2017 Q4 Passive Income Report

As I’ve mentioned in previous posts, our main goal is to retire early and be able to travel. We want to see the world and possibly move around every six months or so to experience new locations and cultures. One of the best ways to accomplish this is through growing our passive income.

You can look at more of our passive income tracking here.

What is Passive Income?

Many bloggers talk about passive income, and each of them has a slightly different definition, but for us, it is any income that we receive without actively working to get it. For example, our current jobs or my current contract work would not qualify, but dividend income, rental payments, etc. would count.

4% Rule

In the same vein, we also track 4% of our investments total value. The reason for this is based on the 4% Rule which is based on a study that found that withdrawing 4% of your investments every year would allow the investments to last for at least 33 years even in the worst of conditions.

Income Target

We will consider ourselves financially independent when either our passive income or 4% of our total investment value meets our yearly income goals.

Because we want to travel and experience new things, we’re going to attempt to hit a higher target than many bloggers in this field are aiming for. Most are content to hit their target and live happy comfortable lives at home, and that’s great. We’d like to think retiring early and seeing the world are not mutually exclusive though, so we’re going to aim for $84k a year, or $7k a month. Traveling isn’t cheap, so that hopefully gives us the room to do it often.

2017 Q4 Status

The following is a chart of our current passive income for the last three months that ended in December:

2017 Q4 Passive Income Summary

Peer-to-Peer Lending Interest$459
Private Market Real Estate Investment Income$0 (declared but not yet paid Q1 2018)
Bond Interest$0 (paid twice a year, so $621 quarterly)

Things are going pretty well. We got an average of $515 a month in this quarter, which is just over last quarter by $6.

We received interest from the Junk Bond we’re invested in last quarter. Since it’s paid twice a year, we counted half of the value for this quarter.

As mentioned in another article, our Fundrise investment was delayed due to a website error, but we are now currently invested. Our first dividend was paid to us in early January, but it didn’t make it for this quarter, so yeah, it’s still $0.

At the end of December, our investment value was $90.3k. Four percent of that is $3.6k a year or $301 a month. That’s a $47 dollar a month improvement over last quarter.

To sum it all up, we’re 7.4% of our way to financial independence based on passive income and 4.3% of our way based on the 4% rule. This information motivates us to push hard, cut costs, and see where we can add additional income for savings.

Where are you at on your financial journey? As you can see, we’ve essentially just started, and we started late, so we have some catch-up to do. Having you there to check up on us is great motivation to stay on track though!

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