December 2023 Early Retirement Update – Happy New Years Edition

Happy New Year and welcome back to another monthly update from Root of Good! We are back home from our Christmas cruise to South America and Central America. Right now we are cozied up and trying to make it through another month or so of winter weather. Fortunately it’s never that cold in North Carolina, so I can’t complain too much! 

Now that we are home, we are busily planning some trips for 2024. We have two cruises planned for the fall and we are about to book a bunch of accommodations for our nine week trip to Poland this summer. 

On to our financial progress. December was another phenomenal month for our finances. Our net worth skyrocketed by $149,000 to end the month at $2,966,000. Our income totaled an incredible $26,305, while our spending was in-line with our monthly budget at $3,428 for the month of December. 

Let’s jump into the details from last month.

Income

Investment income totaled $24,907 in December. Our equity index funds and ETFs pay dividends quarterly at the end of March, June, September, and December. The fourth quarter is always the largest quarterly distribution by far. As a result, we had a much larger than normal amount of investment income last month. Here’s more on our dividend investments.

Blog income totaled $560 for the month. This is the “new normal” for blog income since I only post on here about once per month. As you can see, our investment income dwarfs my meager blog income. Fortunately I don’t have to be a full time blogger and I can enjoy the early retired life instead! 

My early retirement lifestyle consulting income (“consulting”) was $555 in December which represents three hours of consulting. That’s not bad considering I was on vacation half the month. I just added a 3% inflation raise to my rates for 2024. 

Tradeline sales income totaled $200 in December. It’s nice to see this income stream come back after a few slow months. I ramped up my tradeline sales a few years ago and discussed it in a bit more detail in my October 2020 monthly post and in my July 2021 monthly post. 

For December, my “deposit income” of $32 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 (or more!). 

In December, I gained $50 from a credit card cashback promotion for a travel booking. I ended up cancelling the travel booking but the $50 cashback stayed in my credit card account. Lucky me! 

Youtube income was $0 in December. Youtube only pays out when you hit $100 in accumulated revenue. Recently, my Youtube earnings have been slightly under $50 per month on average, so I only get paid every two or three 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!).

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 December expenses:

In total, we spent $3,428 during December which is about $100 more than our regularly budgeted $3,333 per month (or $40,000 per year). Taxes and groceries were the two highest categories of spending in December. 

Detailed breakdown of spending:

Taxes – $1,779:

My annual property tax bill came due in December. I actually paid about $2,200 in property taxes but $450 of that was paid using a rewards debit card from our health insurance company. So the net out of pocket for the tax bill was $1,779. 

Groceries – $735:

Grocery spending was slightly less than normal because we were gone on vacation for two weeks. I also bought $280 worth of Lidl gift cards since I had some promotions on my credit cards where I get 10% off purchases at Lidl (up to $7 per card, times 4 cards). So I’ll be spending that Lidl gift card over the next month or two. 

As part of the “grocery” spending, we bought six liters of liquor on the cruise last month. It was significantly cheaper than at the liquor store in Raleigh (and tax free!) so we stocked up on some goodies! 

Travel – $622:

We spent $363 last month on annual fees for our credit cards:

We’ll end up getting a lot of benefits out of these three cards, so I don’t mind paying an annual fee when it leads to a really good deal.

I consider these annual fees to be “travel expenses” because they directly lead to the points and miles and status that gets us “free” travel. Well, almost free, other than these annual fees. 

Free Cruises!

The Wyndham Earner Business card gets us Wyndham Diamond status which is a stepping stone to Caesar’s Diamond status and a whole bunch of other benefits like free hotel stays, free meals, and free-ish cruises. Nick at the Frequent Miler travel hacking blog has a great summary of what I’ve been up to with this new credit card. Dave at the MilesTalk blog also goes in depth on these free casino/cruise deals from status matches.

I just want to warn you that if you click on those links you’ll be going down a big deep huge rabbit hole. Exactly the kind of thing I enjoy! It’s a lot of reading and a lot of work but conservatively worth $10,000-20,000 of free cruises and other travel perks. 

We just booked two “free” 14-night cruises on Holland America using this casino status match travel hack. We saved $4,500 on the base fare on those two cruises. But we still had to pay about $2,500 in taxes, fees, and pre-paid gratuities. But that’s it for those 2 cruises unless we opt to pay for extras while on board.

I used 165,000 Chase Ultimate Reward points (keep reading to find out how to get these) to pay the $2,500 in taxes/fees/gratuities, so there really was no out-of-pocket expenses for 28 days worth of cruises for two of us. And once on the boat, we get $200 in free play at the casino plus free drinks for both of us any time we’re playing (or “playing”) in the casino. Cha-ching! 

The tentative plan is to use United and Southwest miles to get free flights to the departure points. And I will use Wyndham and Marriott points to get a free hotel night before each of the cruises. 

Other Travel Spending from December

On the 11 night cruise to South America and Central America, we spent a total of $248:

• gratuities (mostly offset by onboard credits) – $103
• Panama Canal Entrance fees – USD $35
• Souvenirs – $20
• Rental car from West Palm Beach to Miami plus gas – $65
• Uber in all the ports and in Florida – $0 (I had $75 of free Uber credits from a Clear promotion)
• A rescue from a nice lady (mil gracias a ti, Aida!) that took pity on us when no ubers or taxis were available at the Panama Canal when the visitors center closed – USD $25 cash gift as a “thank you” for taking us ~40 minutes back to the ship

We paid the cruise fare of roughly $2,400 for the four of us about a year ago using Chase Ultimate Reward points. 

Flights were all free using Southwest points (plus a few bucks in taxes we paid over the past few months). We stayed at a Sheraton in Ft. Lauderdale before the cruise (booked for free using 14,400 Marriott Bonvoy points). 

It goes without saying that this was a fantastic vacation at a phenomenal value. I cannot describe how nice it is to be lying on a beach on Christmas day while enjoying the perfectly mild Caribbean weather. It was a little sad to miss the extended family gathering back home in Raleigh, but overall the cruise was very enjoyable for us and the kids. 

In other travel spending, I spent $11 on taxes for a pair of Southwest tickets for Mrs. Root of Good and I, plus a few thousand Southwest points. I obtained my Southwest Companion Pass (more on that below) in early January and I’m already using it to get free companion tickets for Mrs. Root of Good when I book a paid ticket using my Southwest points. All we have to pay for her flights are the $5.60 airport taxes for each ticket (more taxes for international flights). 

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, the Chase Ink business cards offer an above average $750 Chase Ultimate Rewards points that can be redeemed instantly for $750 in cash. Mrs. Root of Good and I each picked up another new Chase Ink card a few days ago. The bonuses keep on rolling in the door!

For about a day after this blog post goes live, you still may be able to get a 90,000/$900 point sign up bonus if you find a link for the higher offer. Or go through my referral link, guaranteed to get at least 75k points/$750, then ask Chase to match you to the 90,000 point offer (an extra 15k points). 

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 75,000 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 75,000 points into $1,125 of free travel or $937.50 of free groceries. For example, I used 165,000 Chase Ultimate Reward points to pay for the $2,475 in taxes, fees, and gratuities on my two fall cruises. Or I can transfer those Ultimate rewards points to over a dozen travel partners’ airline/hotel programs like United, Southwest, or Hyatt. 

Southwest Companion Pass deal – time to act now!

I picked up a pair of Chase Southwest cards during November. I timed my spending on these cards to trigger the sign up bonuses in the first part of January 2024, and thereby earned a Southwest Companion pass in early January that will be valid through December 2025. The Companion Pass is valid for the year you earn it plus the following calendar year.

The Companion Pass basically grants a free flight for your companion when you book flights for yourself (with points OR with cash). This means Mrs. Root of Good is flying free with me on Southwest for all of 2024 and 2025! 

Right now is a great time to get these cards since you’ll get almost two full years of the Companion Pass. 

Note that these cards have an annual fee (but they offer a lot of free points each cardmember anniversary so it offsets about half the annual fee). And you can apply for both cards on the same day if you want. 

Referral links if you’re interested:

Chase Southwest Rapid Rewards Performance Business card – 80,000 SW miles ($199 annual fee) – select the “Performance business” card option

Chase Southwest Rapid Rewards Plus card – 50,000 SW miles ($69 annual fee)

For $268 in annual fees, we’ll get ~130,000 SW miles (plus an extra 10,000 mile head start toward the Companion Pass qualification), and the Companion Pass that offers buy-one-get-one-free Southwest flights for 2 years. Just pay taxes on the free ticket (usually $5.60 per one way segment in the USA). That’s about $3,600 worth of free flights for the two of us. 

More Root of Good articles on cruising:

1. Going on a Cruise Part 1 – Overview 
2. Going on a Cruise Part 2 – Getting the best deal on a cruise
3. Going on a Cruise Part 3 – Save on board and on transportation 
4. Going on a Cruise Part 4 – The Food

Utilities – $269:

We spent $186 on our water/sewer/trash bill. A small part of that was prepayment for the month of January.

The natural gas bill, which provides heating and hot water, totaled $84 for last month. We used the heat some since it started to get colder throughout the period of November and December covered by the natural gas bill. 

I paid the electricity bill in the first few months of January so I’ll be paying two electric bills next month. 

Healthcare/Medical/Dental – $0:

Our current 2024 health insurance is free, thanks to very generous Affordable Care Act subsidies that we receive due to our low ~$48,000 per year Adjusted Gross Income. 

Our 2024 dental insurance plan costs about $34 in premiums per month. We picked a plan from Truassure through the healthcare.gov exchange. The dental insurance does a good job of covering routine cleanings, exams, and x-rays plus most of the cost of basic procedures like fillings.

I guess December was kind of hectic and I don’t think we ever paid a dental insurance bill for January, 2024 and I am just now realizing that. The account is set to auto-pay but there must be a problem somewhere in the insurer’s system. So maybe we do have insurance, and maybe we don’t! 

Gas – $20:

A tank of gas for our new car totaled $20. The new car is more fuel efficient so we should spend a little less on gas.

Automotive – $6:

The new car’s check engine light came on during December. Uh oh! I bought a bluetooth OBD2 code reader for $6 from Ebay so I could check on the error code(s). After checking the code, I reset the check engine light and it hasn’t come back on yet.

Google says the problem might be nothing and never come back, or a faulty $100-200 oxygen sensor replacement, or a brand new $1,000 catalytic converter. The car just ticked over 100,000 miles so it’s probably due for some random major failure by this point in its lifespan. 

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”. 

Spending for All 12 Months of 2023

 
We spent $37,865 throughout 2023. This annual spending is about $2,100 less than our $40,000 annual early retirement budget. Another great year! 

The biggest single purchase of 2023 was our new (to us) 2017 Hyundai Accent that was over $9,000. It turns out that our new car purchase didn’t throw our annual spending off by very much since we ended 2023 just under our annual budget target. 

Looking back at our 2023 spending, I see that our extensive travels didn’t cost as much as it does some years, in spite of spending roughly three months out of the country during the year. We spent the summer in Argentina and Brazil, two great budget-friendly travel destinations.

Travel hacking well over $10,000 worth of benefits every year certainly helps keep travel spending to a minimum. The flights and Airbnbs for our 2024 summer trip would have been almost $15,000 if we paid cash. Instead, I used a combo of airline and Chase Ultimate Reward points to get nearly free flights (just pay a little taxes) plus thousands of dollars worth of Airbnb gift cards for free. 

Monthly Expense Summary for 2023:

• January – $3,423
• February – $1,675
• March – $1,679
• April – $1,566
• May – $2,976
• June – $1,536
• July – $2,064
• August – $2,615
• September – $12,714 (we bought a new used car)
• October – $1,513
• November – $2,682
• December – $3,428

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 – $37,865 (full year)

Net Worth: $2,966,000 (+$149,000)

December brought us another six figure gain of $149,000 which adds to a six figure gain in November to bring our year end 2023 net worth total to $2,966,000.

The $3 million mark remains elusive but I think 2024 might be the year we finally cross that threshold. We got very close during December 2023 but couldn’t quite make it all the way. 

In real terms, we’re still down slightly from a couple of years ago after adjusting out net worth for inflation. However, we are objectively doing very well. Our annual spending is just over 1% of our total investment portfolio. We could double our spending and be totally okay long term. I don’t have any plans to do so immediately, but I’m also not in super frugal mode like I was 10 years ago. 

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! We had a great one here at the Root of Good house. Plenty of travel and good times. Lots of relaxation, reading, reflection, and Netflix. Nothing really bad happened. No complaints from me! 

Our kids are growing up quickly, with the oldest two kids roughly halfway done with college. Our middle kid just passed her drivers license exam and now she can drive to college instead of having her parents take her there each day. She has a full day of classes on Tuesdays and Thursdays so she camps out at school for about 11 hours while attending her classes scattered throughout the day. That new car purchase last year is proving very helpful for our family! 

For us parents, this newfound mobility means our schedule just got freed up a little bit more during the week. So far we have a slow spring scheduled without a lot of travel but I think we’ll end up taking a few trips before our big June to August summer trip. We just cancelled our tentatively planned trip to Phoenix and New Orleans for next week because we’re all recovering from some kind of illness that was probably the flu. It seems like everyone is catching this bug this winter. Not fun! 

I’m excited to see what 2024 has in store for us and our family. Cheers to all my readers and best wishes as we make our way through the new year! 

Who’s ready for another month of cold weather?!

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