by Hey there, fellow financial freedom seekers! It’s José and Tatiana here, ready to share our very first passive income report with you. We’re excited to take you along on our journey towards early retirement and financial independence.
Our Big Dream: Early Retirement Through Passive Income
Like many of you, we dream of a life where alarm clocks are optional, and our days aren’t filled with back-to-back meetings. Our goal? To build up enough income-producing assets to cover 25 times our projected annual spending. This way, we can comfortably withdraw 3-4% each year to cover our expenses, all while saying goodbye to our corporate jobs.
Breaking Down Our 2016 Passive Income
Without further ado, let’s dive into the numbers:
- Credit Card Rewards: $395 (Tatiana’s our travel rewards guru!)
- Dividends: $12,201 (Mostly from our 401(k) index fund investments)
- Interest: $833 (From savings accounts and CDs)
- Long-Term Capital Gains: $7,319 (Realized from index fund investments)
- Short-Term Capital Gains: $330 (Also from index funds)
Total Passive Income for 2016: $21,078
Here’s the exciting part: this passive income covered 51% of our living expenses last year! We’re well on our way to that magical 100% mark, which will signal our financial independence.
Our Journey: From Humble Beginnings to Passive Income
Tatiana and I didn’t start with much. We moved to the US just before our teens (I couldn’t even speak English!), and it took a lot of hard work to get where we are today. We both started investing around the same time, before we even met. After a brief entrepreneurial stint, I returned to the corporate world in 2006, and Tatiana joined the workforce right after college in 2007.
The Power of Dividends
Looking back at our investment journey, we’re amazed at how our dividends have grown. Remember, everyone starts somewhere. The key is to begin saving and stay disciplined—that’s when the magic of compound interest starts to work its wonders.
Overcoming Obstacles: Early 401(k) Access
Now, you might be wondering, “Wait a minute, how will you access your 401(k) funds if you retire early?” It’s a great question! While it’s true that traditional wisdom says you can’t touch these funds until you’re 59.5, there are actually some smart strategies to access your 401(k) assets without penalties. We’ll be sharing more about these methods as we continue our journey, so stay tuned!
Looking Ahead: Our 2017 Passive Income Goals
As we move into 2017, we’re excited to explore new passive income streams and grow our existing ones. We’d love to hear from you—what passive income strategies are you planning to implement this year?
Remember, the ultimate luxury isn’t a fancy car or a big house—it’s the freedom to spend your time exactly how you want. That’s what we’re working towards, and we hope you’ll join us on this exciting journey to financial independence!
