Fat FIRE and March 2024 Financial Results

Welcome to Rich Frugal Life’s March 2024 financial results! Before we get into the numbers, here’s what we were up to last month.  

We passed our “Fat FIRE” number!

This month, we finally surpassed our “Fat FIRE” number of $2 million dollars in investments!

According to the 4% rule, this amount could provide us with an annual income of $80,000, plus inflation. That’s a lot more than we’ve spent in recent years, and more than we expect to spend anytime soon.

This is the last technical milestone that we had set for our FIRE journey, so it was pretty exciting to achieve.

Unfortunately, a few weeks (and 5% market correction) later, we’ve dipped back below that milestone again. But such is life when a large portion of your net worth is invested in the stock market.

The stock market is one of the best growth machines for long term investing, but it can be volatile over shorter time horizons. I guess we’ll just have to get used to seeing bigger swings in our net worth each month.

Will achieving “Fat FIRE” change our early retirement plans?

I don’t think so. Like most of milestones on our journey, we passed this one sooner than expected. We’re still planning to finish out our current life adventure here in Arizona, and will see how we feel in two more years.

Enjoying the perks of early retirement

With a school-aged child and spouse who still works, I don’t yet get to enjoy ALL the perks of early retirement.

But I do regularly get to enjoy what I think is one of the greatest perks… having the flexibility to do things when other people are at work!

For example, I rarely go grocery shopping (or on any other errands) during the evenings, weekends, or over lunch anymore. The stores are so crowded during those hours! As a solid introvert, I prefer to avoid crowds whenever I can. The grocery store is a much more peaceful place at 10am on a Thursday.

This month, I got to enjoy another perk, and that was to travel on a whim for fun during the week. I don’t do this regularly because of said husband and child. However, in March, I was able to enjoy a quick overnight trip to Tucson for a visit with my cousin while she was in town for a work trip. It was a short, fun girls trip that I wouldn’t have been able to say “yes” to in my previous career. And I’m grateful for that.

Without further ado, here are our March 2024 financial results, with all the juicy details of this month’s spending, passive income, savings rate, and investments.

Why share the details of our spending and finances?

Because I’m nosey and enjoy reading about other people’s spending habits and net worth.  Maybe you do, too.

Everyone’s financial situation is unique.  However, I believe there is value in sharing information to provide context and normalize the discussion of money.

Seeing other people happily embrace simpler lives gave us the confidence to begin our own journey to financial independence and a lifestyle we believe will be healthier, happier, and more fulfilling.  I’m just trying to pay it forward.  Sharing our finances each month also helps us stay accountable.

Other information useful in reading our monthly financial results

Did we just buy a money pit?

We bought a complete fixer upper in late 2018… with a toddler.  When we moved across the country for Mr. RFL’s job, housing costs were much higher than we were used to.  So, we decided to just go for it when we found a great deal on a fixer upper.

We’ve been working on projects ever since, trying to do as much as we can ourselves to learn some new skills and save money.  Since the costs of a whole home renovation are significant and non-recurring, we don’t include them in our monthly expense budget.  However, we do share renovation costs each month for full transparency.  

How we define an “expense”

The table below shows all expenses for the month, excluding renovation costs.  Principal payments on debt are not included.  As a former accountant, I don’t view principal payments as “expenses,” since they directly reduce debt and increase net worth.  We don’t anticipate having any debt in retirement. 

March 2024 Financial Results

Investments

We cashed out of another $19,900 worth of Mr. RFL’s vested stock options this month, which provided $14,300 in cash after taxes. Most of this money was reinvested during the month.

We made net new investments of $4,300 into our financial independence portfolio in March. 

Our reported investment number includes employer matches but does not include reinvested dividends and interest.

Here’s a break-out of how new money was invested this month (excludes sales, which would skew the graph).

Debt

We currently have $151,100 in debt, all of which relates to our mortgage.

Our mortgage has a fixed interest rate of 2.5%, which is a lot less than the 4.3% our high-yield savings account currently pays.

We’re taking advantage of the interest rate arbitrage while it lasts, so won’t be making additional principal payments anytime soon.  

Savings Rate

Our after-tax savings rate this month was 89.7%.

This savings rate was a little higher than usual due to the extra income from stock options sold during the month (income when exercised/sold).

We calculate our savings rate after taxes, because we believe this gives us the best insight into our true cost of living.

Including taxes would skew our expenses and savings rates when comparing over a period of time. Although we currently pay a lot in taxes each year, that’s because we are still earning a high income. We expect to earn and pay much less in early retirement.

March 2024 Financial Results: Monthly spending

Ok, full disclosure time! The table below shows our expenses for the month, along with some additional thoughts (or excuses).

*Does not include charitable contributions made. We don’t share that information publicly and prefer not to treat charitable giving as an “expense” against our budget to encourage ourselves to be more generous (since we tend to want to manage and reduce “expenses”).  Additionally, approximately half of our annual giving is now made from the Donor Advised fund we opened in 2022, which is already excluded from our net worth.

Housing-Related – $796

Housing-related costs include mortgage interest paid, and a monthly allocation for property taxes, insurance, and HOA dues. 

We’ve refinanced our home several times over the past few years down to a rate of 2.5%. Because of this, and since we had been paying extra all along, our loan-to-value ratio and mortgage payment are now quite low.

Insurance – $456

This category includes our premiums for auto, term life, personal liability, and health insurance.

Health insurance premiums are withheld from Mr. RFL’s paycheck, but all our other insurance plans are paid annually or biannually.  We allocate an amount for auto insurance each month since the cost is high, but other insurance premiums are included here only when they’re actually paid.

This month we also paid the annual premium for our general liability and umbrella policy.

Food – $942

Our grocery spending was right around budget for the third month in a row at $542.

That said, we were WAY over budget for restaurants in March, spending $400! Almost half of this money went towards a fancy dinner date to celebrate Mr. RFL’s birthday. The rest was for our family birthday celebration, two date lunches, a mom’s night out dinner, and a family ice cream outing.  

Household Consumables – $114

This category includes most of the non-food consumables used in our household, such as toilet paper, shampoo, skincare, laundry detergent, cleaning products, etc. 

This month we purchased several toiletries and other consumable items from Amazon through subscribe & save. My new favorite face sunscreen (which I bought a second bottle of before it gets too hot) and self-tanner drove up this cost a bit (affiliate links).  

Utilities – $221

Utilities include electric, water, gas, and security. 

We had another reasonably comfortable month here in the Phoenix metro, so we didn’t need to run the heat or AC.

Home Maintenance – $61

Miscellaneous home maintenance supplies.

Fuel – $96

We filled up both cars this month, discounted using Fry’s fuel points.

Alcohol – $125

This month we paid for our Cooper’s Hawk wine club membership, ordered an extra bottle, and stopped at a local craft beer bar during one of our day dates.

Travel – $27

Gas for my overnight resort trip to Tucson. It was my only travel expense for the month since I stayed with with my cousin, who also generously paid for my dinner. I packed protein bars and snacks for my other meals.

Entertainment & Learning – $109

This category is for television, streaming music, books, games, concerts, and other family activities.

We paid for streaming services from Spotify, Netflix, and Amazon Kids+ this month. The rest of this money was spent on two woodworking books for Mr. RFL.

Self-care – $94

Now that I’m in my 40’s, it’s time to start taking better care of my skin. Although I’d like to be someone who “ages gracefully,” I also want to feel beautiful and confident without any makeup on. So I’ve decided to splurge a little more on specialty skin treatments this year to try and improve my wrinkles and skin texture (without using Botox).

This month I bought a Groupon for a local day spa to try out a HydraFacial.

Clothes – $65

I bought some adorable nude wedges this month, which are apparently now a lot cheaper than what I paid on Amazon (affiliate link).

Kid Activities & Other Purchases – $143

We paid for gymnastics lessons this month, four summer dresses from Target, and a few items for our daughter’s Easter basket.

Furniture, Tools & Other Home Purchases – $22

It was another frugal month for discretionary shopping!

I tried to fight the urge… but eventually caved and bought a specialty Easter egg silicone baking mold from Amazon.

Cash Back Rewards

We received $152 in cash back rewards this month.

Since these ultimately represent reductions in the purchases we make, we now reflect them as a reduction of expenses (rather than as income). Travel hackers are always bragging about how little they pay for vacations, but the reality is that they are making a trade-off between earning cash back and earning points to pay for travel. That’s not to say that the trade-off isn’t better for anyone who travels a lot and has the time to maximize points. It’s just different, so this is how I like to view the trade-off for our personal finances.

We strategize the timing of expenses and charge everything we can to maximize credit card rewards. However, we always pay the full balance due each month.

March 2024 Financial Results: Other Income

While most of our income still comes from W-2 wages and related employee benefits (i.e. 401k match), we’re continuing to build our passive and other income streams.

Here’s a summary of our Non-Employer Related Passive & Other Income for the month:

March investment income was awesome! We made $5,819. It was our highest quarterly dividend and interest payout yet, except for year-end (which is when we also receive dividends from certain investments that only pay annually).  

I also made $9 from selling old clothes on Poshmark this month and $1 from affiliate links on the blog.   

The referral credits from my ButcherBox review were $150 this month. While I show these referral credits above for transparency; I don’t treat this money as income within our budget or when calculating our savings rate. That’s because credits are only redeemed as discounts off my future ButcherBox orders, which effectively just reduces our grocery expenses.

That’s all for our March 2024 financial results.

We’re thrilled with how it went. How was your month?

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Featured image by Brian Halbach from Pixabay

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