Retiring

For some reason I am already thinking about retirement. Not in the sense of stopping work altogether but having sufficient passive income that exceeds my expenses.

Right now I have no passive income. Once we buy a house hopefully this will change because I want to rent out our basement & spare rooms: $700/month. 2016 goal (May- Dec): $4,900

Is there other passive income I can achieve?

• Buy more apartments/homes?
• I cannot imagine buying shares as I don’t have experience in this area but then I don’t have experience in buying apts/homes either. So, I should consider shares as well.
• Retirement accounts- I don’t think I have any.
• Anything else?

Before setting a goal of how much in passive income I want to achieve I definitely need to estimate my annual expenses. Why don’t I start with my monthly recurring expenses:

• Rent $900
• Car loan $500
• Car insurance $180
• Student loan $310
• Groceries $700
• Gas $70

$2,660/ month (need to double check this figure on Feb 1 on mint.com if I am forgetting something)

Basically, to achieve $2,600/month in passive income I need to rent out a couple of rooms:

• Basement $700
• Bedroom with bathroom $600
• Bedroom with bathroom $600
• Bedroom with bathroom $600

Total $2,500

This looks feasible if I have House A that is just for renters. While my family and I live in House B. If I can do this my Financial Independence Ratio becomes 100%. Currently thou it is 0%; therefore, I have a lot of work ahead. Hopefully, much will happen in 2016 to growing that zero.

Btw- FI ratio = passive income / expense.