2024 was a good year for investors. The S&P 500 is up over 23%! I didn’t think 2024 would be ahead of 2023, but I was completely wrong. That’s why you need to keep investing. However, our passive income has also done very well. After all, we spent less than our annual passive income. That was great. However, we have changes coming in 2025. See details below.
Passive Income is the Key
A minimum wage is the key to early retirement. If your income exceeds your living expenses, you have achieved financial independence. Money will no longer be a problem and you can do whatever you want. I retired before our minimum wage got there, but I had another source of income – blogging. Fortunately, early retirement has worked very well for me over the past 12 years. Our take home income was good so we continued to invest. That has tripled our value in this period and we are now financially free. However, we have big expenses coming up. Our son will graduate high school and go to college in 4 years. That will be expensive, but we save it for you. Hopefully, we will have enough by then.
Currently, we support our modest lifestyle with a combination of these income streams:
- Mrs. RB40 fully functional. He took a sabbatical in 2022, but he’s not ready to retire just yet. He will probably retire when our son graduates from high school.
- I work on my blog a few hours a week and generate a small income online. I also have other small competitions.
- Net income from our investments – real estate crowdfunding, dividend stocks, and rental properties.
*FI rating = income / expenses
FI rating
The FI measure is a simple measure of progress value financial independence. Once we reach 100%, it may give Mrs. RB40 confidence enough to stop working full time. He still doesn’t believe me when I tell him he can retire today. Personally, I think a 100% FI rating is overkill, but it’s better to err on the side of caution. In general, financial independence means saving about 25-30 times your annual expenses, which we achieved in 2012.
2024
- Income = $76,523
- Consumption = $63,086
- Average FI = 121%
Our FI estimate performed well in 2024. All of our revenue streams were strong. The way we spent money was lower than I thought. Everything came together. I don’t think even 2025 will be successful.
*Sign up for a free account on Empower (used to be Personal Capital) to help manage your net worth and investment accounts. I check in almost every day to check our value for money. It’s a great site for DIY investors.
2024 Passive Income
My passive income spreadsheet.
How We Generate Income
Okay, here’s the good stuff. I will summarize each income stream and keep a separate page for the details. These pages will be updated quarterly. Click the links below to see the latest update.
- Real Estate crowdfunding – My goal is to increase our investment in real estate to $200,000. The last few years were iffy, but real estate seems to be making a comeback. These days, I invest in renovating apartments through CrowdStreet.
- Dividends – Dividend income should be stable over the next few years. I still like dividends, but I will focus on overall growth until Mrs. RB40 retiring.
- Rental properties – Currently, we have 2 units for rent. One of our tenants recently moved out and I am planning to sell the rental condo. This will have a huge impact on this revenue stream.
- Interest – This is the interest from our bank accounts and bonds.
- Tax-advantaged accounts – Finally, I count the income from our retirement accounts as part of our passive income. If Mrs. RB40 retired, we will be able to access these accounts aka Roth conversion. building a Roth IRA ladder.
More details on each passive income program.
Real Estate Crowdfunding Income: $15,278
I started investing in real estate crowdfunding in 2017. My experience has been very good. I think this is a great way to invest in real estate. At this point in life, I no longer want to be a hands-on landlord because working with tenants can be stressful. Maintenance and maintenance also takes a lot of time and effort. Real Estate crowdfunding is passive and donors have the advantage of scale and experience.
These days, I invest with CrowdStreet. They are the leading real estate agency and have many commercial projects to choose from. CrowdStreet is great because you can zone out. I’m not optimistic about the Portland real estate market so I’d rather invest elsewhere in the US
Here is a spreadsheet of my RE crowdfunding investments. Also, some quick guidelines from my experience.
- Don’t do it plant in early projects. You never know what will happen with construction.
- Don’t invest in an office, health, or retail building. Some will work and some won’t.
- From now on, I will invest heavily in apartment renovations. The salary is good and the chance of losing money is less. The sponsor can always sell the house to make some return.
Active housing projects for 2024
- CrowdStreet Washington apartment – This is a project in Puget Sound. They seem ok, but they didn’t send much money last year.
- CrowdStreet Chicago office building – The project has completed renovation, but the commercial office market is in crisis. They made a big call, but I didn’t participate. Recently, they are trying to move around the structure towards the data center market. I’m not sure how this will work, but I don’t hold out much hope. We will probably lose money on this project.
- CrowdStreet Senior housing – This is an investment fund for high-end residential properties. I heard one of the top centers is having a problem. This will reduce the total return from this fund. It’s a little annoying, but some resources do it well. We will have to wait and see on this one.
- CrowdStreet NC apartment – This is a project in North Carolina. It seems to be going well.
- An apartment in Arizona – The project came out successfully and returned a huge profit.
Rental Income: $7,260
2024 has been one of the best years we’ve had as a landlord. The tenants were nice and no problems. We didn’t have a lot of maintenance and repairs either. All in all, it was a great year. However, the tenant is leaving and I am going to sell the condo. Portland’s housing market is terrible. Condo prices haven’t gone up that much in 20 years. It’s just sad.
At this point in life, I prefer to invest in other areas through RE crowdfunding. Owning real estate is a great way to build wealth, but we plan to move to California after our son graduates from high school. Also, I don’t want to be a landlord anymore.
*New investors can start with – How to Start Investing in Rental Properties.
Dividend income: $15,286
Dividend income is my favorite form of income. Investors own a small portion of these public companies and work for you. Recently, I have shifted my focus from profit to overall portfolio growth. Mrs RB40 plans to continue working for a while so we don’t need the income. It is better to delay paying taxes until our income is less. If Mrs. RB40 retiring, I will refocus on income. If you are a new investor, here is a helpful post – How to Start Investing in Equity Shares.
As for replanting, I don’t rub. I just accumulate the dividend and invest in an index fund or real estate crowdfunding.
For new investors, I we highly recommend Firstrade. Firstrade is an excellent discount brokerage that I have used for many years. Most of their trading fees are $0 now. This is good news for new investors. I remember paying $80 per trade when I first started investing.
Taxable income: $35,985
New investors should read this post first.
The money in these retirement accounts is not easily accessible at this time (I’m 51), but it still counts as passive income. When we both fully retire, we’ll build a Roth IRA ladder to access our regular IRAs so we don’t have to pay the 10% early withdrawal penalty.
Passive Income 2024
The year 2024 has been a good year for us. All income was strong. In particular, real estate crowdfunding has come with a good payout from a completed project. However, there are 2 projects that are in trouble so RE’s fundraising is not looking that good for the next few years.
Rent was also very good last year. However, this income will decrease after the employer leaves. I will sell the condo and reinvest the proceeds into something passive.
2025 will be a year of change. Our passive income will likely be lower. I hope our spending will not increase too much. We’ll see how it goes.
What about you? Do you have income?
Real estate investments should perform well over time. We have a housing shortage in the US and people need to live somewhere. Check out CrowdStreet if you want to generate income with commercial real estate. It’s much easier than being a landlord. Although, I am not sure how the rising interest rate will change things. It will probably be more difficult to exit the project if the rate continues to rise. Stay tuned.
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A minimum wage is the key to early retirement. This year, Joe is investing in real estate with CrowdStreet. They have many projects all over the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools to help you achieve financial independence.
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