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

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.

Hello, dear readers! We didn’t intend to stop posting for a month, but it was nice to disconnect from the blog.

What were we up to in December?

Since gift shopping was not on our agenda, it was a very relaxing time of year. We started a new morning routine and will have a few posts up in the coming months, but first, let’s see how the Freedom Fund performed in December.

Cheers to the start of a new year, which also marks the beginning of the final stage of our lives before retirement. There’s no doubt that we’ll achieve financial independence this year, which 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 target dividend amount is $17,500 per year. The graph below shows the total earnings for 2016. After checking the dividend category in Mint, I discovered that the Personal Capital transactions were off by about $100, so I used the Mint transactions instead and adjusted for the previous quarters.

In 2016, our total earnings were….


We have met our dividend target! This is wonderful! So far, we’ve been able to earn more than $18,000 per year in dividends and interest, and we’re still in the accumulating stage.

The small dividend stream that started ten years ago and appeared insignificant is now a significant part of our passive income streams! The majority of these dividends are generated in our retirement accounts and cannot be accessed without penalty. However, we should be able to access them in early retirement by exploiting loopholes.

We will continue to invest according to our asset allocation, and any excess funds will be used to purchase a home in the future.

Freedom Fund Progress

Percentage of Freedom Fund reached in December

The excitement of reporting is not yet over. That was simply an earnings update.

Let’s get started with our Freedom Fund update!

We finished the year on a high note, with a strong market return. In December, our Freedom Fund reached 97 percent! This represents a 3% increase over the previous month.

If we retired today, our investments could cover up to $34,004 in annual expenses. That puts us $996 short of our $35,000 annual income goal! We are only $1,000 short of our goal. What a fantastic way to start the year! We could declare financial independence next month, far ahead of our July 2017 target.

Progress made in 2016

Since the market did nothing for us in 2015 (we had a flat year of returns), I became accustomed to us bearing the full burden. It was unexpected to feel the market’s intervention in increasing our net worth. In 2016, our total rate of return was 9.23%.

The road ahead

We can sense FI in the air. The first “FIRE” puzzle piece is about to fall. We’re almost to the point in our lives where we can choose when and if we want to work. The next two years will be very exciting for this family. 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 purposes only and should not be construed as financial advice.


After dedicating 13 years of his career to Vanguard, José retired from the corporate world at the young age of 44. During his tenure at Vanguard, he expertly coordinated the production of both electronic and print educational materials for 401(k) participants. Now, he relishes in his early retirement, cherishing time spent with his family, indulging in his favorite hobbies, seeking out new experiences, and savoring meals in the comfort of his own backyard.

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Bob :)
Bob :)
7 years ago

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

7 years ago
Reply to  Bob :)

Hi Bob,
Thanks! The loopholes I’m referring to is the Roth Conversion Ladder. By doing this you can basically access your 401(k) funds 5 years after you retire early and without penalties. Mad Fientist has an awesome article explaining all the different ways to access your retirement funds prior to traditional retirement age. Here’s the link to the article: http://www.madfientist.com/how-to-access-retirement-funds-early/

Thanks for stopping by…

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