual early retirement budget.

So far, our 2022 spending looks incredibly good, given the high inflation operating in the background. We are over our target on travel spending, but lower spending in other categories more than makes up for travel inflation. 

Kid-related expenses are increasing since they are in their teen years. At the start of September, we started paying the higher auto insurance costs that come with adding an inexperienced teen driver to the auto policy. We have been paying about $20 per person per month for auto insurance for many years. But that’s for us experienced adults with an established driving record. 

Adding our daughter to our auto policy costs an additional $81 per month. That’s over four times the cost for an experienced adult. They did offer some consolation – her premiums will start to drop after three years of ticket-free, accident-free driving. 

This extra $81 per month is 100% worth it, since she can drive herself to college, and run errands if we need her to. In case anyone is wondering, riding a bike the 4.5 miles to her college classes on the six lane busy highway is a non-starter. And the 50+ minute transit ride would be cumbersome as well. So the low price tag of $81 per month is quite a bargain! 

For the time being, we are all sharing one car. It’s not too much of a hassle since I have two feet and a bicycle and can get around town to a lot of places without a car. 

But we hope to buy a new used car soon. Used car prices are theoretically declining month after month. But I can’t really tell by looking at the listings for used cars. It’s tough to pay $8,000 or $10,000 for an old beater car that might not be reliable. 

Monthly Expense Summary for 2022:

Summary of annual spending from all years of early retirement:

Net Worth: $2,639,000 (-$79,000)

June: down $177,000. July: up $125,000. August: down $79,000.

Hey look! We were only down five figures this month! It was a pretty smooth month overall! 

I think you have to take these fluctuations in net worth with a grain of salt. Yes, watching $79,000 evaporate from your balance sheet does suck. But at the same time, it fluctuates so much on a daily and monthly basis that you can’t worry too much about the short term. 

Long term, we are doing phenomenally well. We are up roughly double since I quit working nine years ago. That’s the main metric that matters. We’re a lot better off today then we were back then, in spite of nine years of laziness. 

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

Just in the past few days, the summer heat transitioned into more fall-like weather here in North Carolina. It was actually cool one morning last week! I can’t wait as fall is my favorite season of the year. 

Looking forward, we have a somewhat busy fall/winter travel schedule. We have a 10 night cruise to the Caribbean in October and another 10 night Caribbean cruise in January. And we just booked another cruise for December. 

For the December cruise, we will fly to Europe a week before the cruise to squeeze in a mini-vacation. Then head to the port and embark for a transatlantic cruise back to the USA. It’s our first transatlantic cruise so I’m looking forward to it. And we snagged a balcony cabin for the same price as an inside cabin. Assuming the weather isn’t too chilly, we’ll be able to relax on our private balcony quite a bit (or at least enjoy the view). 

For our big summer 2023 trip, we were looking at spending the summer in Colombia initially. Then we pivoted to focusing on Argentina instead. Right now we haven’t booked anything for our summer 2023 trip, but I was able to recycle the notes/details from my 2020 South America trip planning spreadsheet. That 2020 trip was “The Trip That Didn’t Happen Because Of The Pandemic”. 

Maybe in 2023 things will work out better for us than in 2020.

Well, that’s it for me for this month. See you in another month! 

Are you ready for summer to be over? Did you do anything exciting?

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