Saturday, 28 March 2015

2015 Goals: Weaving "Work Freedom Day" into my Annual Goals

A little while back I wrote an article on "Work Freedom Day" and how it is a powerful method by which to increase your saving rate and decrease your expenses.

Already I have started to insert the progress made along the calendar into my monthly dividend update (see February's post, for instance). But now it is time to think targets and to tuck this idea into my investment goals for the year.

So how to do it? Well, first let's see the lay of the land.

Current Predictions

Currently my expenses rate for the last 6 months sits at about £860. In turn, my current annual dividend income target set in January is £800 for the year.

Using the calculator I knocked together this means my Work Freedom Day should be about 28 January 2015--assuming no great shifts in my expenses and me hitting my dividend target bang on the head.

But that is no target! It is just a simple prediction. So let us make it a bit of a challenge.

2015 Work Freedom Day Target

Let's try it by pushing my target "Work Freedom Day" one week further on than my predicted one. Where does that leave me? 3 February 2015. Sounds good to me.

Now this is quite a challenge. Assuming I hit my dividend target of £800 only I would have to reduce my expenses to an average of around £700 per month (about 22% lower than my current average expenses).

Switching this round, if I keep my average monthly expenses at £860 then I would have to be targeting dividend income of about £975 for the year (a 21% increase on my current target).

Of course, if I can both reduce my expenses a little and increase my dividend income I should be able to hit this. Just a 10% increase in my dividend income from my target (about £880) combined with a 10% decrease in my average expenses (about £780) should see me hit it nicely.

All in all, this looks like a nice target to look to hit. Wish me luck!

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[Image reproduced from Brookfield Farm Honey]


  1. Hello DD

    I have just come across your blog and like your enthusiasm and writing style. Plus you are UK based which is a major bonus.

    You have some great companies in your portfolio many of which I have in mine. It is good to read about others analysis and see how it compares to my own.

    I like the 'Work Freedom' days it is a different look at what we are all aiming for. It feels more tangible as well, knowing that you have got to a certain date in the year and you are effectively free is very powerful.

    Good luck and thanks for your blog.


    1. Thanks, Richard! Much appreciated. Glad you like what I am writing. Yes, there does seem to be a growing band of UK-based bloggers emerging which is really nice!

      I agree, this is one of the things I find most interesting about blogging about your investments. You get to see other people's thought processes in investing in this or that company. It is often far more relevant than what the professional investors are looking into.

      Which companies in our respective portfolios stand out as different between yours and mine? Anything in particular?

      I agree entirely with what you say about WFD. It is far more tangible and real than many other ways of tracking progress.

      When I first read the idea on Dividend Life's blog I was very excited indeed. But, as I said in my original post thought it would benefit from a little tweak for my particular purposes and for tracking the crossover point!

      Glad you're enjoying reading and look forward to seeing you around the blog more in the future! Good luck to you to!

  2. DD,

    I absolutely love the idea of the Work Freedom Day. The first time I saw it on Dividend Life's blog I immediately calculated my own WFD. Currently it sits at about January, 20.

    That's not too bad considering I've only been investing for such a short time, but I hope to bump that date back a couple of weeks this year by saving and investing as much as possible.

    Best of luck!

    1. Thanks, NMW! Yes, I first saw it on DLs blog. It was an excellent idea that I just tweaked a little for my purposes!

      You're already at 20 January? Very nice indeed! You must have had a very strong first quarter! Are you working back from December (like DL) or forward from January (like me)? I assume the latter or else you're pretty much at FI!

      I already know my Q1 full dividend breakdown but I have not worked out the WFD yet. So, you will have to wait until early next month for the published results with me! March is a much stronger month than Jan/Feb so I am optimistic.

      Yes, your progress is extremely impressive over such a short time. I have only been investing seriously since Jan 2014 (though I have been reading around the subject for years). Did you start in August 2014?

      Keep up the great work and thanks for visiting!

  3. Hi DD,

    It's great to see how you've worked this into your goals - I wish you every success on reaching and then pushing your Work Freedom Day back!

    And as you've already noted, moving the Day can be done by both reducing expenses or increasing income - I find it helps me in preventing expense creep in my budget by keeping that aspect fresh in my mind.

    Best wishes,

  4. Thanks a lot, DL. I am looking forward to seeing the days tumble (I hope!). I think it will be a particularly important target for me in the future. Now you can see why your idea so excited me!

    Expenses is one area I want to focus on. It has, of course, the double effect of decreasing the amount you need and increasing the amount you have to invest. Quite a way to turbocharge your income stream!

    I'll keep you posted on my progress!