It’s become a very common theme in the F.I.R.E. community to discuss multiple streams of income. Many believe that you simply must make income while you sleep or you will work forever and never be able to unlock an early retirement or even just a life free of stress related to your personal finances.
So today, we’re going to take a dive into our 7 income streams and give our thoughts on how feasible they are, how much we enjoy them and how we see them as a fit in our future.
After that we’ll take a look at our 2019 income breakdown and 2020 yearly income and go over the differences.
Stream 1 – Mr. FIC’s earned income: This one is straight forward, these are the wages we earn from Mr. FIC’s job in the oil and gas industry. Currently our #1 income source as a family.
Stream 2 – Mrs. FIC’s earned income: Mrs. FIC’s income is a 9 to 5 office job. Thanks to her currently being on maternity leave you’ll see a change in this chunk of the pie down below as we took a fairly significant hit in income in order for her to be home with our child.
Stream 3 – Rental Income: This is the rental income we received from renting out our basement apartment suite. Again, you’ll see a change in the 2020 pie as we had our renters move out and due to us wanting to take some time to acclimate to having a child and not have to worry about noise we were making (he is making) we just decided not to replace the renters. Yet.
I will say that having renters isn’t quite as rosy as some make it sound. We had fantastic renters and even then there’s issues that arise with trying to gain access to the place to check on say furnaces, water heaters etc. that are malfunctioning. I feel quite confident I can troubleshoot and fix quite a few issues with these sorts of things but it can be frustrating when you can’t get access to them due to having renters there.
Stream 4 – Dividends!: As you can tell by the exclamation mark next to dividends we have some extra enthusiasm for this one. Why? Because this is the method of income that has the most impact in our financial plan with the least amount of stress – this may not be the case for everyone but seeing as we don’t really stress over market moves or trying to trade in a high frequency manner this is a very passive and very effective pay raise we’ve been giving ourselves over time.
Stream 5 – Credit Card Cash Back: This one is a little bit iffy to me. It definitely does count as income because we do a good job keeping our spending the same with a credit card as we do without so getting the cash back is an added bonus over purchasing with say cash or debit. A disclaimer here is know yourself – if you can’t responsibly spend on a credit card then please stick to what works for you and bypass this income stream!
Stream 6 – Savings Account Interest: Interest had actually been a decent income stream. Thanks to some strategic moving of funds and getting high interest accounts we were getting 1.90% interest on our savings for most of 2019. That is actually more than you’d get as a dividend with a few of our holdings like Apple or CN Rail so receiving that as a “dividend” on money that is parked in a 100% safe fund is a nice feeling.
That being said thanks to the falling interest rates we’re now only receiving 0.55% interest in 2020 so when you’re talking an emergency fund we expect to build to 6 figures we really do need to come up with a way to up that return just a bit while keeping it safe and accessible.
Stream 7 – Blogging: So here’s the wildcard in our whole journey. First off, we blog for fun and enjoyment not to really actively seek out an income from it – at least not right now. We were pretty surprised to start making any amount of money from this blog and while its not much at this point it is a nice bonus. Over time we would really like to find ways to expand our reach and up our viewership and if that goes along with added revenue then that’s a side effect we’re very glad to have happen.
So let’s have a visual look at 2019 vs 2020:
2019:
2020:
Our goals:
So the first issue we have with this is that Mr. FIC’s income is 85% of our household income at this point in time. This is inflated right now due to us having lost our renters recently and Mrs. FIC taking a large pay cut while on maternity but even dating back to 2019 the 61% is still too high for our liking.
We would love to see this below 50%, while keeping employed of course! We figure that we can make this happen within the next 5 years by raising our dividend income, Mrs. FIC going back to work and eventually getting renters back into our place down the line.
The good news is we don’t need to replicate our work incomes to unlock financial freedom because we currently live in a much more expensive city than we intend to later on in life and we also spend quite significantly below our income level at this point with plenty of room to reduce spending should the need arise.
Within 10 years we should be able to replicate most of our expenses with dividends alone and if we have rental income on top of that that will be gravy on top.
So that’s where we currently stand with our income streams. Are there enough? Are there any low hanging income streams out there that we’re not currently tapping into? Let us know below or over on our Instagram @FindependenceCanada
Thanks for stopping by,
FIC.