As highlighted in our recent spending report, we spent a great deal of moola in 2023.

In fact, we spent at a level significantly higher than our income.

Which led many people to ask… how does that work? Where exactly does the money come from?

Where the Money Comes From

During the good old days when I was working 60-80 hours per week and trying to save for retirement, spending more than we earned would have been a real crisis. And rightfully so.

But nowadays that is just a normal everyday thing. What is “retirement” if not the period of life where you spend more than you earn?

So what does that look like in practice?

Cash Flow

At the beginning of each year I make a cash flow estimate for the coming year or three.
(See: Cash Flow Management in Early Retirement)

2023 was a bit special… we moved about $190,000 around between various accounts.

Direct expenses: $118,000 (from Reflections of 2023 – Life in the Burbs)
Equity increases: $15,000 (paydown of Mortgage and car loan)
Roth 401k/IRA contributions: $26,000
Monthly payments for 0% credit card debt: $12,000 (paying past expenses in the present)
Lump sum payoffs of 0% credit card debt: $18,000 (reduce balances to zero before 0% interest period expires)

We started the year with about $10,000 in cash in our brokerage account.

To this we added all direct income sources:

  • Total direct income: $54,500
    • blog revenue: $21,000
    • dividends: $31,000
    • interest: $2,500

Some of it came from borrowing (shifting current expenses into the future…)
(See: Sweet, Sweet, Debt)

We used 2 credit cards for many months that offered 18 months of 0% interest on purchases. I was also able to get a 24 month My Chase Plan with no fees or interest on a $5,000 property tax payment.

All of this is presently earning 5.x% in short-term treasuries (see: Playing the Interest Rate Spread for an Easy $2,000)

  • 0% credit card debt: ~$25,000

This still leaves us a little short… about $100k short. How does that get sorted?

Via the sale of assets / stock

  • Sold 505 shares of VTI at avg price of $216.22 = $109,190.71

This leaves us with a balance of about $10,000 which carries forward into 2024.

All numbers approximate and close enough

You really sold $110,000 worth of stock?!

I did, yeah.

A lot of it was just used to pay our bills. That’s what money is for.

Some of it was used for his/her Roth IRAs and my Roth solo-401k. (Because I had the earned income but not the liquid cash to contribute.)

If I sell $26,000 worth of stock, move that cash into Roth accounts, and then buy $26k worth of stock… I end up owning about the same number of shares just in a different place.

And some was sold to generate the cash necessary to pay off the credit card debt.

Credit card debt? What’s up with that?!

Back in June/July 2022, the stock market was down… shares of VTI were trading at $193+/-.

Rather than sell stock at such low prices, I paid a 3% fee to transfer some balances ($22,000 worth) from whatever cards we were spending money on those days. In exchange I got 18 months of 0% interest (so about 2% APY)

After 18 months of regular minimum payments, the remaining balance of ~$18,000 came due in December 2023 / January 2024.

I sold some VTI on Dec 7, 2023 at $227.83 and some on Dec 27 at $238.11, about 20% higher than a year and a half prior.

I haven’t done the complete math on this… but from a distance it looks like I get to keep an extra $5,000 for the effort.

But I did have to sell $18,000 worth of stock in December 2023 to pay for those Q2 2022 expenses.

And I might decide to sell some stock in late 2024 / early 2025 to pay off the 0% credit cards I loaded up in Q4 2023.
(Although I have the entire payoff amount sitting in short-term treasuries – the stock market is at all-time highs, so it is a different play this year.)

Wait, wait, wait… hold up… You really sold $110k worth of stock?


When you live off an investment portfolio, selling stock is par for the course.

That is indeed where the money comes from.

However – worth noting – 2023 stock sales really cover a 3 years period.
(Another way to say this same thing – I am unlikely to sell very much (if any) stock in 2024. But if I don’t, I will have to sell in 2025.)

  • ~$22,000 of 2022 expenses carried forward to 2023
  • Actual 2023 expenses
  • ~$25,000 of 2023 expenses that will be paid off in late 2024 (early 2025.)
    • I can only have all of this sitting in short-term treasuries because I sold some stock

As long as we continue to pull less than 4% of the portfolio annually, this is sustainable.

And in fact the portfolio can/should continue to grow faster than withdrawals, as indeed it has.

See this net worth chart from the recent post GCC Asset Allocation 2024 showing an upward trend even as we sell stock to fund current expenses (although stock sales in the early years were light.)

net worth over time, often selling stock to fund current expenses (not inflation adjusted)

What about Taxes?

When selling stock in a taxable brokerage account we realize taxable capital gains (or losses.)

Thanks to extensive capital gain harvesting, for the time being these gains are negligible. Or… as is the case in 2023… thanks to cap loss harvesting we will actually report a $3,000 loss.

But over time this process of selling stock to fund daily life will become more expensive tax wise, as a greater percentage of each sale becomes a taxable gain.

See: Long Term Long-Term Capital Gains


Retirement… the years when you spend more than you earn.

Where does the money come from? The sale of stock.

That is normal, reasonable, tax-friendly, and sustainable.

Where does your retirement spending money come from?