1,5y ago when I started this blog I posted Why Y2035 and calculation behind it explaining what is the meaning of sites name and the calculation of how things will look like when I will turn 50 years old. Lets have a look at the chart once again.
Our portfolio was 22 kEUR value and I have calculated that if I were to continue investing 200 EUR/mo into shares that pay 4% dividend yield and increase their dividends by +5% each year with dividend reinvestment, also 170 EUR/mo contribution to pension funds with 3% annual growth and at the end all money going to dividend shares with 4% years our portfolio should reach 166 kEUR and should generate 9 kEUR dividends annually. Lets see were we are today and recalculate the numbers.
- Portfolio value has increased from 22 kEUR in Y2016 to 30 kEUR in end of Y2018
- YOC stands at 3,9% with US companies paying only 3,1% (Whithout T with high yield and biggest exposure would be even less)
- Y2018 Dividend increases for US companies stands at only +4%, Baltic are not calculated as totally unstable.
Let’s see how the number change when dividend yield is set to 3% and growth to +4%.
As you can see portfolio value declined to 154 kEUR and projected income to 7.2 kEUR or only 600 EUR/mo. That is less then 1/3 of our expenses today or our expenses 😦 Now that sucks. 2y has passed and situation regarding financial independence has not moved that much. I could even argue that is has deteriorated a bit. As the old saying says – its back to the drawing board 🙂
Possible options to reach Financial independence in Y2035.
- Decrease expenses by -29% – with flat 25 kEUR income we need to decrease our expenses from 21 kEUR to 15 kEUR and invest remaining 10 kEUR or 833EUR/mo to get 15 kEUR of dividend income in Y2035.
- Increase income by +40% – keeping 21 kEUR expenses flat and investing whole difference we need to increase our income from 25 kEUR to 35 kEUR saving and investing remaining 14 kEUR or 1.166 EUR/mo.
- Combination. Increase income by +20% and decrease expenses by -14% – We need to increase income from 25 kEUR to 30 kEUR and decrease expense from 21 kEUR to 18 kEUR investing remaining 12 kEUR or round sum of 1kEUR/mo.
- Look for investment with more returns, ex. rental property, shares with higher dividend growth ect.
Let’s see how thing will go. Either way staying with same 200 EUR/mo investments is to low, but either way more them most of people are doings. Even with 600 EUR/mo passive income when I will turn 50 that will be a real achievement 🙂
Project 2035 
Good luck on reaching your goals by 2035. It’s still pretty early but you’re doing the right thing by making assessments and adjusting as need be.
I love the graph by the way. It’s a great visualization of where you need to be year by year. Let’s hope 2019 is a better year than 2018 was.
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HI, DP. I wouldn’t say that Y2018 was bad in investments as well. My portfolio stands at 30kEUR, which was the same amount projected 2y ago so i’m in line with my investments. Its just that my dividend yield and dividend increase is lower then estimated.
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I like the way you set these up when I grow up I want to be able to evaluate the market as you guys do. Been following along your blogs and y’all really do have a great understanding of what you want to accomplish.
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Thanks Brandon 🙂 Set goals and do everthing to acomplish them and you will suceed 😉
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Hi P2035,
It’s great that you have a plan and try to adjust it based on changing expectations. I should do the same but currently just keep investing as much as I can. I guess I am afraid to see that I will not be able to achieve financial independence as early as I would like to 😀
I just have one question regarding pension in 2nd pillar. As far as I know, you will not be able to take it out when you are 50. If I understand correctly, you will only be able to get monthly payment when you reach the pension age. So I don’t think you can convert it to your own stocks in 2035.
Anyway, I think you’re on good track and will be in a better situation anyway due to saving and investing part of your income 🙂
BI
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Hi BI. Your touhts are correct re 2nd pension. But I hope that system will mature to yout us K401 by ten an I will be able to do that 🙂 There is a reform ongoing and there is a possibility to take the 3% in cash and maybe invest in dividend shares. but there is a tax benifit + state motivation with aditional 1,5% atachment. So Im not sure what im going to do with thouse 3%.
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I think it’s a good thing to reevaluate a few times if your still heading in the right direction.
Keep in mind that your expenses will rise (and fall) with the life phase you are in. Ideally at the last phase you would have your mortgage payed off and the kid(s) will have moved out drastically lowering your expenses.
And if you don’t fall in the lifestyle creep trap, you should turn out great. Just keep up the grind with a smile and keep adding to your assets.
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Thanks mate. Same goes to you too 🙂
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