Hiking in Norway

2018 was our 6th full year of early retirement and world travel. It is nice, I highly recommend it.

It was also a year of many firsts – first visit to the Baltic countries, first time to pay rent in 2 places at once, first time traveling around a school calendar, and… the first year without expense tracking.

I’ll review all of that, but first, some highlights of 2018:

  • We visited Vietnam, the United Kingdom, Spain, Poland, Lithuania, Latvia, Estonia, Finland, Sweden, and Norway
    • Jr is now up to nearly 40 countries, not bad for an almost-4-year-old
  • Jr recognizes all of the continents on a map and can ride a pedal bike
  • Winnie has become an impressive painter
  • I biked over 1,000 miles for the first time since I stopped commuting, and am training for my first triathlon
  • (lowlight) We tried (unsuccessfully) to have a second child

Not everything went according to plan but we are all enjoying life.

[instagram url=https://www.instagram.com/p/BuFtSOsA25V/ hidecaption=true width=200]

2018 Cost of Living

Expense tracking is a core tenet of fiscal responsibility and is something we have done religiously since reading Your Money or Your Life 15 years ago. It’s a powerful tool to ensure spending is in line with your values.

Which is nice, but… I’m not really sure how much money we spent this year. Nonetheless, I’m confident the following numbers are correct.

Health insurance$75$900$2
Total(~$10,000) <---$118,200$323

That “Other” category is pretty big, so here is a break down:

  • Chinese New Year trip to Vietnam – $1,500
  • 2 Months in Europe – $6,000 (mostly Airbnb and hotels, plus 3 intra-Europe flights)
  • 1 Month in the US – $1,000 for a rental car (stayed with friends & family except for 3 nights in a free hotel)
  • Dental work – $2,000 (gold, baby)
  • IVF – $10,000
  • Montessori pre-school – $8,000
  • Self-employment taxes – $10,000
  • New handbag – $2,000 (our only major purchase of the year)

A picture of a picture of a handbag with a handbag

After all of that, our cash position is about the same as it was a year ago and I didn’t seel any assets. Ergo, expenses < income.

(Technically, I sold some stock early in the year, partly for cash flow reasons. Then I bought it all back in December while rebalancing our portfolio when we no longer needed cash.)

(We still habitually write down each of our transactions into a text doc on our phones, but I haven’t reviewed any of it nor entered it into my handy dandy expenses spreadsheet. Mint and Personal Capital (affiliate link) also have a record, and I could also review credit card statements since we avoid cash.)

Lifestyle Inflation

We broke $100,00 in expenses this year by a wide margin, spending nearly $10,000 each and every month. This was the most expensive year of our lives and a far cry from the $20,000/year we used to spend in Seattle.

I mean, what do you expect when you don’t track your expenses? ;)

A decade ago this would have all freaked me out, but now it feels comfortable and the total is about what I expected. It’s also an interesting example of lifestyle inflation.

“Should we try to have a second child?”

“We have been spending less than we can afford for years now, how about we move into a bigger apartment?”

“The first round of IVF didn’t work, should we keep our lease in Taiwan and go to Europe for the summer before trying again?”

“Jr wants to go to school. The Montessori school is nearby albeit a little pricey. What do you think?”

Each time we discussed one of these decisions, there was really only one question:

“Can our portfolio sustain this level of spending based on the 4% Rule?”

Yes, yes it can.

We have been ramping up our expenses since the day we started this phase of life, spending a bit more each year. This was a conscious choice as part of our sequence of returns risk management.

As a result, technically our average spending rate over the past 6 years is a more reasonable $200/day ($73k/year.)

It also helped us transition psychologically from living off a paycheck to living off a portfolio. For reference, here are the annual spending summaries for the previous 5 years: 2013201420152016, 2017.)

Seriously though, track your expenses ;)

World Tour

Since we went to all of the trouble of traveling, here are a few of my favorite photos. See many more on Instagram.

San Sebastian, Spain

1st Pony Ride – Vall de Núria, Spain

Tallinn, Estonia


Playing with Snow – Norway

Hiking, Jotunheimen, Norway

Just like Mommy

Just like Daddy

Conclusions and Projections

2019 is already well underway, and all of our core lifestyle inflation choices are well entrenched and aligned with our values.

We won’t have any planned medical expenses this year, so that will reduce costs $10k or so. Handbags aren’t on any shopping lists, but shoes probably are.

Most likely we will travel for the summer (Australia/New Zealand?) with costs similar to Europe.

We are still debating a return to the US as Jr approaches school age, with projected costs much lower, but that is still 2 to 3 years out.

Thank you for reading and for your support.

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Jeremy, Winnie, & Julian
Go Curry Cracker!