Since my college days of living hand to mouth, I’ve tracked every penny I’ve earned and spent. It was a bit necessary if I wanted to have more month than money. At first I used pencil & paper, then a spreadsheet, and eventually Quicken.
Years later, after reading Your Money or Your Life, I began tracking passive / investment income with focus and determination. I added more calculations and pages and charts to my spreadsheet, and eventually started using Mint.com.
I credit this practice of tracking all income, expenses, and investment activity with our ability to optimize our spending and grow net worth. It is hard to overspend or buy frivolous things when the numbers are staring you in the face. There is no pretending and no hoping for the best.
It really doesn’t matter which method of tracking you use, as long as you do so…
After 20+ years of practice and experience, I now rely primarily on Empower to do it all for me. It does everything that my old spreadsheet did in a fraction of the time. It’s great… plus, you know… free.
Disclosure: GCC is a Empower affiliate. If you start using Empower from a link on this page, we may receive compensation. Opinions are my own, and also free. For all of our International readers, sorry, Empower is currently US only.
Over the first few years of early retirement I noticed a disturbing trend… dividends were increasing at a much too rapid pace!
Between 2012 and 2017, the dividend payout of VTI / VTXAX grew at an annual rate of more than 9%! The growth rate on our portfolio was even higher (14%+) which brought annual dividends from $28,139 in 2013 to $36,760 in 2015. Annual inflation over the same period was only about 1.5%.
While dividend growth investors were most certainly overjoyed, I was busy reducing our dividend income.
Please, corporations of the world… stop paying so many dividends.
I’ve read a lot of books in my day. A large part of childhood was spent with my nose firmly between the pages of one tome or another. I loved how the Hardy Boys and Sherlock Holmes discovered the truths hidden behind deception and clever disguise, and the worlds where magic and sorcery were more powerful than science.
Whenever my mind grabbed hold of a new interest, it was the library that enabled me to share the experience and knowledge of my elders and superiors. Through books I learned about the brave adventurers who explored our planet and those nearby, the inventors who pioneered new industries and created the futuristic world of today, and how there is nothing more powerful than an idea whose time has come.
So it is no surprise that when I first started to think about investing and early retirement, I returned to the library. I’ve read hundreds of books on topics as broad as personal finances, taxes, stocks, bonds, stock options, clever real estate investing, and more.
I’m often asked if we invest with Betterment, or if I would recommend them.
I assume this is because of their generous affiliate marketing program for personal finance bloggers, but we could generically ask, “Would I recommend using a robo-adviser?” But Betterment’s solution will make a fine reference point.
As with most things, there are pros and cons. But for the purpose of discretely foreshadowing my conclusions:
