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.
Many who seek the freedom through FIRE are loving the way of slow life. Not having the urge to tick every box, the hassle when you go out, or the need to plan everything due the limited time you have available. January is one of those months where it feels like the daily life is getting by slowly. Then again, after the speed lane called December. Everything feels like a slow month. It’s just getting back to normal.
You could question how normal our lives really are. Everybody working their way to financial independence aren’t doing the ‘normal stuff’. They take side-routes, alternative ways and think of new methods to ditch the 9-to-5 route a lot of ‘normal’ people are taking.
Three years ago that side-route opened up for us as well. Starting with index trackers, then entering dividend growth investing. And now… Real estate investors working on growing that not so passive income.
If you have ever played Monopoly or the Kiyosaki Cash-flow Game, you know the most important part of winning either game is having enough assets that provide a stable income. In the case of Monopoly, it’s to build the biggest cash flow portfolio in the form of real estate. And in the case of the Kiyosaki Cash-flow Game, it’s making wise money decisions to be able to quit the rat race for good. Both are needed in the journey to financial independence.