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
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*:
|Cell Phone||$ (50.00)|
|Total Expenses||$ (2,550.00)|
|Net Rental Income||$ 500.00|
|Dividend Income||$ 100.00|
|Interest Income||$ 50.00|
|Side Hustle||$ 50.00|
|Total Monthly Income||$ 700.00|
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.