February Cash Flow Index Update – In The Green

divnomics CFI february

Since the start of this year, I’ve started to track our progress differently. Instead of a hard FI target in terms of a big pile of money, we focus on cash flow only. Tracking our net worth every month, wouldn’t give the right insight into how much we need until we reach Financial Independence.

Normally you would say that as soon as (passive) income exceeds your spending, you’re there. Well, in our case we look at that a little differently. For starters, we want to continue investing after we stop working, so we need additional income. Secondly, our spending fluctuates and will be higher after FIRE than before. We are pursuing a Fat Fire lifestyle after all. To incorporate this effects, I’ve thought of tracking our progress with the help of the Cash Flow Index.

With the index, I’ll set a fluctuating target per month, based on our expenses of that same month. And add a margin on top of it to make sure we can afford that fat fire lifestyle in the future. As our expenses might grow over time, so does our target. The moment we continuously hit an above-target-result we are pretty sure we have reached that point where we can call ourselves officially financially independent.

The Cash Flow Index is based on our expenses (+ margin) for the past month and connected to our calculated net income from investing. Basically, we check how much of our income from investments, is covering our expected expenses after we reach financial independence.

We can achieve a higher Cash Flow Index in two ways:

1.Β  Having lower personal expenses

2. Increase our rental income

Although we’re always happy if we find something that saves us money without reducing our living standards, we are more focused on growing that rental income.

If you’re curious about our progress in real estate investing, it’s featured in its own update every month.

For January I had calculated a Cash Flow Index of -11.9%. Property #2 wasn’t rented out yet in that month, and we had some rebuilding costs to cover. Resulting in a negative cash flow for the month.

However, I think I might have forgotten about some hidden costs back then since my calculations show a different number now. Something went wrong there… The Cash Flow Index for January had to be even lower!


We went from having a Cash Flow Index of -12.48% in January to a positive ofΒ +15.64% in February. We had no major costs to cover for this month and we received full rental income from property #2 for the first time. With two rentals and low real estate costs, we are already covering around 15% of our trajected expenses we need for Financial Independence.

As a target for this year, I want to achieve a Cash Flow Index of (at least) 40%. This is quite ambitious, as every percent more has to come from buying new properties and renting them out. However, the income from property #3 is not included yet, and we still have more than 9 months of the year left to go!

What else has happened – a few updates

On Reading

Some new books have come to my attention, and onto the reading list. Of which one of them is really interesting for everybody that wants to do something with real estate investing: The Property Entrepreneur by Vincent Wong. He shares some valuable lessons and is going deep into the right mindset to grow a real estate, or any, business.

Two other books I’ve bought are Meditations by Marcus Aurelius, and The Wealth Dragon Way, also by Vincent Wong.

Buying more books won’t help me to reduce my reading list. What you do with knowledge is more important than how much you read. So, I’m not too worried about that.


In February we went to Leuven (in Belgium) to attend the first ever BE/NL FIRE Weekend! Yup, two days of Belgian beers, talking about money and meeting interesting people. Got some interesting new insights from it as well. Like how permaculture can actually be something valuable (who knew!?) and that ethics in investing are more complicated than it seems.

If you want to join this local FIRE meet-up, the organizers, Cheesy Finance and Amber Tree Leaves, already set a new date in June. Let them know if you want to come.

On Blogging

On the FIRE weekend in Leuven, several people have been asking me when I will change the blog name since dividend investing isn’t our game to play anymore. So, I decided to get into action. Last month I’ve already bought myself a new domain name. And in the coming weeks/months, I’ll be working on a new version of Divnomics. It will take some time for it to go live (plan to launch in June) but you’ll be the first to know!

16 thoughts on “February Cash Flow Index Update – In The Green

  1. So there is actual money flowing into the Divnomics (curious about the new name) household! 40% by the end of the year? That is aiming really high! Curious to see where you will get.


  2. Aiming for FAt Fire… Talking about an ambitious couple!

    I look forward to read your progress this year in the quests to get to 40 pct…

    And on comparing to the expenses that month: does that mean when you pay a holiday in a month, the index will have a major drop?


    • The expenses include about everything. So the index will indeed face a major drop when expenses are higher than normal. For this month we have to pay our wedding venue for example…


  3. 40% by the end of the year? That’s quite an impressive target! Is it already net cash flow after deducting costs? I’m really interested in the details πŸ™‚


    • The investment income we use is indeed after deducting costs, so net cash flow. We hope to buy some more properties this year, and with every buy the index will shoot up (hopefully).


    • Honestly? I don’t really know haha. We hope in 3 to 5 years from now. Rentals will give us the advantage to build it up faster. So, I expect we will receive our (passive) income entirely out of rentals by then.


  4. Hi there, is FAT FIRE the opposite of FRUGAL FIRE? If yes, I love it!
    I always say I’m aiming for FI with a hefty travel budget but Fat FIRE sounds so much better πŸ˜ƒ
    I’m with you re real estate investing. My plan is also based on rental income. The great thing about rent is that it fluctuates with inflation so it’s a safe form of passive income for the long term.
    Good luck with your tough goals. Aim high!


  5. I have the same goal, a bit before the end of the year 40% of my expected future expenses covered by my real estate investment. In our case, the expected expenses are lower than the current because of geographical arbitrage! Real estate is amazing and addictive! I can’t find a more exciting investment with an interesting yield/risk ratio! Good luck with property #3 πŸ™‚


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