September 2023 Early Retirement Update

Hello and welcome back to another monthly update from Root of Good. We started last month with heavy bouts of consumerism, spending money like crazy on a new used car and half a dozen plumbing upgrades. By month’s end, we wrapped up the September projects and purchases and enjoyed more time relaxing in this beautiful fall weather we have right now.

In travel news, we officially have the bookends to our summer 2024 trip in place. We fly into Krakow, Poland in June for a nine week vacation that will take us from the mountains in the south of Poland to the Baltic Sea in the north. Our plans are wide open right now, and we may rebook the plane tickets depending on how our travel itinerary shapes up. 

On to our financial progress. September was mostly negative for our finances. Our net worth dropped by $79,000 to end September at $2,705,000. Our income totaled an impressive $8,498, while our spending was shockingly high at $12,714 for the month of September. 

Let’s jump into the details from last month.

Income

Investment income totaled $5,025 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 larger than normal amount of investment income last month. Here’s more on our dividend investments.

Blog income totaled $547 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 $350 in September. This represents two hours of consulting work. 

Tradeline sales income totaled $0 in September. Another slow month for tradeline sales. 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 September, my “deposit income” totaled $50. This income 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 $0 in September. Youtube only pays out when you hit $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!).

The final (and largest!) piece of income came from bank and credit card bonuses. I received a total of $2,525 worth of bonuses during September. The bulk of the bonus income came from a Wells Fargo promotion. We received $2,500 for transferring a quarter of a million dollars worth of ETFs into Mrs. Root of Good’s new IRA at Wells Fargo for a few months. I got the same bonus in my own account last month as well. In early October, I transferred these ETFs out of Wells Fargo and back to Citibank where we’ll get another $2,000 bonus in about six months.

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.

Expenses

Now let’s take a look at September expenses:

In total, we spent $12,714 during September which is almost $10,000 more than our regularly budgeted $3,333 per month (or $40,000 per year). Automotive and groceries were the two highest categories of spending in September. 

Detailed breakdown of spending:

Automotive – $9,551:

We bought a new (used) car!! In very early September we purchased a 2017 Hyundai Accent SE hatchback with 99,000 miles on it for just under $9,200 including all fees, taxes, and registration. After a month of ownership, we haven’t discovered any nasty surprises so I think it’s going to work out well for us. 

So far we have only needed both cars simultaneously in a few instances during the past month. From a strictly financial optimization perspective, it would probably have been cheaper to take Uber in those circumstances. However it’s nice to be able to jump in a car and go whenever we want instead of waiting for an Uber to (maybe) show up. In the new year, we’ll have a child commuting to college and attending more in-person classes, so we couldn’t avoid buying a second car for much longer in any event. 

As all of you know, the costs of a car start with the purchase price. On top of that are maintenance costs, taxes, insurance, and gas. During September, I brought the car to our mechanic to swap out the spark plugs for $318 since it appears this service was slightly overdue based on the mileage of the vehicle. I also spent $35 for new engine and cabin air filters plus three new windshield wiper blades. It appears the used car dealer we purchased from didn’t do very much to maintain or improve the car but at least we paid well under blue book value. 

Groceries – $910:

We spent the whole month of September at home in Raleigh so $910 reflects a whole month of groceries. This is much higher than our spending before inflation picked up in 2021, but probably reflects the “new normal”. It seems like the rapid weekly or monthly grocery price hikes disappeared from my local stores’ shelves a while ago.

Home Maintenance – $749:

We tackled a long list of plumbing upgrades and repairs during September:

• New dishwasher installation
• repair kitchen sink drain pipe leak
• 2x bathroom sink faucet and drain replacement with a full drain/p-trap rebuild on one of the sinks
• replaced outdoor hose faucet
• complete toilet rebuild due to leaking tank seal

Our long-time plumber charged us $749 for all the labor and materials (except the 2 Delta bathroom faucets I bought from Amazon for $50 using gift cards last month). 

I don’t know if $749 is a little or a lot for these plumbing services but this plumber was always fair to us in the past. However after this latest experience, I will be finding a new plumber.

He was difficult to get in touch with, he didn’t show up when he was supposed to on several occasions, and he never returned to take care of an installation problem with the outside faucet (I fixed it myself).

Ah, the joys of homeownership! I did some quick math to convince myself that owning is still better than renting. We’re getting about a 5% return per year from getting “free” rent from our house (net of expenses like taxes, insurance, and maintenance). Plus our house has roughly tripled in value over the last 2 decades since we bought it (annualized 5.8% return). Let’s assume in the future we average 4% per year gains and just barely beat inflation.

That’s a respectable 5% + 4% = 9% total return from our housing investment and it’s all tax free! As an added bonus, we have nearly infinite autonomy over our little third of an acre patch of land in Raleigh. No landlord can make us do anything! 

Travel – $511:

The biggest travel expense for September was $370 in taxes and fees for our four round trip tickets to Poland for the summer of 2024. We also spent 30k American Aadvantage miles and 44k United miles for each round trip ticket. The cash price for these tickets are about $1,800 per round trip ticket. We saved about $6,800 by using airline miles plus a little cash to cover the taxes. 

Next summer in June, we plan on flying into Krakow where we’ll spend a week or two exploring the city and surrounding area. Then book a rental car and visit the mountainous countryside for a few weeks. Eventually we will pass through Wroclaw and make our way north to Gdansk where we fly home in mid-August. Most lodging and rental cars will be covered by points and miles of various sorts including many thousands of dollars worth of Airbnb gift cards I got for free last year from cashing out my Chase Ultimate Reward points.

Other travel spending for September includes $135 for our son’s renewal passport. And $6 for a convenience fee on our North Carolina quarterly estimated tax payment. I count convenience fees as travel expenses because we end up getting lots of free travel from using our credit cards as much as possible.

Get free travel like us

If you are interested in getting free travel from your credit card like I do, consider the Chase Ink Unlimited or Chase Ink Cash business cards (my referral link). Right now, for a limited time, the Chase Ink business cards offer an eye-popping 90,000 Chase Ultimate Rewards points that can be redeemed instantly for $900 in cash. Mrs. Root of Good just picked up a new Chase Ink Cash card during March, and I just got my new Ink card this week. The bonuses keep on rolling in the door!

I am guessing the 90,000 point sign up bonus will only last for a few more weeks, so sign up now if you want the higher bonus amount. 

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”. 

I use the 90,000 Chase Ultimate Rewards points by transferring them to my Chase Sapphire Reserve card (also offering a 60,000 point sign up bonus right now). With the Sapphire Reserve card, I can get 1.5x the points value by booking cruises, flights, hotels, or rental cars through their travel portal. Or 1.25x value by reimbursing myself for groceries. That turns the 90,000 points into $1,350 of free travel or $1,125 of free groceries. Or I can transfer those Ultimate rewards points to over a dozen travel partners’ airline/hotel programs like United, Southwest, or Hyatt. I am about to book a $350 per night hotel in Florida for 9,000 Hyatt/Ultimate Reward points, for example.

Utilities – $362:

We spent $114 on our water/sewer/trash bill. 

The natural gas bill, which provides heating and hot water, totaled $18 for last month. 

The electricity bill totaled $231 in September. It was a hot summer and we used the air conditioning a lot. For the past couple of weeks we didn’t need AC so our upcoming electric bills should be fairly moderate. I also discovered that our electricity rates have crept up over the past few years from 10 cents per kilowatt hour to ~13 cents per kWh. In the past, a $200 summer electricity bill was a lot. Now that’s the “new normal” and I expect monthly bills over $250 in the future during peak summertime usage.

Taxes – $300:

$300 for quarterly estimated income taxes for the state of North Carolina. 

General Merchandise – $141:

Random items from Walmart including a lot of bird food and deer food. 

Gas – $84:

A tank of gas for the minivan ($52) and a tank of gas for the new Hyundai Accent ($32). The new car is more fuel efficient so we should spend a little less on gas in the future. 

Charitable Giving – $52:

We donated $52 to our nephew’s school fundraiser. I wasn’t sure whether to call this a gift or charity. 

Healthcare/Medical/Dental – $47:

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. 

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).

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.

Education – $10:

A high school transcript request fee for the kids’ community college. The dysfunctional college bureaucracy continues to surprise us by consistently losing previously submitted transcripts. 

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 $30,243 during the first nine months of 2023. This annual spending is just a couple hundred dollars more than the $30,000 we budgeted for nine months of spending in our $40,000 annual early retirement budget.

As I guessed last month, our new car purchase didn’t throw our annual spending off by very much. We’re still within one percent of where we should be at this time of year. What expert budgeting and forecasting! 

I don’t think we have a lot of other big spending for the remainder of 2023. Hopefully we can book some fall travel for Mrs. Root of Good and I. We just got our renewal passports back this week, so we can finally get out of town once we find somewhere to go.

In reality, much of this travel will be free for us since we’ll be paying with points, miles, and free airbnb credit for flights, lodging, and any cruise fares.

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 – $30,243 (Year to Date through September 30, 2023)

Net Worth: $2,705,000 (-$79,000)

Our net worth dropped by $79,000 to end September at $2,705,000. Another steep decline that reflects about two years of our annual budget disappearing in a short span of time. 

Am I worried yet?

Short answer: “no”.

Longer answer: these types of monthly declines are normal fluctuations in the stock market that happen from time to time. Short term, we suffer from the volatility.

Perhaps “suffer” is a strong word because I really don’t care. I only check the net worth stats at month-end to pull together these monthly updates. I have several months of cash in my checking account and get routine cash injections from various sources such as dividends, bank/credit card sign up bonuses and blog/tradeline/consulting income. 

Long term, the stock market goes up when the underlying fundamentals improve. I’m patient and don’t need to sell hardly any investments on a month to month basis to survive. Eventually the stock market will return to boomtimes and we’ll all be wealthier as a result. 

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

The end of August and the beginning of September was kind of a grind. It’s always busy when we get back from our two month summer vacations, but this fall was particularly rough. We kicked the new car search into gear and after searching and searching, we found something we liked.  Then we had to clean the car a bit, do some research/troubleshooting, and complete a few deferred maintenance tasks on it.

In parallel to the car acquisition, I spent a good bit of time researching and sourcing plumbing parts and services and then overseeing our sketchy non-responsive plumber. 

Are we ruling our things or are our things ruling us? 

By the end of last month, things slowed down for us. Now that everything is done, we get to relax. I am definitely thankful I didn’t have to juggle all these different tasks while also working full time. That wouldn’t be fun at all! 

Okay folks, that’s it for me this month. See you next time!

Have you ever had to deal with a difficult contractor? What did you do in the end?

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