I would suggest keeping it simple. Maybe have 1 account with everything going in and out of it and categorize it using an online banking feature that any big bank will have. At the end of the month/week run the report and you can save time and will be more likely to continue the process b/c of the simplicity.
I divide my income into 2 categories.
1 – hours for dollars
2 – passive
I focus only on a single ratio, the Wealth Ratio. The “Wealth Ratio†is the amount of passive income divided by income needed to live (including sunny day and rainy day).
Passive income / (living exp, sunny day, rainy day) = wealth ratio
If I have a Wealth Ratio of 1 then I have enough passive income to be a wash without trading Hours for Dollars. I would focus on getting that Ratio up to 1.5 then 2 and so on. I am not concerned or do I strive to increase or decrease the percentage of an expense or savings relative to my personal income. I strive to increase my passive income relative to my Quality of Life Expenses.
When I was starting out with accumulating passive income I started with obsessively tracking my ability to convert earned income into Passive income.The book GOOD TO GREAT talks about measuring with simple and few ratios that really tell the story. If one month my Rainy Day income goes up by 2 as a percentage of income how is that really affecting my END goal? It might take about 3 hours of work time off a retirement plan? If you measure in Inches you will get Feet, If you measure in Miles you might get around the world.
I divide my income into 2 categories.
1 – hours for dollars
2 – passive
I focus only on a single ratio, the Wealth Ratio. The “Wealth Ratio†is the amount of passive income divided by income needed to live (including sunny day and rainy day).
Passive income / (living exp, sunny day, rainy day) = wealth ratio
If I have a Wealth Ratio of 1 then I have enough passive income to be a wash without trading Hours for Dollars. I would focus on getting that Ratio up to 1.5 then 2 and so on. I am not concerned or do I strive to increase or decrease the percentage of an expense or savings relative to my personal income. I strive to increase my passive income relative to my Quality of Life Expenses.
When I was starting out with accumulating passive income I started with obsessively tracking my ability to convert earned income into Passive income.The book GOOD TO GREAT talks about measuring with simple and few ratios that really tell the story. If one month my Rainy Day income goes up by 2 as a percentage of income how is that really affecting my END goal? It might take about 3 hours of work time off a retirement plan? If you measure in Inches you will get Feet, If you measure in Miles you might get around the world.