December 2016 Cheesy Index

If you have been reading our posts on the December 2016 savings rate, real estate and dividends, it probably is not a surprise that also the Cheesy Index had a good month/year. With lots of extra income in December, favourable exchange rates and solid passive income streams, the Cheesy Index was propelled to a record high in December last year.

As you can see below, the index hit a solid 57.4%. Considering we started the year with 47.5% (note that we did have a correction in the Cheesy Index to account for a more favourable taxation than anticipated), this means we went up a staggering 9.9%. To put this in perspective, at this rate it would take us only 10 years in total to become FI. That is seriously quick! Albeit not quick….

Cheesy Index History and Forecast

But let’s not get ahead of ourselves here. There were many factors, including exchange rates and market conditions, that could still negatively affect our Cheesy Index in 2017 and therefore our ability to become FI. That being said, our portfolio is primarily driving by passive income and cash-flow. Fluctuations in the Cheesy Index don’t necessarily have an impact on our ability to become FI.

For 2017, we have a new target set based on our re-forecasted progress curve to become FI. As you can see below, the target for year end 2017 is 64.4%, or a 7% increase of the Cheesy Index compared to the close of 2016. We might underestimate the progress, but  you never know if we actually will get this long awaited market correction in 2017 and what other events may occur this year. We are currently scheduled to become FI somewhere in 2023. That is about 1.5 years ahead of the original planning we calculated back in 2014, when we got started on the whole FIRE thing.

Do you also have an index or net worth figure that you target? If so, how well did you do in 2016? What is your forecast new number for 2017? In any case, best of luck!

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November was amazing for the Cheesy Index as it rose to a record 55.5%. So far this year, the Cheesy Index went up 8%. I’m speechless, that is really good progress. But why? For November it was mainly due to Mr. Trump (did not see that one coming), more favourable exchange rates and two pay checks for Mr. CF (due to the 4 week pay periods).

With another good month anticipated for December (“13th month” payment for Mrs. CF, no major expenses anticipated, sign on bonus coming in due to the career switch), we might actually get close to the 58% mark. That would be seriously amazing if that were to happen. More to follow in 2017!

We hope you had as much benefit from Mr. Market as we did! How was your month, did you also increase your net worth by quite a bit? Let us know!

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As noted in September, the Cheesy Index got a bit of an overhaul to accommodate new knowledge about Dutch taxes. Because of this new information, we appeared to have signifcantly underestimated our Cheesy Index. Fortunately, nothing new this month, so we continue the slow but steady increase going forward. The Cheesy Index up to October 2016 is estimated at 53.9%.

We have been looking at the projected income, expenses and other items (including Mr. Market potentially not liking Mr. Trump for the remainder of the year), but we might still be able to hit 55% by the end of the year. But we do need Mr. Market to not do any really crazy stuff. Fingers crossed on that one 😉


Did you also see your overall portfolio increase in October? We sure hope you did!

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As already hinted on a couple of times, the Cheesy Index got a bit of an overhaul in September due to the post of this article and associated comments from you readers. We found that we had not incorporated the tax benefit called the “heffingskorting” correctly into our FI/Cheesy Index calculations. An updated assessment showed that we needed a solid €83K less Net Worth in order to become FI. That is great news, as it turns out that we just crossed the 50% mark! Seriously good news in our ears, as you can well imagine.

We also updated the yearly Cheesy Index as can be seen here. With this increased piece of knowledge about the heffingskorting, we realized what we could shift our FI date forward by about 18 months! Nice, eh? Based on the various assumptions and ROI’s, we should be ready to FI by about mid 2024. To continue with the good news run, we are now only 0.2% from the Cheesy Index target for 2016. There is a good chance that we will beat our forecast this year (assuming Mr. Market does not do anything crazy).

The Cheesy Index up to September 2016 is estimated at 53.1%.


How was your month of September, did you see your porfolio increase? Did you get closer to FI? Let us know!

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The Cheesy Index made a remarkable recovery in August. This was primarily due to the amazing Savings Rate that we were able to obtain, for details see here. But also due to a very happy Mr. Market.

However, we discovered two things this week and both have a major impact on the Cheesy Index. The main reason is as follows, thanks to a post by Financieel Vrij, (sorry in Dutch only) we discovered that we overestimated the amount of taxes that we have to pay during FI. This to the amount of up to €4500 per year, as we were of the impression that the general tax break did not apply to Box 3 income (details to follows in a later post). Apparently, it does and will provide us with a massive tax savings. The result is that our previously calculated target net worth, can be significantly lowered (by as much as €100.000 or more!).

Furthermore, we are in the process of a property swap from our company to us personally. The lawyer (aka the “Notaris”) actually pointed us in the direction of a tax law that also applies to real estate which is held personally and declared in Box 3 . The good thing here is that the value of the property, when used as a rental, is assigned a lower value for taxation. How much lower actually depends on the assessment value (or “WOZ” value as determined by the local municipality) and the yearly rental income. We found that for us it can be lower by as much as 15 to 38%. Why is this a good thing? Because our wealth tax in Box 3 is based on this corrected property value (and not the actual market value), which will result in lower overall taxes.

In short, we have over estimated our taxes now and during FI. We therefore have to redo some calculations, update our new target net worth and associated Cheesy Index. Expect a higher Cheesy Index next month!

The Cheesy Index up to August 2016 is as follows (still a solid, albeit significantly under estimated, 48.1% complete):


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The Cheesy Index took a hit in July, just as expected. The main reason is the costs for the closing of the home purchase. This caused the total cost of the house to become more than the assessed value of the property. No surprise here. And, as shown in the post on the July Saving Rates, we had several expenses in July that affected the Cheesy Index as well (as in, we did not add as much to the portfolio as we normally do in a month).

The Cheesy Index up to July 2016 is as follows (still a solid 47% complete):

201607 CI

A bit more detail on how our assets have developed over time in 2016 can be seen in the two graphs below. The first one provides the distribution of the income, non-income and depreciated assets. The first category includes all real estate, stocks, index funds and loans. The non-income assets include the house (the portion we are living in), cash and some valuable personal possessions (art/jukebox). The depreciating asset is our car. Side note, the asset allocation does not include debt or debt corrections (i.e. the mortgage).

There is clearly an uptick in non-income assets in July, but this can be explained by the fact that we now own a house again, which obviously currently does not generate any cashflow (its an expense so to say). However, if we were to move, we would rent it out and make it into an income asset (it’s a non-activated income asset).

2016-08 Asset Allocation

In the second graph provided below, you can see the more detailed distribution of the above income asset columns above. Again, you see an uptick in real estate, which is because we added 3 rentable units to our portfolio. As a result the percentage of the other groups fell, despite small additions to some of these group (dividend stocks, crown funding and index funds) in July.

2016-08 Income Asset Allocation

How is your FI number doing, and your portfolio? Let us know!

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It is really reassuring to see that the Cheesy Index keeps climbing! A very small correction was applied to the previous 4 months in 2016 as we reassessed our depreciating asset: the car. We found that the value was slightly overestimated by about €500, and corrected for that. Fortunately no major changes in the overall numbers (only May dropped by about 0.1%). We have now arrived at a Cheesy Index of 47.6%, which is a very promising development and is making us confident that we may be able to make the 50% target this year! The only thing that could affect this target are the final assessed values of the new (and existing) properties, which we have just bought a couple of days ago. More to follow next month!

The Cheesy Index up to June 2016 is as follows:

201606 CI


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And the Cheesy Index keeps on going, amazing us to say the least (stock markets have been bouncing a bit, especially in the early part of the year). A small correction was applied to the previous numbers in 2016 as we found a calculation error in the currency conversion. Fortunately no major changes. With the correct numbers we have arrived at a Cheesy Index of 47%. Seems that we may be able to make the 50% target this year.

The Cheesy Index up to May 2016 is as follows:

201605 CI

Finally, we also were able to produce the Cheesy Index since inception in about 2006, when our financial journey started (aka, we started working). This is not to be confused with starting with our FI journey, as we did not see the light until about 2014. For the graph see Cheesy Index.


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April continued to be a good month for the Cheesy Index, as it saw a very respectable increase of 0.6% to a total of 46.1%.

We closed 2015 at a Cheesy Index of 43.6%, we recently decided to aim a bit higher for this year and get to the 50% mark. So another 3.9% to go for the rest of the year. However, we probably won’t make it due to our (now confirmed) real estate transaction. Simple reason is that there will be significant expenses coming up in terms of real estate transaction fees and some (minor) home repairs. Simple math shows that the evaluation value of the property will be less than the sales price + all related fees and expenses for moving. In short, the Cheesy Index will get a hit in July once the deal is completed and we will move to our new property.  But we are not there yet, so we are enjoying the continuous rise in the Cheesy Index for now 🙂

The Cheesy Index up to April 2016 is as follows:

201604 CI

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March was a very good month for the Cheesy Index, as it saw a very respectable increase of 1.3% to a total of 45.5%.

We closed 2015 at a Cheesy Index of 43.6%, we recently decided to aim a bit higher for this year and get to the 50% mark. So another 4.5% to go for the rest of the year. Let’s hope the stockmarket will be nice to us.

The Cheesy Index up to March 2016 is as follows:

201603 CI

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Compared to January, February was a lot better, twice as good actually. The Cheesy Index saw a respectable increase of 0.4% to a total of 44.2%. The current target is roughly a 5.5% per year increase (we want to be done in about 10 years), so about 4.9% to go for the rest of the year.

The Cheesy Index up to February 2016 is as follows:

201602 CI

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After such a rough month as this January, you would expect a dip in the Cheesy Index, at least we did. But to our surprise we came out ahead! For this months we saw an modest increase of 0.2% in our Cheesy Index (we ended 2015 with 43.6%, see here).

The current target is roughly a 5.5% per year increase (we want to be done in about 10 years), so about 5.3% to go!

The Cheesy Index for January 2016 is as follows:

201601 CI

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Ah, finally some time to go through our financial data over the Christmas holidays. We have been able to populate the Cheesy Index for the entire 2015, including the last month of the year.

It was not a great year, as we only marginally increased our Cheesy Index for the year. Our target date for financial independence is 2025, so we need to have the Cheesy Index grow by an average of about 6% per year; this year (2015) it “only” grew by 3.3%.

The main reason for the slow increase and the bumpy ride is the significantly fluctuating exchange rates, moving cost and our (hopefully successful) re-investment strategy.

The Cheesy Index for December 2015 is as follows:

201512 CI

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