Passive Income for 2017

For about three years now, I have been tracking the total dividends received annually. The idea is that once I manage to hit a "magic" six-figure sum as passive income, it would be time to hang up the gloves, so to speak.

The first year of doing so was utterly demoralizing.

It was the January of 2015, and I was in a bad shape financially. I had emptied most of my savings on a down-payment for a condominium and burnt through another 30k on a wedding (which did not materialize by the way, don't ask).

It was at this ultra low point of my life when I decided I needed a formalized plan for financial freedom. Merely talking about it is not enough. Taking haphazard steps towards it is not enough. Making some progress without a benchmark is not enough. I needed a real, solid plan. One with valid assumptions, credible modelling, and multiple checkpoints to properly monitor my progress.

Enter the FUM Spreadsheet (FUMS). Or known as the Fuck-You-Money Spreadsheet. The basis for the name appears to be self-explanatory and need not be elaborated herein.

The FUMS is, at least in my view, rather comprehensive and conservative. It estimates the amount of money I am able to sock away as "investment capital" each year, estimates a yield based on the total invested capital at the start of that year, adds that to the estimated savings of the year, and informs me what should be my "ideal net worth" at the start of the following year. Rinse. Wash. Repeat.

So you could say that every January is a checkpoint. A simplified version looks somewhat like this: 

Age at end of the year	33	34	35
End of Year	2015	2016	2017
Starting Capital	$80,000.00	$225,600.00	$381,392.00
Injected Capital	$140,000.00	$140,000.00	$170,000.00
Yield based on starting capital only	$5,600.00	$15,792.00	$26,697.44

For instance, I had started 2015 with 80k in my war chest. I estimated that I would be able to save up to 140k in 2015. Based on a (generous) estimated 7% yield on the starting capital of 80k, I estimated that my passive income of 2015 would be a miserable 5.6k.  Therefore, ideally, I should begin 2016 with around 225k net worth (excluding equity in my property).

Yet, the reality of it all was that I only managed a paltry 4.7k in dividend income for 2015. Off to a bad start.  Even more demoralizing was the realization that, at 4.7k passive income, my monthly passive income was a sad, sad, $391.  And this was after one year of aggressive saving, equity researching and time-consuming portfolio building.  DEMORALIZING is understating it. FIRE seemed so far away.

But my fellow FIRE compatriots, fret not. For FIRE awaits those with the patience and tenacity to see it through.  It will always start slow.  But it gets better as long as you don't give up. Always keep your end-goal in sight and in mind.  Even while at work, i leave the FUMS open on my desktop window to constantly remind myself why I put myself through the shits.

By 2017, my total passive income had grown significantly. By my own estimate, I expected to receive around 26.6k in dividends in 2017. Due to a combination of good timing and consistent investing, I managed to receive $30,581 as dividends in 2017.  By a stroke of fortune, I also made a timely investment into OCBC when it was trading in the 8 dollar window and sold it when it rebounded to $10. The capital gain in 2017 was $18,864.

Accordingly, my total passive income in 2017 was $49,445 (around $4,120 per month). 

While this does not permit one to retire as yet, the passive income does take care of most of my fixed liabilities and taxes; allowing me to save even more of my earned income for investment.