Our Passive Income Journey on the Path to FIRE

Passive income is one of the most effective ways to achieve financial independence. In simple terms, passive income is money you earn on a recurring basis with limited ongoing effort once the system is set up. For us, passive income is not about shortcuts or “getting rich fast,” but about building reliable cash flow that supports our long-term goal: financial freedom.

This approach is deeply connected to the FIRE movement (Financial Independence, Retire Early), which focuses on intentionally saving and investing so your assets—not your time—cover your living expenses. If you’re new to the concept, we explain it in more detail in What Is the FIRE Movement?.

In this article, we’ll show which assets currently generate monthly income for us, how much they contribute, and why passive income plays such a central role in our FIRE strategy.

Passive Income vs. Asset Appreciation

One common misconception in personal finance is that passive income and investing are the same thing. They’re related—but not identical.

• Passive income pays you cash regularly (rent, dividends, interest, staking rewards).

• Asset appreciation increases your net worth over time (stocks rising in value, property prices increasing).

A stock that goes up 10% has appreciated, but unless it pays dividends or you sell it, it doesn’t help with monthly expenses. Many FIRE strategies rely on appreciation combined with withdrawals, often modeled using the 4% rule. We break down the strengths and risks of that approach in The 4% Rule – Explained (Pros and Cons).

Our preference leans more toward income-producing assets, especially as we move closer to financial independence.

Why Passive Income Matters for FIRE (and Barista FIRE)

Passive income creates flexibility. It reduces dependence on a single employer and lowers the amount of active work required to sustain your lifestyle.

This is particularly relevant for people aiming for Barista FIRE—a version of FIRE where investment income covers part of your expenses, while flexible or part-time work covers the rest. We explain this concept in What Is Barista FIRE? and why we believe it’s realistic and sustainable for many households in Why We Think Barista FIRE Is the Best Fit.

You don’t need full financial independence on day one. Even modest passive income can significantly reduce stress and increase optionality.

Our 6 Passive Income Streams

We currently have six different passive income streams. They vary in size, risk, and scalability, but together they form a diversified foundation.

1. Rental Income (Our Largest Income Source)

Our biggest passive income source is real estate rental income (after expenses).

• ~€470 per month (up from €300 since beginning of 2025)

• ~58% of our total passive income

• Expected growth of ~50% this year due to a new apartment (indeed realised at end of 2025)

We currently own rental properties in Hungary (Budapest and Miskolc). This is a conscious choice based on market conditions. The Dutch rental market has become increasingly unattractive for private investors, while Central Europe still offers better risk-reward dynamics.

Rental income aligns well with FIRE because it:

• Generates predictable cash flow

• Often keeps up with inflation

• Can be scaled strategically

Real estate does require active management, but for us, the cash-flow stability outweighs the effort.

2. Stock Dividends (Still Building)

Dividends currently make up around 3-4% of our passive income.

Our long-term plan is to build a diversified dividend portfolio using stocks and ETFs. At the moment, however, we prioritize repaying the mortgage on our apartment, a decision influenced by our views on Debt vs Savings for Investing: Which to Choose?.

Dividend investing plays a key role in FIRE because it is:

• Highly passive

• Scalable

• Easy to diversify globally

As our debt decreases, this income stream will become more prominent.

3. Crypto Staking, Earn & Cashback

Crypto is not the foundation of our FIRE plan—it’s our high-risk, limited “play money” allocation.

What has worked for us:

• Staking and earn programs

• Crypto card cashback (≈ €3,000 over several years)

What hasn’t worked:

• Short-term trading

We treat crypto income as optional upside, not something we rely on for financial security.

4. Interest Income (High-Yield Savings)

We earn interest mainly through high-yield savings accounts via Raisin, which acts as a broker between savers and European banks. All deposits are protected up to €100,000 per bank.

Interest income won’t make you financially independent, but it plays an important supporting role:

• Capital preservation

• Liquidity

• Risk reduction / Safety net

Especially during uncertain market conditions, this stability matters.

5. P2P Loans

Peer-to-Peer lending used to be a much larger part of our portfolio.

We still use Robocash, earning around 10% annually (it is slowly decreasing to 9% now), but we’ve reduced our exposure to free up capital for real estate. P2P lending can be a good entry point for new investors, but diversification and platform risk should never be ignored.

Currently we transfer every month a little bit back to the platform to reinvest.

See here our review of different platforms based on our own experience.

6. P2B & Sustainable Crowdfunding

Peer-to-Business investing is currently a very small allocation for us.

We mainly invest in sustainable crowdfunding projects such as:

• Wind turbine parks -> Read here in Dutch our experience with WindShareFund (Scam or Not?)

• Green gas initiatives

Returns are modest, and we don’t recommend this early in your FIRE journey. For us, this is more about impact and values than optimization.

How This Fits Into Our FIRE Strategy

Our goal is not extreme early retirement, but freedom and flexibility. Passive income allows us to reduce reliance on active work and gradually transition toward Barista FIRE.

We share more details, numbers, and decision-making in Our Own Barista FIRE Journey, where we show how these income streams fit into our broader plan.

The exact amount of passive income you need depends heavily on location and lifestyle. If you’re based in Europe, especially the Netherlands, we break this down in How Much Do You Need to Save for FIRE (in the Netherlands).

Final Thoughts

Passive income is not about perfection or speed—it’s about progress and resilience. You don’t need dozens of income streams or exotic investments. One or two well-chosen assets, built patiently, can already make a meaningful difference.

Our journey is still ongoing, but every euro of passive income brings us closer to financial independence—and more control over how we spend our time.