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 🙂
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 possible early 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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