July 2023 Early Retirement Update – Back in America Edition
Hello and welcome back to another update from Root of Good! We just arrived back in the USA after our two month vacation in Argentina and Brazil, so I’m a bit behind in getting this update published. Vacation was a blast but it’s great to be home too.
We spent the first two weeks of July in Buenos Aires, Argentina. Then we headed further south in Argentina to Puerto Madryn, a coastal city in the Patagonia region, for the last two weeks of July. At the end of July, we headed north to Brazil for a couple of weeks before heading home to Raleigh. I have some pics from our time in Argentina in this post. I’ll save the Brazil pics for my August update which should be published in under a month.
On to our financial progress. July was another great month for our finances. Our net worth spiked by $92,000 to end July at $2,859,000. Our income totaled $2,728, while our spending was a relatively moderate $2,064 for the month of July.
Let’s jump into the details from last month.
Investment income totaled $1,724 in July. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. A small portion of our quarterly dividend income was paid in the first few days of July. As a result, we had a larger than normal amount of investment income last month. Here’s more on our dividend investments.
Blog income totaled $539 for the month. This is the “new normal” for blog income since I only post on here about once per month.
My early retirement lifestyle consulting income (“consulting”) was $0 in July. The slowdown in my consulting hours was a nice relief since I spent the whole month on vacation. August has been just as slow with zero hours booked so far.
Tradeline sales income totaled $450 in July. After a slow few months, my tradeline sales income is picking up again in June and July. 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 $15. This 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.
Youtube income was zero in July. 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 only get paid every other month.
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!).
If you’re interested in tracking your income and expenses like I do, then check out Empower Personal Dashboard, formerly known as 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 Empower Personal Dashboard. We have accounts all over the place, and Empower Personal Dashboard makes it really easy to check on everything at one time.
Empower Personal Dashboard 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 Empower Personal Dashboard 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 Empower Personal Dashboard.
Now let’s take a look at July expenses:
In total, we spent $2,064 during July which is about $1,300 less than our regularly budgeted $3,333 per month (or $40,000 per year). Travel and utilities were the two highest categories of spending in July.
Detailed breakdown of spending:
Travel – $1,375:
In July, we spent four weeks in Argentina and the last few days of the month in Brazil. Most of the expenses in Argentina were paid with cash (about $1,000 USD worth in total). More details on why we used cash in the “Argentina Cash Management” section, below.
Restaurant meals in Argentina were usually $20 to $30, and we would go out to eat or grab takeout at least once per day. Other meals were primarily leftover restaurant food, fresh salads we made from grocery store ingredients, or something simple like pastries, fruit, and yogurt for breakfast.
During the month, we spent about $150 at the grocery store. Mostly for wine, beer, other drinks, paper products, and some snacks. We bought a pack of steaks in Puerto Madryn to try, and they were delicious.
Transportation in Buenos Aires was dirt cheap. A few cents for subway or bus rides. Ubers were $2-5 around town and $5-15 to one of the two airports in town.
In Puerto Madryn, we had to take taxis a few times. They were relatively cheap. $5 for a 15-20 minute ride to the airport and $45 including tip for a two hour round trip drive to a nearby beach plus two extra hours of wait time while we watched the whales play next to the beach. That taxi trip to the beach was significantly cheaper than a rental car for one day plus gas.
We didn’t pay any admission fees for anything during the month of July in Argentina, until we visited Iguazu Falls at the end of the month. The admission fees to Iguazu Falls on the Argentina side were USD $63. The tickets to visit the Brazil side of Iguazu Falls were $71 for the four of us.
Due to some travel interruptions with our flights between Puerto Madryn and Iguazu Falls, we ended up spending two nights in hotels between these two cities. One night in a 2 room suite in Buenos Aires for USD $80 and the second night in a two bedroom apartment-hotel in Puerto Iguazu (near the falls) for about USD $75.
Other than the hotels, we only spent about $1,200 during July on travel. That means our food, transportation, and sightseeing only cost about USD $40 per day. Argentina proved to be very affordable as long as you’re carrying a wad of USD’s with you.
Argentina Cash Management
As far as cash management, we brought a stack of crisp, new, excellent condition USD $100 bills. Every few days I take one of those $100 bills to the moneychanger office across the street and get about 50,000 Argentine pesos in exchange. This foreign exchange trade takes place at the “blue dollar” rate which is about twice as good as the “official” exchange rate that basically no one uses.
Argentina is the rare country where you can’t get the best exchange rate by simply withdrawing cash from an ATM using your fee-free Fidelity or Schwab or Citigold ATM card. I haven’t tried to use my ATM card yet, but apparently the exchange rate is about 10-15% worse than the moneychangers. Credit cards are almost as bad. So far my Mastercard gives me an exchange rate about 8% worse than trading USD cash for a thick stack of pesos.
As a result of the bad exchange rate on credit cards, I pay cash for almost everything. This means carrying around an inch-thick folded wad of pesos everywhere we go just to cover a meal or two and any small incidental expenses during the day. Their largest bill here in common circulation is the $1,000 peso note, worth about USD $2. So a $45 steak dinner (22,500 pesos) has me counting out quite a stack of 1,000 peso notes to pay for the meal. Once we arrived in Puerto Madryn in the south of Argentina, the largest bills we were able to acquire were only $500 pesos, or just under a dollar each.
As this post goes live in mid-August 2023, the peso has lost about 33% of its value compared to June 2023 when we first arrived in Argentina (just two months ago). The current peso:dollar exchange rate is 750 pesos per $1 USD. This means that, at least temporarily, prices in Argentina would be even better than when we were there earlier in the summer of 2023 (in US dollar terms). However, inflation continues to run wild so it’s hard to say how much more of a bargain it really is today since prices will undoubtedly rise as the peso continues its downward spiral.
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Chase is pretty liberal when it comes to “what is a business”. If you sell stuff on eBay or Craigslist or do some odd jobs occasionally then you have a business and could get a credit card as a “sole proprietor”.
Another favorite travel card in my wallet is the Capital One Venture X card. The Venture X card is a “keeper” for me. First off, it comes with a $750 sign up bonus after spending $4,000 in the first three months. The bonus is paid in the form of 75,000 bonus points that you can redeem against any travel purchases from anywhere. Then you earn a solid 2 points per dollar spent forever! The other big perk is airport lounge access. You can get yourself plus unlimited guests into Priority Pass lounges. And you plus two guests can get into Plaza Premium network lounges and Capital One Lounges.
The Capital One Venture X card does have one catch – a $395 annual fee. But they reward you every year with an easy to use $300 travel credit plus $100 worth of points. Together, that makes $400 they give you annually which more than offsets the annual fee. Another benefit worth mentioning: you can add up to four authorized users for free, and they also get all the benefits of the Venture X card including the valuable airport lounge access. We used this perk to “gift” a pair of Venture X cards with airport lounge access to my brother in law and his wife to use on their family trip back home to Cambodia in April with their two young children.
Since the annual fee is offset in full by travel credits each year, I personally plan on keeping the Venture X card forever since the card benefits are so great.
Utilities – $359:
We spent $43 on our water/sewer/trash bill.
The natural gas bill, which provides heating and hot water, totaled $21 for last month.
I paid the electricity bill for two months during July. The June electric bill was $128 and the July bill was $167. Since it was hotter during July, the air conditioner at our house in Raleigh ran more often. Our daughter stayed at home this summer to pursue work and school, so we had a few household expenses in Raleigh like the electric bill for air conditioning.
Groceries – $278:
A little over half of this total was our daughter’s groceries back in Raleigh. Since she is still in college, we are paying for her groceries while she’s living at home.
The other portion of grocery spending were bird and deer food we ordered from Walmart and had shipped to our house during July. We are using the animal feed now that we are back home.
Our grocery purchases in Argentina and Brazil are recorded as “travel” expenses.
Gas – $34:
Our daughter bought about a half tank of gas during July.
Healthcare/Medical/Dental – $20:
Our current 2023 health insurance costs $18 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 health insurance for June and July before we left on vacation so I wouldn’t have to worry about that bill while we were gone. As a result, there was a $36 expenditure for health insurance in June but no health insurance bill during July.
Our 2023 dental insurance plans cost a total of $29 in premiums per month.
I chose a very basic plan for $9 per month for me that covers most preventive care but no fillings. Mrs. Root of Good has a different set of dental needs than I do so we kept the more comprehensive $20 per month plan for her (same as 2022’s plan). I only paid the $20 dental insurance bill during July, and will pay the $9 insurance bill twice during August.
By buying insurance, we should save a couple hundred dollars on my dental care. For Mrs. Root of Good, we will still save a few dollars compared to paying cash for the preventive dentist visits throughout the year.
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”.
Year to Date Spending – 2023
We spent $14,916 during the first seven months of 2023. This annual spending is about $8,000 less than the $23,333 we budgeted for seven months of spending in our $40,000 annual early retirement budget.
The one large expense anticipated for 2023 will be a used car. We failed in our attempts to acquire one during 2022 but that’s okay. The market appears to be cooling off a bit, since I am finally seeing a few cars under $10,000 that aren’t complete pieces of junk. We will start the used car search very soon now that we are back at home.
Fortunately, we are underspending our budget by a significant margin, so we should be able to “absorb” the used car purchase in our regular $40,000 per year budget without exceeding the budget by much. Right now we have an $8,000 budget surplus so that’s just a bit less than the amount we’ll likely spend on a used car.
I’m also planning on upgrading our dishwasher soon. I have repaired or replaced various parts on the dishwasher a half dozen times. I could keep repairing it, but I’d rather get a newer, nicer, more reliable model of dishwasher (if such a machine exists).
Monthly Expense Summary for 2023:
Summary of annual spending from all ten years of early retirement:
- 2014 – $34,352
- 2015 – $23,802
- 2016 – $38,991
- 2017 – $31,708
- 2018 – $29,058
- 2019 – $25,630
- 2020 – $28,466
- 2021 – $31,740
- 2022 – $29,449
- 2023 – $14,916 (Year to Date through July 31, 2023)
Net Worth: $2,859,000 (+$92,000)
Our net worth climbed $92,000 to end July at $2,859,000. We ended the month just a few thousand dollars below our all time high net worth. It’s dropped a bit in the early days of August so we still don’t have a new high water mark.
The next big psychological milestone will be the $3 million dollar mark. It won’t change much day to day for us. But it’ll be a nice big personal achievement. It could happen this month, or later this year or in a decade. Who knows!
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.
We’ve been back home in Raleigh almost a week as of the publishing of this article. I have to say that absence makes the heart grow fonder.
It’s so nice to come home to a comfortable house with a nice view, central air conditioning/heating, a mostly functional dishwasher, large microwave, clothes dryer, sharp knives, incredibly soft king size bed with fluffy pillows and soft sheets, showering in a fully enclosed shower with unlimited high pressure hot water, and tap water we can drink. And we get to drive around town in our large minivan with working AC, plush cloth seats, and a roomy interior with plenty of storage room. We are kind of spoiled!
We grow so accustomed to these creature comforts while living in America that we don’t realize how good we have it. Until we travel overseas and realize that our arguably lower middle class lifestyle in America includes more amenities than most people enjoy in the rest of the world.
I had a ton of fun in Argentina and Brazil. I hope our summers of adventure continue indefinitely in the future. At the same time, it’s always great to come back home after a long trip.
We arrived back home in Raleigh just in time to celebrate a big milestone for me. August 26, 2023 marks ten years since I retired early at the age of 33! It’s hard to believe I’ve spent a whole decade of “doing nothing“.
Ten years ago, we had a one year old “baby” and our two girls were in elementary school. Today the girls are both in college and the baby just attended his middle school orientation. Time flies!
Looking back, I feel like I’ve done a pretty good job of challenging myself, seeing new places, trying new things, and having a generally good time. Sometimes I find it hard to wipe the smile off my face!
Here’s to hoping the next ten years is as great as the last ten years!
With that, I’ll leave you until next month’s update comes out. Have a great rest of the month!
Summer heat got you down? Ready for fall to arrive? I know I am!
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