How to Track Your FIRE Progress

I always like to be able to set goals and track my progress with anything that I am doing. I find it is a good motivator and a great way to stay focused. With this in mind, I made a spreadsheet to start 2019 which lists all of my cash outflows each month (spending) and all of my cash inflows (earnings). The net of which is my amount of cash I can save and invest each month, the name of the game for 2019 is to see how much I can increase my earnings and in turn how much a can decrease my expenses.

I have set up my spreadsheet in such a way that it even tracks my projected dividend income each month so when I update my shareholdings for any stock purchases it automatically adjusts my projected cash flows. I now have a nice easy way to be able to see my progress each month. Every time I cut expenses or earn more passive income my net cash flow improves and I get to see how much closer to FIRE I can get. Since the end goal is to have my passive income cover my living expenses I have listed my passive income as a percentage of expenses. Each time an expense goes down or passive income goes up I get closer to FI Once that number hits 100% my lifestyle is fully funded so I no longer need to work. I have included a simplified example below*:

Monthly Expenses
Rent $ (1,000.00)
Groceries $ (500.00)
Cell Phone $ (50.00)
Gas $ (200.00)
Insurance $ (100.00)
Entertainment $ (500.00)
Utilities $ (200.00)
Total Expenses $ (2,550.00)
Income
Net Rental Income $ 500.00
Dividend Income $ 100.00
Interest Income $ 50.00
Side Hustle $ 50.00
Total Monthly Income $ 700.00
% FIRE27.45%

As you can see this is a quick and easy way to see how much of your living expenses are covered by your passive income. In addition, each time you cut an expense or increase your passive income you get to watch how you are progressing towards FI.

If you are spreadsheet nerd like me this can be a great exercise to stay motivated and focused. Whatever the way you choose to track your progress I think the important thing is that you track your journey along the way and celebrate your milestones. How do you track your journey to FIRE?

*Of course, if you prefer the rule of 25 you can perform the same exercise. The monthly expenses of $2,550 equate to annual expenses of $30,600, meaning the Accountant needs $765,000 ($30,600 x 25) to reach FI. He can then estimate his net worth, say $200,000, as a percentage of his goal to get his %FIRE of 26.14 percent estimated in this way.

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About the Author: The Accountant

2 Comments

  1. Hey Accountant! Nice to see an article by you. I like this method of tracking how much of your FIRE goal is covered by passive income. Very cool and very motivating!

    By the way, I’m very impressed that you manage to net $500/month from your rental. Is this on a rental property in BC?

    I seriously considered become a landlord in 2017, but NOTHING we looked at was anywhere close to just breaking even!

    1. Hey Chrissy, glad you liked the post!

      My rental in the example is in Victoria, it wasn’t easy to find something that actually cash flows in BC. I had to spend a lot of time looking to be able to find it. It also didn’t produce that cash flow right away, I had to put in some work first. That being said it has turned into a pretty solid income earner for me.

      If you are looking for rental cash flow one thing I would suggest is looking into other markets in Canada. I recently purchased a second rental out in Winnipeg. Prices are much cheaper and it’s far easier to find units that generate cash flow each month. There are some downsides to investing out of province though. I’ll have to write a post about my experience investing in real estate outside of the province you live in.

      Thanks for reading!

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