2024 was indeed a great year for investors, with the S&P 500 going up more than 23%. Many people, including myself, didn’t think that 2024 could top 2023, but we were pleasantly surprised. This just goes to show the importance of keeping investing and staying committed to your financial goals.
One key aspect of achieving financial independence is passive income. Passive income is income that is earned with little to no effort required to maintain it. Once your passive income surpasses your cost of living, you have achieved financial independence. This means that money won’t be an issue anymore, and you can live life on your own terms.
In my case, I retired before our passive income reached that level, but I had an alternate source of income through my blog. Over the last 12 years, early retirement has worked out very well for me and my household income has been good, allowing us to keep investing and triple our net worth.
In 2024, our passive income performed well, with our spending coming in lower than expected. This allowed us to save more than our annual passive income, which was a great achievement. However, we have some big expenses coming up in 2025, particularly with our son graduating high school and going to college. We are saving for this and hope to have enough funds by then.
Our passive income streams include Mrs. RB40’s full-time work, my blog income, and various investments such as real estate crowdfunding, dividend stocks, and rental properties. Our FI ratio, which measures our progress towards total financial independence, was at 121% in 2024, indicating that we are on the right track.
Real estate crowdfunding has been a solid passive income stream for us, with investments in apartment renovations through platforms like CrowdStreet. Dividend income has also been stable, although I have shifted my focus to overall portfolio growth for now. Rental property income has been good, but we plan to sell one of our properties due to market conditions.
Looking ahead to 2025, we anticipate a transitional year with potentially lower passive income. However, we are prepared for this and will continue to monitor our investments and adjust our strategy as needed.
Overall, 2024 was a successful year for us as investors, and we are optimistic about the future. Passive income is key to achieving financial independence, and we will continue to focus on building and diversifying our income streams to secure our financial future.
