Making Money Makes Money [April 2014]

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Making Money Makes Money [April 2014]

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I have a goal. Spend an average of $25 per day each month. Reducing my expenses to this level is what makes financial independence feasible in just a few years.
I invest roughly 80% of my after tax income on high quality dividend stocks. Most of these stocks pay between 3-5% annually, and have consistently raised their dividends each year for the past several decades.

So how is it feasible that I can be completely financially independent in just a couple years? Let me give you a reasonable best case scenario. I reduce my expenses down to $7000 per year and my average dividend percentage is 4%. Assuming my stocks will increase in value proportional to the rate of inflation, all I need to do is get $7000 per year from dividends…
$7000 / 0.04 = $175,000 invested.

How long will it take me to invest $175,000 at my current rate?
3 years

Less time than I spent in college.

March was the first month that I received a monthly dividend (shout out to Exxon Mobil). I received about $18 in dividends and spent close to $800.

Now the April 2014 update!
Expenses: $866.62
Dividend Income: $35.72

Percentage of Expenses paid by dividend income: 4.1%

J Curtis Webb Passive Income Growth

A healthy dose of growth towards financial freedom. My budget for April was only $750, but after running a red light and dishing out $125, it was pretty difficult to recover and keep expenses under. For May, the budget is $775, I can hit it.


3 Comments

Andrew

May 1, 2014 at 4:03 am

Dude, this is impressive. I’m home for the weekend, let’s talk about this sometime soon, I’m actually interested in learning more.

Josh

May 1, 2014 at 10:35 am

Thanks, Andrew.

I’m so excited to finally start seeing progress.

$35 a month from dividends is not very much, after-all, I spend $25 a day. Soon that number will be 10X that amount. It just takes time.

    Ram

    December 11, 2014 at 3:19 am

    It has been a pleasure to read your alctires and I hope you will be here writing much longer than the next five years. You are a weekly read here and have helped to give me the kind of focus I needed in my investing, whether or not I invest in a stock you hold, or agree with your particular view on a individual investment. You have taught me to ‘fish’ a little better than I did before and it is the teaching that is most important. I have learned a lot from you.I wish you and yours a joyous Christmas, a Happy Holiday Season and a very Happy New Year!Andy

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