Last year I wrote a post in which I calculated when I would reach FI. I want to track my progress, so lets do the same calculations with recent numbers. I want this be a (yearly) returning blog post, so I used the numbers of January 1th of each year.
I crunched these numbers and calculated the future value of my Vrijheid Fonds for the year I will turn 50 and for the year I will turn 65.
When I know these values I can calculate my future dividend in these years. I’ll need about € 40,000 per year to keep up the same life style. So my Vrijheid Fonds needs to be approx. € 1,1M before I can live of my passive income.
With a weighted dividend Yield of around 3.5 % and a weighted average dividend growth rate of around 7% a yearly growth of 12% must be do able.
| 2015 | 2016 | |
| Value | €55,050 | €63,965 |
| Weighted average Yield | 3.66% | 3.57% |
| DGR | 6.92% | 6.86% |
| Yearly fresh capital | €5,000 | €5,000 |
| Yearly growth | 12.00% | 12.00% |
| Future value 2023 | €185,000 | €192,000 |
| Future Dividend | €6,800 | €6,850 |
| Future value 2038 | €1,200,000 | €1,236,500 |
| Future Dividend | €44,000 | €44,100 |
I still cannot retire when I turn 50 (booh, booh). One year of hard work resulted in approx. €7,000.- of extra future value (in 2023). It is small, but it still is some extra value. And thus some extra future dividend. I hope that next year when I make these calculations I ‘m able to say. I can retire at least one year earlier.
What can I do to speed this up? Keep pumping in fresh capital as much as possible and as early as possible. So this is what I’m going to do.
At what age do you reach FI?
What is your advice for me, to reach FI sooner?
Cheers,
Pollie
It is a good idea to review this each year. In our case, it was also a stable outcome…no FIRE one year earlier…
We plan to FIRE in 2019, age 53 by then… We might work on our expenses by then, maybe we can shave off an extra year or 2.
A stable outcome is always better than a negative outcome. I try to always think positive!!!
You’re almost there. And I agree it is not only about income is is definitely also about expenses.
Good luck and keep sending updates.
cheers,
Pollie
Using somewhat conservative estimates I expect full FI will be around 50 if all else remains the same. I have a little spreadsheet with my own dividend growth model but I find the outcome fluctuates a lot based on the assumptions I make in terms of future dividend growth, share price growth, average starting yield, yearly inlays and future dividend tax rates. In reality, it’s hard to model as the stock market doesn’t move straight up.
I revised the dividend yield downwards a bit after my experiences with KMI and BLT, the goal I had in mind for my after-taxes dividend yield was simply too high in the current stock market climate. At the same time, a lot of stocks in my portfolio have either frozen the dividend or reported dividend increases in the low single digits.
Thanks for your comment. Yes it is not an exact science 😉
We cannot look into the future (too bad). There are two thing we can do to influence the outcome. First is to pump as much fresh capital as earlier as possible. And second to cut our expenses.
About the slow DGR. I have a couple of companies with slowing DGR. But I’ll take a little increase above a frozen (or even worse…) every day.
Cheers,
Pollie