As we all know, the only constant in life is CHANGE. With that being said, the FIRE path is something Mr. MMM and I have been traversing the past few months. We feel we are finally firmly planted in the mindset and have started blazing our own path. We sat down this past weekend with our trusty spreadsheet and open minds and debated our current course. As many of you know, I get really excited about real estate, for various reasons. Hence, we must fit rental properties into our diversified, passive income portfolio! With this in mind, we have tweaked our plan to make it one step closer to foolproof, aside from a full-blown, four-alarm zombie apocalypse of course 🙂
Coffee Shop
I Think Best With Caffeine!
On Sunday, we broke one of our no-spend rules and went out to have coffee at a local, pretentious shop to discuss our financial future. Since money is a touchy subject, even when you are on the same page, I think it’s best to get out of the house to discuss it as objectively as possible. With laptop in hand, we headed into “the city”. Lancaster city, to be exact.
Our plan for 2016 has shaped up to be this:
-Max out 401k contributions for my job (Mr. MMM is self-employed so his income is feast or famine…AKA no 401k)
-Use tax return and bonus to max out IRA contributions for 2015 & 2016
-First savings of the year go into making up difference for IRA contributions
-Next savings go into a 3-fund (Boglehead) portfolio, earmarked for paying off our current rental property and acquiring additional properties
-All income earned by Mr. MMM will go directly to pay off current mortgages (rental property and primary home)
I Can Explain
I have no idea how, but I managed to scoop up a job with pretty sweet benefits, including a pension! I’ve also been fortunate enough to be riding this gravy train since I graduated from college…a few years ago 😉 Therefore, in the name of diversification, we are foregoing IRA savings for Mr. MMM even though it’s a tax-advantaged account. Over the next 10 years or less, we want to amass enough passive cash in rental income to bridge our gap between possibleearly retirement and traditional retirement.
One More Thing…
There is One. More. Thing. we still need to nail down in our plan. We need to nail down exactly WHAT it is we WANT to do with the freedom we are chasing. We both want a vacation home near a ski town (Vermont or Colorado) that we can use as a vacation rental when we’re not there. We decided this on our honeymoon 🙂 But aside from that, we will still have a child, or children, in school over the next two decades which makes us less mobile. As I said before, I think I would be satisfied staying at my current job and having the OPTION of quitting. Being able to use my entire income from my job for investments and helping family and friends would be a wonderful feeling. I love options. We’ll keep you posted!
What do you plan on doing or would you do with an early retirement?
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10 Comments
We’ve pondered this very question in the months since we set out to become financially independent. Do we want to retire early? Or do we want the option to retire early? Probably. We want to go beyond traveling to living–living in other cultures for long periods of time, not merely for the week we’re limited to now. In the meantime, we’re learning as much as we can about investing. Thanks for sharing your plan!
Yeah…We don’t have our sexy plan yet, like retiring to the woods (Frugalwoods) or traveling the world in a minivan with a mattress (The Resume Gap), but we’re getting there. We do like traveling but not enough to make it our lifestyle. We also have Mini and would like to keep her in the same school through graduation. Figuring out our actual plan when we’re financially independent is next on our To Do list. We’ll keep you posted 🙂
Great plan. We’re following something similar, though we’re not cost cutting as hard as you. We want the option (but not necessarily will) to leave the workforce.
I suppose there is rarely an exact magic moment when you achieve FI, but I suppose we’re there now. In hindsight I wish I had prepared for it better before it arrived, so kudos to you for thinking about what you’ll do when you achieve early retirement status. It’s easy to get so caught up in the process of FI that you don’t really prepare for what happens when you get there!
I’m currently winding down my freelance CPA practice and starting to formally offer personal financial coaching services (I had done it previously more as a volunteer ministry vs. an “encore” career activity). It’s nice to pass along the knowledge (and the mistakes!) that I’ve gained as we built our wealth. Hopefully others will find it helpful.
Great post and keep planning! The future will be here before you know it.
Thank you! And, congratulations to you! I can’t wait to be in your financial shoes. But, I’m trying to enjoy the journey. Isn’t getting there supposed to be half the fun? 😉
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few months. We feel we are finally firmly planted in the mindset and have started blazing our own path. We sat down this past weekend with our trusty spreadsheet and open minds and debated our current course. As many of you know, I get really excited about real estate, for various reasons. Hence, we must fit rental properties into our diversified, passive income portfolio! With this in mind, we have tweaked our plan to make it one step closer to foolproof, aside from a full-blown, four-alarm zombie apocalypse of course 🙂
10 Comments
We’ve pondered this very question in the months since we set out to become financially independent. Do we want to retire early? Or do we want the option to retire early? Probably. We want to go beyond traveling to living–living in other cultures for long periods of time, not merely for the week we’re limited to now. In the meantime, we’re learning as much as we can about investing. Thanks for sharing your plan!
Yeah…We don’t have our sexy plan yet, like retiring to the woods (Frugalwoods) or traveling the world in a minivan with a mattress (The Resume Gap), but we’re getting there. We do like traveling but not enough to make it our lifestyle. We also have Mini and would like to keep her in the same school through graduation. Figuring out our actual plan when we’re financially independent is next on our To Do list. We’ll keep you posted 🙂
Great plan. We’re following something similar, though we’re not cost cutting as hard as you. We want the option (but not necessarily will) to leave the workforce.
It will feel fantastic to have the option!
I suppose there is rarely an exact magic moment when you achieve FI, but I suppose we’re there now. In hindsight I wish I had prepared for it better before it arrived, so kudos to you for thinking about what you’ll do when you achieve early retirement status. It’s easy to get so caught up in the process of FI that you don’t really prepare for what happens when you get there!
I’m currently winding down my freelance CPA practice and starting to formally offer personal financial coaching services (I had done it previously more as a volunteer ministry vs. an “encore” career activity). It’s nice to pass along the knowledge (and the mistakes!) that I’ve gained as we built our wealth. Hopefully others will find it helpful.
Great post and keep planning! The future will be here before you know it.
John
Thank you! And, congratulations to you! I can’t wait to be in your financial shoes. But, I’m trying to enjoy the journey. Isn’t getting there supposed to be half the fun? 😉