January Freedom Fund Update: We Reached a Dividend Goal Last Month

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Welcome to the monthly update of our journey to financial independence, where we report on the progress of our FI tree, aka Freedom Fund. Our mangoes are almost ripe and our goal is to reach financial independence by July 2017. This means that we’ll have enough investments to live off of without ever having to work again to pay for living expenses. We’ll consider ourselves financially independent when our Freedom Fund is able to support our lifestyle indefinitely. Our Freedom Fund is comprised of all of our income-producing assets such as index-based investments, short-term reserves and a real estate property.

Hola, Enchumbao readers! We didn’t plan to take a month off from posting but it was nice to unplug from the blog. What did we do in December? Gift shopping was not on our list, so it was a very relaxing time of the year. We started a new morning routine and will have a few posts coming up over the next couple of months, but, first, let’s see how the Freedom Fund did in December.

Cheers to the beginning of a new year, which also marks the beginning of the end of our life stage before retirement. There’s no doubt that we’ll be reaching financial independence this year and that will set our other goals in motion.

Quarterly Earnings Report

The quarter end is an exciting time for us because we get to collect our dividends. These are the fruits of our hard-earned money. Our earnings for the quarter were $9,084.66.

Our goal is to reach an annual dividend amount of $17,500. The chart below shows the total earning for 2016. After I checked the dividend category in Mint I realized that the Personal Capital transactions were off by about $100, so I went with the Mint transactions instead and made adjustments for the previous quarters.

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Our total earnings for 2016 were, drumroll….

$18,130.30!!!

Pero esta vaina si se puso buena! Muy buena.

We have reached our dividend goal! This is awesome! We’re able to get over $18,000 a year in dividends and interest so far and we’re not done with the accumulating stage yet.

The little dividend stream that started 10 years ago and looked very insignificant is now a major part of our passive income streams! Most of these dividends are generated in our retirement accounts and can’tt be accessed without incurring penalties. However we should be able to tap into them in early retirement by taking advantage of loopholes.

We’ll continue to invest according to our asset allocation and any investments over our Freedom Fund goal will be used for buying a house in the future.

Freedom Fund Progress

Percentage of Freedom Fund reached in December

The reporting fun is not over yet. That was just an earnings update. Now, let’s get into our Freedom Fund update! We had a spectacular year end with a strong market return. Our Freedom Fund jumped to 97% in December! That’s a 3% increase from the previous month.

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If we were to retire today, our investments could cover annual expenses up to $34,004 a year. That puts us $996 shy of our annual income goal of $35,000! We are less than a $1,000 away from our goal. What a great way to begin 2017! We could be declaring financial independence next month, way ahead of our goal of July 2017.

Progress made in 2016

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Since the market did nothing for us in 2015 (we had a flat year of returns), I got used to us carrying the full weight. It was a surprise to feel the market help lift our net worth. Our total rate of return for 2016 was 9.23%.

The road ahead

We’re feeling FI in the air. The first piece of the “FIRE” puzzle is about to drop. We’re almost at a point in our lives that we can choose when to work, if we want to work. The next two years are going to be very exciting for the Enchumbao household. Stay tuned!

What were your financial goals for the month? Did you meet them?

Risk disclosure: All investing involves risk, including the loss of principal. The material contained on this website is for discussion purpose only and should not be misconstrued as financial advice.

Featured image by Markgraf-Ave
First post image by  Sarangib

Please like & share:
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Mr. Enchumbao

I work for a large investment management company helping people save for traditional retirement. During my spare time, I help others save for financial independence and early retirement by writing for Enchumbao. My journey to FI began in 2012. I was in a lot of debt back then, but I turned things around and became debt free a few years later. My wife and I reached financial independence in 2017 and are preparing to retire by 2020.

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2 Responses

  1. Bob :) says:

    This is a great article, thanks for share. In your article you mentioned using loopholes to use the investments, where did you learn of the loopholes and what are they? Or do you have a suggestion of where I can look for them? Thanks

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