The Crossover Point

The eight chapter of Your Money or Your Life deals with the crossover point. You reach the crossover point when your monthly income from investments is higher than your monthly expenses.  If you are putting your money in fixed income investments and your contributions are consistent you will be able to project your monthly investment income into the future and predict when you will reach the crossover point.  If you’re money is mostly in stock investments like mine is and your contributions are sporadic it is more difficult to predict when you will reach the crossover point.

My investment income has almost doubled since I started tracking it last April.  If I could keep up that rate I would reach the crossover point in five years.  It is unlikely I’ll be able to continue at that rate but it does make my goal of ten years seem realistic.  Once I reach the crossover point I will consider myself financially independent.  I will probably continue to make money since there are things such as writing this blog that I like to do and would do even if there were no money involved.  Being financially independent though will give me more freedom in choosing what I do.