Retire by 35: July Results

July has been a roller coaster ride in many ways, especially with my ERE goals. As the month wrapped up, however, it was by far the most successful month I’ve ever had (despite losing a bunch of capital in the stock market).

In June I made a ton of life changes, including changing jobs, moving to a new state, and selling my car. It wasn’t until July that I started seeing those massive changes paying off.

As I said, it was a roller coaster ride. In July, my 18-month old daughter had a second bout of seizures. This is a life threatening problem, and it’s extremely stressful. It puts my ERE goals into question, to say the least. Besides the obvious costs associated with several days in the ICU, it also calls into question my life’s priorities. It’s been an emotionally draining experience, so I’ve decided to continue to march forward with ERE plans for now, and reconsider everything as I become more rational with my thoughts.

OK, here are July’s numbers:

Expenses: $2849

Mortgage: $871
Auto Sevice and Parts: $41
Fuel: $89
Auto Insurance: $53
Auto Registration: $21
Groceries: $337
Restauraunts: $81
General Shopping: $230
Utilities: $513 ($280 was old house)
Student Loan: $143 (paid off!)
Cash: $100
Medical: $127
Entertainment: $12
Home Improvement: $231

My original ERE stretch goal was to get expenses under $3000, which I accomplished. But it’s so much better than that. I set that goal with the assumption that I paid off my house in cash, which I chose not to do because of the low interest rates. I expect the number to now go even lower because I paid off my wifes student loan ($143/month), I’m done paying old utility bills from my old house ($280 last month), and last months home improvement fees were mostly due to buying a new house (~$150). Subtracting those fees, I now realize that $2500 is reasonable, and $2300/month is my new stretch goal.  If I paid off my house, I could be looking at closer to $1600/month for my family of 4 – and yet still not feel like I’m making big sacrifices.

I’m most satisfied about our improvement with food costs. We dropped from $800 last month to $420 this month. This was my primary goal for the month, and it was extremely successful. My strategy was to do all the shopping myself, and not let my wife in the store. :)

My secondary goal was to get the general shopping down. I did not succeed in this, although my wife and I have agreed to start analyzing it more. Next month, I hope to either bring that number down or break it out so we understand where it’s going.

Income: $7293

Salary: $6934
Adsense: $3.68
Dividends: $348
Lending Club: $0 (future monthly estimate is $45)
Amazon: $6.96

Dividends were a bit low, but July is just not a big payout month for me. Neither is August, but September should be very good. Average payout should be $1295/month, which equates to nearly half my expenses. I expect my dividend income to rise quite a bit over the next few months as I continue to reallocate my portfolio.

Assets: $938,619

Cash: $113K
Taxable stocks: $464K
401K/IRA: $348K
Lending Club: $5K
Investment House: $7K

I lost quite a bit this past month in the stock market. I’m not panicking, in fact I’m glad I didn’t invest more last month and instead I’m still holding on to quite a bit of cash. I plan to invest another $50K this month into dividend paying stocks and bonds. Because of the recent market drop, I will be getting more for my money.

Savings rate: 61%
Months to retirement at current expenses (3% SWR): 45
Months to retirement at current expenses (4% SWR): 5

Overall I’m happy to see that a 3% safe withdrawal rate results in just 4 years to retirement at current expenses. This number is pessimistic because it assume my July’s monthly income, which was low for dividends and slightly low for salary. I also think a 3% SWR is conservative considering some of my investments are significantly higher returning over the long run (with higher short term risk).

13 Responses to Retire by 35: July Results

  1. Marie at FamilyMoneyValues says:

    Sounds ambitious.  Hopefully you and your wife share your goals – not ‘letting’ your wife in the store may not play well with her!

    • We share the goal for me to retire and be able to spend more time at home with her and the kids – so she’s willing to make certain sacrifices.  As for dragging a 1 and 3-year old to the grocery store – she gladly gave that up.  :)

  2. Sorry to hear about your daughter. I hope the problem will get better as she gets older. Your expense looks great! Our housing cost is way too high, we’ll need to figure something out there.

    • It’s so easy to get stuck in a rut with housing costs.  I was dumb enough to consider a house an investment – mostly because that’s what my dad told me was true. I realized too late that this was an evil myth.

      In my case, I just made the commitment to move.  I was fortunate enough to have positive equity, and all fees were paid in a relocation package.

  3. Anonymous says:

    Wow–I am so sorry to hear about the seizures with your daughter. That must be incredibly scary.

    Great numbers–curious, what was the $12 spent on for entertainment? Also, what dividend paying stocks do you purchase?

    • Entertainment: My wife took my son to the movies.  We do other things for entertainment, but they are generally free.

      For dividend stocks, I’m mostly buying Dogs of The Dow dividend stocks.  I also have quite a bit of high-yielding bonds which are helping weather the recent storm in the market.

  4. I’m very sorry to hear about your family’s struggles, if you’re like me than things that are beyond your control can be so frustrating.

    I know it is impossible to perfectly time market bottoms, but I am so jealous of that pile of cash you have ready to distribute over the next couple days.  Any idea what the market floor is going to look like this time around?  I think things will settle down by the end of the week, but there will be some fantastic plays to be made Monday/Tuesday.

    • I don’t like to try to time the market, but I did just cancel some orders of $35K I had planned to buy this morning.  This is the first time I’ve made a last minute decision based on the market, but it’s just too volatile right now.  If things settle mid-day, I’ll go ahead and buy. Otherwise, I’ll buy tomorrow morning.

      Sitting on a bunch of cash right now is nice.  On the other hand, sitting on that cash during much of 2009/2010 was a real waste.  I’m anxious to hit my permanent asset allocation over the next few months so that I can better take advantage of dips in the market.

  5. Doctor Stock says:

    First time here… discovered through the Yakezie summer group… a very interesting post and blog.  I’m not sure…how old are you now?  How long until 35?


  6. Earlyretiree says:

    Having loosely semi retired 9 months ago at 34, I’ve found that I got a little bored, but only because my Wife is working and that based us at home. We could be renting the house out travelling but our dogs prevent indefinite travel cause, well. We love em’. So, I began doing a little gardening as a side business/hobby and thats now grown into a business making more money than I was working full time while only working 3 days a week! So thats just an observation anyway. Just thought I’d share

    • Wow, that’s impressive. I’ve seen a few guys that have turned urban gardening into a profitable venture, but haven’t really explored it yet. I’m happy to just provide an abundance of quality food for my family for now. What are you growing?

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