Passive Income - Race from $10k to $40k per year

[Money Badger]

@farmecologist Over 4% is quite nice indeed compared to the last 15 years or so!   There's still quite a bit of risk vs. reward gnashing of teeth that's causing some real chances for value investing at long last as well.   The tricky point is knowing when to be greedy as others are fearful as no one ever times it perfectly.   

At this end, my passive across all accounts is now crossing $5K/month which sounds great compared to where we were at start of this challenge.   But only about half of this is tax exempt passive income though.  And MLP and REIT payments aren't guaranteed by any means.   So we just keep putting cash to work slowly in bites after each Fed hike or bad news so we overshoot on FIRE income and I'm accumulating enough positions in the IRA stock funds that are "on-sale" for long-term growth (VTI, BRK.B, etc.) 10+ years out.  Meanwhile, as I replace salary with passive after-tax $, I've been increasing my 401K % to max it out this year by August.   That's about the point where I hit the FIRE number for income consider taxes and healthcare and either jump or declare OMY.   Will be interesting to see if or when HR or someone asks me why.   ;-)

[farmecologist]

@farmecologist Over 4% is quite nice indeed compared to the last 15 years or so!   There's still quite a bit of risk vs. reward gnashing of teeth that's causing some real chances for value investing at long last as well.   The tricky point is knowing when to be greedy as others are fearful as no one ever times it perfectly.   

At this end, my passive across all accounts is now crossing $5K/month which sounds great compared to where we were at start of this challenge.   But only about half of this is tax exempt passive income though.  And MLP and REIT payments aren't guaranteed by any means.   So we just keep putting cash to work slowly in bites after each Fed hike or bad news so we overshoot on FIRE income and I'm accumulating enough positions in the IRA stock funds that are "on-sale" for long-term growth (VTI, BRK.B, etc.) 10+ years out.  Meanwhile, as I replace salary with passive after-tax $, I've been increasing my 401K % to max it out this year by August.   That's about the point where I hit the FIRE number for income consider taxes and healthcare and either jump or declare OMY.   Will be interesting to see if or when HR or someone asks me why.   ;-)

We have maxing out our 401Ks (pre-tax) for years....best thing we have ever done.  The tax savings alone has been absolutely tremendous.  And we anticipate having much lower income in retirement...so I'm not really worried about taxes all that much.  Full disclosure though...I'm one of those that doesn't buy the Roth narrative.

Also, I honestly don't know how "local" banks with many brick and mortar locations are going to stay in business, long term.  They just are not paying diddly squat for savings accounts, etc...  We moved over to Sofi ( 4.20 percent ) and couldn't be happier.  Laziness is a thing in terms of moving accounts though...so I'm assuming the local banks will survive for a while.   

[GilesMM]

VTSAX pays about a $0.40 dividend so you would need a lot to live off dividends, versus a 4-5% SWR.

[RWD]

2014: $1,148
2015: $2,963
2016: $4,964
2017: $7,509
2018: $10,968
2019: $16,256
2020: $17,611
2021: $22,468
2022: $23,622

Trailing 1 year:
2023-Q1: $25,192
2023-Q2: $26,920

Recalculated Q1 a little higher. Q2 seeing further increases. I assume this is still because of the money market rates. This year is a little weird with moving to a new house.

[McStache]

2016: $2,367
2017: $3,270
2018: $6,456
2019: $8,329
2020: $8,034
2021: $14,465
2022: $12,616

Trailing 12 months:
2022 Q3: $11,587
2022 Q4: $12,616
2023 Q1: $12,998
2023 Q2: $13,297