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Friday, April 28, 2017

Other Crossover Points

Posted by Tim Stobbs on September 17, 2009

The most famous crossover point has to be the one discussed in the book Your Money or Your Life.  It’s basically the point at which your investments are producing more cash than your spending or the month you truly become financially independent.

Unfortunately that is typically a long way off, so having some other cross over points in the mean time can help with that every problematic motivation to keep going.  So what are some other possible cross over points to help you celebrate along the way?  Here’s a couple that I thought of:

  1. Positive Net Worth – Let’s face it, if you started from a massive point of debt in your life just getting to around even between debt and assets can be a huge feeling of getting somewhere.  I personally don’t recall when I hit this point because I wasn’t tracking it back then, but if you are focused on debt repayment this one can help.
  2. Consumer Debt Free – Paying off all other debts than your mortgage can also be a huge feeling of accomplishment.  I know when I finished paying off my last student loan payment I was extremely happy.  My wife had a similar feeling when we paid hers off and we became consumer debt free as a couple.
  3. More Investments Than Debt – I’m looking forward to having a portfolio that is bigger than my mortgage.  If things go remotely according to plan I should hopefully see this other cross over in about a year from now.  I’m currently about $50,000 short of this other crossover.

In reality any time a line crosses another line (or even an axis) can be another crossover point.  So if you track your progress at all on a graph you can pick all sorts of other crossover points to help keep your motivation going.  What other crossover points have you celebrated getting towards? Or if you have an idea for another one please share with a comment.

Comments

8 Responses to “Other Crossover Points”
  1. Pete says:

    I focus and track passive income. That makes crossover points like food budgets, entertainment budgets, transportation budgets, and rent payments obvious goals for me to get to.

  2. Adam says:

    Pete,

    What are some of your vehicles for passive income?

    Adam

  3. Pete says:

    Stock dividends make up 80% of my passive income. More for motivation, I have two gray areas of passive income: cost avoidance and more active (some say “bored”) income.

    The first is getting my gym membership discount by going to it 12 times per month, biking to work, packing a lunch, etc.

    And for the second: in California we can collect refunds on returning soda/beer cans and bottles. Work doesn’t mind if I pull soda cans out of the recycling containers. I just have to shed my ego as I know production employees are making fun of me, a “high-paying” engineer. I also try to pick up change biking to work (amazing amounts near intersections), together they sum to 20 to 30 USD per month. But, both activities are already along my commuting path.

    Eventually, I envision either an apartment complex or small business, both for passive income and for fun.

  4. Ben says:

    I like the one about investments bigger than debt. I was actually thinking about this one last night!

  5. Pam says:

    Next summer I will be free from my mortgage (divorce, he’s keeping the house) and car loan, so my investments will definitely be bigger than my debt :-) I also expect that I’ll be able to pay down my debt very quickly without the mortgage & car payments. I’m looking forward to next year’s debt-free and positive-net-worth life!

    Of course it’s not very exciting, once my debt is gone I plan to increase my RRSP contributions (I want to retire early).

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