December 2016 Cheesy Index and 2017 Forecast

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 ExtremeEarlyRetirement.com 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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18 comments

  1. I like the idea of a target net worth value and % progress! Ill set something like that up as well.
    I would expect some sort of hockeystick/compound interest effect at the end but your plan is so lineair, how come?

    1. It’s a bit of a planning too really, an index or something similar. You could also set one up for cash flow as Amber Tree Leaves suggested. For dividend/real estate investors this could be a more suitable tracking tool.

      We might have been a bit more concervative on the yield and we expect income to level off and/or reduce due to working less hours. That is why the tail end is almost linear and does not look like a hockey stick. It’s also a bit of expectations management on our end (makes you feel better if you are faster ;-).

    1. The growth was great! Our pure cashflow is pretty much the sum of the dividend income and real estate income, plus a bit of crowdfunding. For 2017 this should be around €18k before taxes. Exact net income will be a bit difficult to estimate at this time, but not yet enough to cover our basic expenses…

    1. Despite being more than halfway there, it still feels like it is a long way to go….
      Our core expenses are also around €20k, but we would like a travel budget and buffer too. Therefore we are aiming for €25k after taxes.

  2. Great results on the Cheesy Index! Going forward like this you might reduce your target FI date with another year 🙂

    We are tracking are dividend progress thus far, but don’t have any target set on achieving FI. Reaching FI is a goal we only recently started to pursue. We are thinking over some options, and based on that we will set up a FIRE plan somewhere in the coming months.

      1. And yes, you remove the VRH, but you add a lot of additional taxes on dividends.

        And in the Netherlands we can remove 15% dividend taxes from the VRH, so it’s not that bad. I expect for tax reasons it’s better to live in the Netherlands if you are a dividend investor. :p

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