23 Jan

Bruno & Co.’s 2016 Spending

2016 was a big year for us! We finished touring Mexico with Bruno, hunted for the Best Early Retirement City and decided to buy a house with cash in Asheville, North Carolina.  At the end of the year, we found a wonderful house-sitter who cared for our foster cat – Fluffles – and also managed our Airbnb reservations while we traveled to Canada and spent one month with family. In this post, we’ll do a total financial breakdown of our spending and income for the year 2016. In short: Are we broke yet!??

For anyone who has occasionally been following this blog, it’s possible you may feel let down by Team Bruno.  We can’t truly be “retired” if we have an income stream! We bought a house that was more expensive than we had originally budgeted for and now we’re working for money again: hosting Airbnb guests. We’ll delve into some of the other interesting ways we received income this year, but first here’s the High Level Summary for 2016:

Total Spending = $34,435
Total Earned Income = $9,985
Total Net Spending = $24,450

Home Value = $270,000
Investment Portfolio (on Dec. 31st) = $760,000

Net Spend as a % of Investment Portfolio = $24,450 / $760,000 = 3.2%

Conservatively ignoring the added value of our paid-off house, our Safe Withdrawal Rate for 2016 was 3.2%.

Spending Detail

This is our first annual breakdown, but the table will look familiar. A nod to the great Mr. Money Mustache, it is formatted similarly and mirrors many of the Mint.com categories. Also, it does not include income tax paid.

We feel comfortable that the “no frills” living cost is low enough to offset some unexpected surprises, as well as expected future increases like the ACA subsidies going away, property taxes going up and maybe purchasing some Home Liability Insurance.

When we were still saving, I used to ogle year-end financial blog posts every January to see how we compared. I feel like our grocery bill is always higher than most, but we get by with minimal paid entertainment or new clothes. To each her own, I guess.

Earned Income Detail

On the earned income side of things, we were proud to pull in $9,985 this year. Quite unexpectedly, I might add, since we hadn’t originally planned on becoming Airbnb hosts or temporary landlords (enabling tenants to stay through the end of their rental contract in our new home).

Airbnb Hosting = $5,107
House Rental from May-Jul = $2,135
Sale of Bruno’s Specialty Trip Items = $664
Wii Sales = $513
Personal Capital / Website Promotion = $400

With our Central American Road Trip completed, we received additional funds from selling some of Bruno’s specialty items like the 12V Engel fridge, Bruno’s ARB awning & mosquito net, and a few obscure tools & spare parts. Travis also found a brief hobby that proved fruitful: picking up Nintendo Wii’s from the local thrift store at a discount, fixing small problems and reselling them at a profit 🙂

How did your 2016 compare? Do you track your expenses at this level? Bruno recommends these online services for tracking spending and investments. There’s little-to-no recurring work involved, once it’s all setup. The sites spit out colorful pie charts and pretty graphs whenever you want to review them, making personal finance F-U-N!

If you’re not yet retired but striving for FI, we hope you were successful maximizing your income while minimizing your annual spending last year. Any excess income should be going into IRA’s, 401k’s (Canadian RRSPs), and/or low-fee Vanguard funds (Vanguard ETFs for you Canucks).

All in all, we had an extremely privileged, travel-filled 2016. We were in Mexico in January, Canada in February, Jamaica in March, and bought our first house in April. Here’s to keeping optimism high in 2017, keeping long-term life goals in check, planning our next big road trip, and remembering that we’re all just specs of dust in a vast universe.