I am still on Holiday break, a sweet 27 days long this year. Somehow, I am very busy. I have no idea how I will have time to go back to work.
This week so far, we have been to two hot springs, made a quarterly trip to Costco (will appear in January’s ledger), made soap, gone for walks, done the laundry and grocery shopping, and caught up on my favorite shows.
This morning, we made our first bastardized version of bulletproof coffee (BPC).
1 tsp coconut or MCT oil
1 tbsp unsalted organic butter
¼ tsp vanilla extract
1 cup brewed coffee
Add ingredients to the blender (I mixed mine on the frappe setting, but seriously, whatever). This makes the coffee blend somewhat frothy.
Honestly, it tasted pretty good, creamy and smooth, although the addition of a pat of butter made the coffee lukewarm.
Officially, BPC is touted as being a great way to get healthy fats first thing in the morning, but they use MCT oil and grass-fed unsalted butter. Apparently the oil and fats are good for regulating cholesterol, cognitive function and support your hormonal system.
But…..I doubt it has that much affect. At 200 to 300 calories per cup, BFC has to replace a meal and I was super hungry an hour later. I also had another two cups of regular coffee with cream. After a year of this habit, I would probably be 20 pounds heavier.
Regardless, I am not really into food fads. It was a fun experiment, but I would probably only make this coffee occasionally or until the ingredients I bought, run out.
On the financial front:
What a year! We spent just under $40,000, a very respectable number in the pricey mountains of Colorado, and saved over $87,000 including re-invested dividends and interest.
The art business earned ~$6,600 after expenses, lower than our take last year. I created a website store in 2017 but received very little traffic and no sales directly from the site. This year I will have to do better about advertising, plus we plan on attending a few festivals in the summer to increase sales. Needless-to-say, we are not great businessmen.
The Expense Report!
In the tables, I produce a monthly and year-to-date summary of expenses, the monthly spending average, and the budget. I keep track of progress and spending behavior. It is much easier to detect any problem areas by keeping careful track of where the money is going.
Summary of December 2017 spending
Green highlighted fields indicate income. We have four sources of regular income; salary and related benefits, rental income, interest and dividends and Mr. TJL’s business income.
Orange highlighted fields indicate expense and are denoted as a negative value in parentheses. Our regular expenses are categorized by monthly expenses and yearly expenses. The combination are our total operating expenses. Additional expenses are paycheck deductions of charitable contributions, health insurance and income taxes.
Blue highlighted fields are our investment and savings contribution.
The bottom line is the balance.
Our monthly budget is tabulated in the far right column.
Despite Christmas spending and travel, we stayed close to budget in December (within $45).
We “overspent” by ~$1,200 for the year, but we likely “overpaid” in taxes. After an expected tax refund in April we will likely break even.
In December, we realized a savings rate of 74%!
The Jolly Ledger’s Income Statement
I prefer to manage our finances like a business so I track all sources of income and expense. Below are the details for the monthly summary.
2017 FIRE Progress
I am on-track to retire in four years at age 45. To visualize my progress, I chart my expenses versus my passive income. Passive income is calculated as 4%, the safe withdrawal rate, of my investment balance including holdings in 401k, traditional IRA, Roth IRA, and brokerage accounts.
Due to the contributions and earnings on our investments, our passive income is $1,740 (as of 12/1/2017) per month. In retirement, we expect to withdraw $2,733* per month.
Expenses tabulated in the chart combine the household expenses with the business expenses, so it does not reveal our true cost of living, which has stabilized to near $3000 per month. I am hoping that this level of spending becomes our “norm”.
*Total retirement spending is expected to be $40,000 per year. We will receive $7,200 per year in rental income. Our investments will have to provide us with the remaining $32,800, hence $2,733 per month. If Mr. TJL’s art business provides any income, we will be able to withdraw less, but we are conservatively planning as if we will not make any income in retirement.