Personal Prediction of the Timeline I Need to Reach My Barista Goal

How time flies!  In a blink of an eye, we are already in March 2023, the last month of the first quarter.  With the start of the new month, I would like to estimate and extrapolate how long it takes for me to compound to reach my FIRE number, based on the annual dividends I received in 2022, and the projected dividends I can get in future (without any black swan event).  Kindly note that this is just my personal number and my personal extrapolation and do not work for everyone.  Without further ado, let's dive right in!

Since 2018, I have set a Barista FIRE goal for myself.  I aimed to achieve a passive income stream of SGD 2K per month, which translate to SGD 24K per year.  Longer term, I would love to achieve a passive income stream of SGD 3K per month, translating to SGD 36K per year, for FIRE.  

Different individuals will have different lifestyle and different needs, and hence a different number for FIRE.  For me, the numbers stated above, are mine, as of January 2023.  This number may or may not change in future, depending on circumstances at that point in time (especially depending on the effects of inflation), but for now, this is it.

Since I have a goal in mind, I would like to make a projection for myself on when I can achieve all those numbers, from where I am now.

Gratefully, after compounding since 2018, by the end of 2022, my total annual dividends collected is around SGD 18.5K.  Moving forward, I think I will not be able to inject as much capital into my SGX Dividend Portfolio.  Therefore, I believe the compounding effects may slow.  As such, I am hoping that the dividends can grow between 8% to 18% annually with minimal capital injection and reinvesting dividends back into the portfolio.  Projections are as follows:

If dividends compound at 8% annually:

Including 2023, it will take slightly more than 3 years to obtain my Barista FIRE goal, while it takes slightly less than 9 years for me to reach my ultimate FIRE number.  The time required for me to achieve the final goal when the dividends only compound at 8% yearly seems too long, as I hope to attain FIRE by 45, which is only 6 years away.  I think I need to push myself a little bit more to expedite the process.

If dividends compound at 13% annually:

Including 2023, it will now take slightly more than 2 years to obtain my Barista FIRE goal, while it takes about 6 years for me to reach my ultimate FIRE number.  The time required for me to achieve the final goal when the dividends compound at 13% yearly seems reasonable, and within my personal expected timeline.  

If dividends compound at 18% annually:

Including 2023, it will now take less than 2 years to obtain my Barista FIRE goal, while it takes slightly more than 4 years for me to reach my ultimate FIRE number.  The duration required for me to achieve the final goal when the dividends compound at 18% yearly is exciting, as it will mean that I can achieve my FIRE goal before 45!    

I will try my best to achieve it within the timeline I set for myself.  Got to work hard amidst all my planned trips this year!  I believe if the companies and REITs I owned in my portfolio continue to do well, they can help to grow the dividends for me.  If inflation remains persistently high, then I will have to work harder, save more, and grow the dividends on my part by capital injection and getting more shares.

Let this post be a record for myself, so that by the end of 2023, I can look back at this post to see if my dividends collected for the year is able to surpass the goal set, and hopefully to shorten the time horizon to hit my targets.  For now, Barista Fire, here I come...!