Overall, our passive income was great in the first half of 2022. All our investments are hitting their strides. Our FI ratio was also great \u2013 140%. This shows that my early retirement is solid.<\/p>\n\n\n\n
*FI ratio = passive income<\/strong> \/ expense<\/p>\n\n\n\n Passive income is one of the keys to a successful early retirement. Once your passive income surpasses your cost of living, you reached financial independence. Money won\u2019t be an issue anymore and you can do whatever you want. I retired before our passive income got there, but I had an alternate source of income \u2013 blogging. Luckily, early retirement worked out very well for me over the last 10 years<\/a>. Our household income was good so we kept investing. That enabled our net worth to triple over this period and now we are quite comfortable financially. However, we are still working to surpass 100% FI ratio <\/strong>consistently. <\/p>\n\n\n\n Currently, we support our modest lifestyle with the combination of these income streams:<\/p>\n\n\n\n *FI ratio = passive income<\/strong> \/ expense<\/p>\n\n\n\n The FI ratio is a simple way to measure progress toward financial freedom. Personally, I think 100% FI ratio is overkill because almost nobody stops working completely after early retirement. You\u2019ll probably be okay with 80%, but it\u2019s better to err on the side of caution.<\/p>\n\n\n\n In the first half of 2022, our FI ratio was 140%. I\u2019m very happy with it. It might come down a bit because we are taking a big summer vacation to Asia. Stay tuned to see how it goes.<\/p>\n\n\n\n Passive Income Overview and Issues\u2026<\/p>\n\n\n\n I\u2019ll quickly go over each category here so you can get an overall picture.<\/p>\n\n\n\n I started investing in real estate crowdfunding in 2017. My experience has been mostly positive. There were problems, but I still think this is a great way to invest in real estate. At this point in life, I don\u2019t want to be a hands-on landlord anymore. Working with tenants can be super stressful. Repair and maintenance also take a lot of time and effort. I\u2019m ready to be a passive investor.<\/p>\n\n\n\n In 2022, I am mainly investing with CrowdStreet<\/a>. They\u2019re the leading company in real estate crowdfunding and they have many commercial projects to choose from. Real estate crowdfunding is great because you can diversify geographically. I\u2019m not optimistic about the Portland real estate market so I\u2019d rather invest elsewhere. Other areas of the U.S. have been much better.<\/p>\n\n\n\n Here is the spreadsheet of my RE crowdfunding investments. Here are some quick guidelines from my experience.<\/p>\n\n\n\n Currently, we have a small duplex and a 1 bedroom condo in our rental property portfolio. However, we are trying to consolidate our properties down to just the duplex. I travel more now and I can\u2019t be a DIY landlord anymore.<\/p>\n\n\n\n At this point in life, I\u2019d rather invest in other locations through RE crowdfunding<\/a>. Being a landlord is a great way to build wealth, but I need to be a more passive investor in the future.<\/p>\n\n\n\n The duplex is less than 2,000 square feet so it\u2019s really not that big. Eventually, I plan to remodel the unfinished basement so we can have more living space. It\u2019ll take us a while to get it done, though.<\/p>\n\n\n\n *New investors can start with this \u2013 How to Start Investing in Rental Property<\/a>.<\/p>\n\n\n\n Dividend income is my favorite form of passive income. Investors own a small part of these public companies and they work for you. Recently, I changed my focus from dividend to total portfolio growth. Mrs. RB40 plans to keep working for a while so we don\u2019t need the income. It\u2019s better to delay paying taxes until our income is lower. When Mrs. RB40 retires, I\u2019ll refocus on dividend income. If you\u2019re a new investor, here is a helpful post \u2013 How to Start Investing in Dividend Stocks<\/a>.<\/p>\n\n\n\n As for reinvestment, I don\u2019t DRIP. I just accumulate the dividend and invest in a stock or\u00a0real estate crowdfunding<\/a>. This year I hoped to generate $14,000 from our dividend portfolio.<\/p>\n\n\n\n For new investors, I highly recommend Firstrade<\/a><\/strong>. Firstrade is a great discount brokerage that I used for many years. Recently, they lowered their trading fees to $0. That\u2019s great news! Young investors can buy stock without having to worry about the fees. Most discount brokerages also reduced their fees to zero last year. It\u2019s a great time to be an investor. I remember paying $80 per trade when I started investing.<\/p>\n\n\n\n Robinhood<\/a> is also pretty good for a brand new investor. You can start investing with as much as you\u2019d like. Even $100 would be a great start.<\/p>\n\n\n\n New investors should read these posts first.<\/p>\n\n\n\n The money in these retirement accounts isn\u2019t easily accessible at this time (I\u2019m 48), but they still count as passive income. Once we both retire full-time, we\u2019ll build a Roth IRA ladder<\/a> to access our traditional IRAs so we don\u2019t have to pay the 10% early withdrawal penalty.<\/p>\n\n\n\n All in all, 2022 is going quite well. All our sources of passive income are gliding along even with the turmoils in the stock market. In particular, real estate crowdfunding is awesome. It really gave our passive income a lift.<\/p>\n\n\n\n That\u2019s what I love about passive income. You don\u2019t need to worry about how the market is doing if you have enough passive income to fund your lifestyle.<\/p>\n\n\n\n What about you? How is your passive income doing in 2022?<\/strong><\/p>\n\n\n\n Real estate investment should do well over the next few years. We still have a housing shortage in the US and people need to live somewhere.\u00a0Check out CrowdStreet<\/strong><\/a>\u00a0if you want to generate passive income from commercial real estate. It\u2019s way easier than being a landlord.<\/p>\n\n\n\n Joe started Retire by 40<\/strong> in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38. <\/p>\n\n\n\n Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet<\/a>. They have many projects across the USA so check them out! <\/p>\n\n\n\n![\"\"](\"https:\/\/retireby40.org\/wp-content\/uploads\/2022\/07\/H1-passive-income-update.jpg\")
<\/figure>\n\n\n\nPassive Income is Key<\/strong><\/h2>\n\n\n\n
FI Ratio<\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/retireby40.org\/wp-content\/uploads\/2022\/07\/Quarterly-passive-income-1.jpg\")
Real Estate Crowdfunding Income: $20,519<\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/retireby40.org\/wp-content\/uploads\/2022\/07\/2022-RE-crowdfunding.jpg\")
Real estate projects 2022<\/h2>\n\n\n\n
Active<\/strong><\/h3>\n\n\n\n
Completed<\/strong><\/h3>\n\n\n\n
Rental Property Income: $4,313<\/strong><\/h2>\n\n\n\n
Dividend Income: $7,044<\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/retireby40.org\/wp-content\/uploads\/2022\/07\/RB40-dividend-income.jpg\")
Tax-advantaged Income: $12,780<\/strong><\/h2>\n\n\n\n
![\"\"](\"https:\/\/retireby40.org\/wp-content\/uploads\/2022\/07\/June-tax-advantage-acct.jpg\")
H1 2022 Passive Income<\/h2>\n\n\n\n
<\/figure>\n\n\n\nretirebyforty<\/a><\/h4>\n\n\n\n