OLTL 2019 Mid-Year Update – We Retired!

Hola, mi gente! It’s been so long since we last wrote a post. All I can tell you is that we’ve been extremely busy, too busy to even write about one life to live. LOL.

It’s all good though. We spent the first half of the year preparing for our lives post-corporate work and guess what? We retired!

At 33 and 44, we retired from our corporate jobs!

There’s no turning back now. We pulled the plug on our jobs and everything happened so fast that we barely had time to reflect on it. Although, given that we were sure about our decision, there wasn’t much to reflect on.

Even though we haven’t published in a while we’ve been more active on our social media channels and mainstream media. We were featured on a mainstream media site back in April and most of our peers found out about our FIRE plans before we retired.

Speaking of peers, we’ve got a few more readers from our work network. They want to follow our journey! Hooray and welcome! Friends, you can click to follow us on our most active social media channels: Twitter, Instagram and Facebook.

I took June off to finish my paternity leave and came back on July 1st to give a 3-week notice. Tatiana gave her notice the next day and it was epic!

We’ll give you more details in another post but wanted to share the big news with you now. So besides early retirement, what has been happening with our lives?

We usually post One Life To Live quarterly, but missed posting for the first quarter, so figured, why not do a special mid-year update?

With that in mind let’s dig into our spending and how it aligns with our happiness.


One Life To Live is our quarterly recap on how financial independence plays an integral part in fueling our true happiness. We have one life to live, but are we making the best of it? Are we living in the most fulfilling way possible? We hope that our lifestyle answers those questions as we continue to optimize for happiness. Carpe Diem!


Exploration

Other than returning from Florida in January and taking a trip to Providence, RI in June, we didn’t travel much during the first half of the year. Why go on limited vacations, when a permanent one was just around the corner? 🙂

We moved in June to our rental property and I was busy renovating it during the weekends leading up to the move, while Tatiana took care of Chica Libre and packing/moving logistics.

You moved? What!!!!

Yes, we decided to move to our paid-off rental property for the next 1-4 years until we find the best location for our dream home. To avoid harsh winters, we’ll snowbird until we move permanently to a location with more pleasant winters.

So trips were scarce during the first half of the year, but that’s all changing now that we retired.

From the chef’s kitchen

Cooking your own meals is a great way to eat healthily and save money. A great advantage is that you can cook with better ingredients and know exactly what’s going into your food.

We still continue to cook many of our meals but with the move and all, we ordered in a lot during the first quarter.

We also started grilling since we have a backyard of our own now and enjoying outdoor eating on our front porch.

Grilling is fun for us and we wanted to get a small charcoal grill, so we went with this Weber grill. We also bought a rotisserie accessory.
And here’s our first grilled chicken from our new grill!
We love having a slow morning breakfast and what better way to kick off early retirement than with breakfast on the porch?
A nice perk about living in a diverse neighborhood is access to ethnic food! We can have sweet fried plantains on-demand now by driving or walking to the local grocery store to pick them up.

Now for the numbers lovers, we’ll proceed to discuss our spending, portfolio income, and performance for the first half of the year.

Passive income and expenses

The following is a streamlined spending report that takes very little time to produce, therefore, giving us time back for more living. It stays within our theme of having one life to live and maximizing our time for happiness. 

Expenses

2019 Mid-Year Spending (Jan-Jun)

Now that we are retired, I want to focus more on the overall spending on a quarterly basis. That been said we’re providing spending for all categories. This is how we spent during the first half of the year.

Category1st Half of 2019 Amount 
Home$27,675
Kids$6,131
Food & Dining$5,670
Gifts & Donations$1,935
Travel$1,420
Bills & Utilities$1,335
Auto & Transport$1,223
Health & Fitness$949
Other$1,170
Total$47,508

So half-way through the year, we spent over $47k. This is an unusual year for us as we transition to early retirement. We don’t see us spending as much moving forward. We spent a ton on home renovations, which we’ll go over shortly.

Out of the $27,675 spent on the Home category, $16,283 went to home improvements and a new roof. In order to get the property to move-in condition for us, we made some upgrades!

We installed new waterproof laminate flooring throughout the house and gave most of the rooms a fresh coat of paint. We replaced the old countertops with granite and added a stone and glass backsplash. Also, we added a nice powder room in the basement that originally was just a toilet enclosed in plywood walls.

Most upgrades and repairs increased the equity by at least $20,000 since we did a lot of the work ourselves and hired cheap labor.

In the end, we get to enjoy a nice upgraded home for the next few years and, once we’re ready to sell, we won’t need to do much work to put it on the market.

Some expenses that we incurred during the first half of the year are also going away or will be reduced tremendously. For example, $4,600 that we paid in rent from January through May can now be allocated to property taxes, annual maintenance costs, and insurance.

Moving expenses were $1,500. We didn’t move too far from our previous location (about 45 minutes), but we still hired movers. Those days of doing the heavy lifting for us are over.

About $6,000 was spent on babysitting while Tatiana was back at work for five months. That monthly expense is now gone.

Other than those expenses, there’s nothing really out of the norm here.

But we saved on some things too. We got new cell phone service providers and lowered our cost!

Now that we’re traveling for months at a time and also will be using more Wi-Fi service at home, we decided to see which were our best options for cell phone service.

We ended up signing up for Mint Mobile and transferred our cell phone numbers. We now pay $15 a month per line for unlimited texting, voice and 3 GB of monthly data. If you’re interested, you can use this link to try it out and get $30 off your service. This is an affiliate link, so we get a kickback as well.

So far, we love the service with Mint Mobile. They use the T-Mobile towers, so we get service mostly everywhere in the U.S. The transition from our previous provider was seamless and we haven’t had any issues with internet speed or dropped calls.

Another issue that we had with phone service is that every time we traveled to the Dominican Republic, we used to get a new sim card for the country. I didn’t want to waste time on that every time we travel to a new country. To solve this inconvenience, we signed up for GoogleFI for service abroad.

GoogleFI is more of a pay-as-you-go service and you’re covered in over 200 countries. With GoogleFI we pay $20 a month to have the line and that includes unlimited texting worldwide and unlimited U.S. voice.

We pay for the data we use at $10 per GB. We’ve been in Europe for three weeks now and have only used about half of a GB since we have Wi-Fi in most places.

The calls are charged per minute, depending on which country you’re in. For example, in Belarus, it is $0.20 per minute. We use WhatsApp, Viber, or Skype when we have Wi-Fi because those minutes can quickly add up.

Our experience with GoogleFI has been great so far. We’ve been getting a connection in most places and they let you know when you arrive in a country that you’re covered. Once we get back to the U.S., we can pause the service for three months at a time and get to keep the number.

This is a big time saver because we no longer have to worry about getting sim cards when we travel and won’t leave money behind as we pay for the data we only use. The big win here!

If you’re interested in checking out GoogleFI, use this link to get $20 off your service. Again, this is another affiliate link so we get a kickback, but rest assured, we only recommend a service we use or believe in.

With Mint Mobile and GoogleFI, we are getting much more out of our phone service and paying way less.

Previous phone service spending: $70/mo for two lines = $840/yr plus international charges.

New phone service with Mint Mobile: $30/mo for two lines = $360/yr plus international charges.

That leaves us with $480/yr to play with. We can spend that much on GoogleFI when we travel abroad and still be below our previous phone spending.

That sums up our spending for the first half of the year.

You can click here to see our latest annual spending.

Portfolio income

Dividends

I’m not sure how much we got in dividends for the second quarter. We’re having a hard time accessing the Vanguard accounts from abroad without our U.S. text messages available to verify the sign-in process. I wish we had the option to verify via email like Personal Capital. Hint, hint, Vanguard!

I’ve got to call Vanguard and figure out a way to access it, but I didn’t want to hold up this post. After all, I have no urgency in fixing it. 🙂

We’ll post dividend income on the following OLTL post.

Freedom Fund Portfolio Returns

We currently have two goals for our entire portfolio:

  1. The Nuestra Casa Fund holds the funds for our future home, once we decide where to settle 2-4 years from now, in early retirement.
  2. The Freedom Fund provides the income needed to live life on our terms.

Our goal for asset allocation prior to retirement is an allocation of 75% stocks (including REITs) and 25% bonds/cash in the FF Portfolio, which coincides with having the money we’ll need during the first 5 years of early retirement in bonds and cash. We met our allocation goal.

Freedom Fund Portfolio performance

Our FF portfolio returned 10% for the first half of the year. That’s about 8-9% below the S&P 500 returns because we hold bonds and cash.

We need fixed income. We are retired now. You know?

REITs

You know what other fund is performing well in our portfolio?

Our REITs holdings!

Our VGSLX shares returned 19.29% from Jan-Jun! They currently make up 7.6% of our portfolio and we keep them in our Roth accounts due to their tax inefficiency. Our goal is to bring it up to 10% of our FF portfolio, as an alternative to stocks and bonds, through a 401(k)-traditional IRA conversion.

The aqua blue line represents VGSLX shares which returned 19.29% from January through June.

Net worth update

What makes up our net worth?

Only income-producing and real estate assets make the list.

2019 net worth

The first four months of the year were smooth sailing for our net worth, but then it took a dip in May. By June we were back up again. We were not counting on our net worth going up much this year, so this was a pleasant surprise.

Net worth over time / Our ladder to wealth

Since we reached our FIRE date, how did we do as far as meeting our number?

Our month-to-month net worth updates chart since we began tracking it as a couple at the end of 2013.

When we sat down to figure out our FI number earlier in the decade, we started with a goal a little bit over a million dollars for our net worth of income-producing assets. We reduced our number for a lean FI and reached that number back in 2017.

At that point, we were ready to pull the plug and retire from our corporate jobs, but we were waiting to have a child prior to retiring. We had some trying times before our beautiful girl was born.

Her birth, a year ago, got the countdown going! We wanted to spend most of the first year stationary since babies are better off in a stable place during that time. Based on the timeline, the perfect time for us to retire would be July 2019, after we’d collect a company bonus for the prior calendar year.

And retire we did!

At this point, our net worth had surpassed our original FI number. I should be thrilled by this, but we do go into this early retirement stage with caution for several reasons:

  • We’re retiring on the tail-end of the longest bull market in history and if an extended bear market follows the chances increase of depleting our funds.
  • The healthcare system in the U.S. is still a disaster with skyrocketing prices.
  • Withdrawing 4% from our retirement accounts doesn’t feel safe for a 60-year retirement span because the market is overvalued.
  • Most of our funds are in retirement accounts, which means we need to make the money in the brokerage account last for as long as possible.

We have a few safeguards in place that will allow us to thrive because the last thing that we want is to go back to mandatory work.

The bear market will come. We don’t know when but we’re planning as if it’s already here. The plan is to withdraw less than 4% of our funds. We can stay in our current home for the next four years, so that gives us flexibility with the house funds.

We’re traveling for now and have travel insurance, but we do plan to have health insurance when we return to the U.S.

To sum it up, we’re not going to spend money as if the fountain can’t go dry. Caution and flexibility will be the name of the game, especially in the first few years.

What else is happening?

We’re still trying to create some sort of routine for us in early retirement. We’re truly enjoying the journey without the stress of a 9-5 and are taking it one day at a time.

And the most important thing of all, we’re present to see our little one take her first steps on her own, which should happen any day now. There are so many first moments that we’ll get to experience with her. That right there makes it all worth it. Until next time!

How was the first half of 2019 for you? What financial goals did you accomplish?

José

José worked at Vanguard for 12 years, helping create electronic and print educational materials for 401(k) participants. He retired at 44 from corporate America and loves to spend time with his wife and daughter, discovering new adventures or just sharing a meal in their backyard.

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9 thoughts on “OLTL 2019 Mid-Year Update – We Retired!

  1. Great Post 🙂
    Financial goal I accomplished this year: downpayment for my first apartment and a savings I am proud of! With the help of two(and third is still a baby) very helpful people

  2. Congratulations!

    I’d love to know more about the numbers and how much your investment portfolio spits out to cover your expenses. We found with having a kid that our expenses are going on, so we are actively trying to boost our passive retirement portfolio by another $50,000 a year. But I don’t think we’ll get there for another three years.

    Have your phone you needed to have more or make more once your child was born?

    Sam

    1. Thanks Sam!
      Our entire portfolio’s income, including the funds to buy a house that are in money market account, was $40,568 last year. We own our current home outright. It was a rental property, but we decided to move in for now since we still need to decide where we want to live by the time our little one needs to attend school.
      We were aiming for a spending budget of $40k a year with a paid-off home. Given our previous dividend income I feel strongly about being able to live off the dividends without tapping into investment gains.
      We’re in the process of analyzing how much we should keep in the house fund given that a) we don’t see ourselves moving within the next 3 years and b) we have about $120k of home equity that we can use towards the future purchase. This gives us more flexibility with cash in early retirement as most of our money is in retirement accounts that can be touched until traditional retirement age.
      As far as kid spending. It hasn’t been that bad for us. We expected to pay for a babysitter this year but now we’re home and don’t need it. Baby now eats mostly from what we cook and she gets lots of present from friends and family so we don’t spend much on her.
      We planned our early retirement with a couple of kids in mind, and we also plan to live in areas with a lower cost of living than west coast.
      Thanks for commenting, buddy!

  3. This is all so exciting! Congratulations!! With a such a young kid, it feels like you pulled the plug at the right time for the right reasons. I couldn’t be happier for you – or more jealous!

    1. Hola!!! 🙂
      It definitely feels like the right moment to do this. We’ll be around her when she needs us the most and wants to be around us. 😉
      Thank you for stopping by!

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