I have been tracking our monthly dividend and interest income since 2015 and only started posting the figures from Jan 2016 on this blog. This is exciting for me to write because I just realised our monthly passive income has exceeded S$1,000 in Apr 2016. First milestone reached!
We received a coupon payment from one of our corporate bonds and dividend income from our index ETFs and shares in one of the telecommunication services companies we are invested in. Together with the interest income from our bank accounts, our monthly passive income has hit S$1,000 for the first time.
I have been tracking our average monthly passive income for 2016 and it might end the year at S$800. I guess the second milestone would be for this to reach S$1,000 as well by 2017. Currently, our average monthly expenses (taking into account all types of costs) is about S$6,000. I just realised we have to increase the average monthly passive income by S$500 every year for the next decade for it to be able to cover our average monthly expenses (assuming this does not increase) by the time I hit 40 years old.
That will require a more aggressive allocation to our ETF and share portfolios for this to happen. It also assumes sufficient cashflow for investment every year with minimal cashflow drain from possible life events like having children, job loss, medical and other emergencies. Even just writing this assumption out makes me question how workable it is.
Which is why it helps for me to record all these down. We are testing this theory of financial independence over a long enough time frame of 10 years. If it is a success, I want us to know how we achieved it from this starting point. If it is a failure, we will have another 10 years to learn from our mistakes and make it work the second time round.