Friday, February 6, 2015

Freedom Check - January 2015 (Largest Gap So Far)

At the end/beginning of every month, I will update the status of my freedom fund as a way to stay accountable to you and myself. Assuming everything else remains constant, the freedom fund is based on the number of months that I am able to sustain myself without income.

Freedom Check - January 2015

Income = 100%

Family = 8.9%
Personal = 0%
Rental = 13.8%
Food = 8.7%
Transport = 1.7%
Cell = 0.3%
Household = 0.6% 
Travel = 1.8%
Misc. = 0%
Shopping = 0%

Contribution to Freedom Fund = 64.2%

Value of Freedom = 14 months 

Commentary: It looks like I've come a long way since I first started tracking my income & expenses. As you can see form the chart above, the gap between income & expenses is expanding at a rate that is faster than expected. 

Income hit an all time high due to bonus payment from the rat cage while expenses are fairly moderated. I feel that my expenses cannot be optimised further without reducing the quality of life, thus it's safe to say that expenses is almost at the most optimal level. Therefore, I'll have to redirect my focus on increasing income.

This year, I'm trying to hit an average savings rate of 50%.

Let's see how it goes!

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  1. I'm sure you'll do it. We were able to hit 50% last year (including my employer 401k match at least). I know we didn't hit the # every month, but the best months were the two 3-paycheck months and using my bonus wisely. If only I'd been doing this since I were your age though!

    1. Hey Chris, I'm trying really hard to hit that elusive 50%, but with a few adjustments here and there I hope to make it by the end of this year. Rental is something that is pulling my savings down. Gotta do something about it.

      And wow, two 3-paycheck months?!? Where do I sign up?

      Haha, anyway I gotta start doing some eBay side hustlin soon like what you're doing.

  2. Welcome to 1+ years. If I quit my job today, I wouldn't need another one until late 2022. This is a feeling most people don't understand.

    1. "This is a feeling most people don't understand"

      Amen to that!

      Until late 2022, that's amazing. Looks like you're far ahead in this journey towards ultimate freedom.

      Thanks for dropping by btw. Comments like this give me the conviction to keep pursuing this journey which can be lonely at times.


  3. Anonymous has nailed it... the freedom to technically do nothing for 14 months if you so choose.

    As for three-pay months, those are standard for folks who get paid bi-weekly, where you get 26 versus 24 paychecks for semi-monthly. Each year you have two months that have three pay checks get delivered. Nice little built in bonus if you're used to budgeting off of the two-paycheck months.

    All you need to add to your chart now is a second y-axis and a value of freedom line mapped against it. Up, up, and away!

    1. Hey W2R, that's totally right! The snowball is now gaining momentum and soon it will be 14 years and to infinity.

      Aha, now I get what Anonymous was referring to about the three-paycheck months. That's certainly a nice bump in total income.

      I've been thinking of adding a freedom line (dividends received) to it, but right now I'm really torn between a dividend-growth model or an index-fund model.

      Thanks for dropping by. Your dividend-growth portfolio looks solid.

    2. Regardless of how you plan on investing, be it index or dividend growth investing, you can track the monthly progress of your 'months of freedom' number. This month is 14, next is 16, etc. Should provide a nice parabolic curve over time.

    3. hmm, that's not a bad idea.

      Previously I thought that if I were to go for a dividend growth model, then the dividends will reach an intersection point with my expenses - thus freedom.

      But I think I can implement that 'freedom months' line into the chart. It should look sweet!

  4. Replies
    1. Thanks, gotta keep this whole system going.