Mr. MMM and I are always looking for ways to improve ourselves, our future, and our income (passive, that is ;). I mean, after all, we do author a personal finance blog. 2015 has turned out to be a life-altering year around here. We both had a frugal mindset from the start, but after joining forces, getting engaged last summer and then married last fall, we started to focus on building our life together. This meant, not only living a more authentic life by living well below our means, but also seeking avenues to increase income. You see, although we are definitely pro-frugality, we know that there is a frugal threshold that, when crossed, can interfere with quality of life. We’re finding our threshold and improving our lives in the process. That’s not to say we haven’t made HUGE mistakes and HUGE accomplishments. Spoiler Alert…we’re not perfect. But, one step at a time, one day at a time, we will reach our early exit/passive income goals. And so can you!
The Year In Review
What we did this year to reach our personal and financial goals:
-Nearly committed financial suicide
-Mold saved our future!
–We made a plan! (Quite possibly the most important item on the list!)
-Decided to go back to our roots and live a frugal lifestyle
-Realized that our small home was PERFECT!
–Cut the cable! Can I get a woot woot?!
-Got engaged in July
–Got married in October (We don’t waste any time. Carpe diem!)
-Started a personal financial blog! Yippee! Love to all of our readers!
-Started contributing the MAX amount to my 401k!
-Made a plan to contribute the MAX amount to my IRA in 2016!
-Started investing in a brokerage account to reach financial goals
This New Habit Deserves Its Own Paragraph
One more thing that Mr. MMM and I started in 2015 is a working date. During this date we sit down and discuss investment articles we read throughout the week. We also delve deeper into a topic that we want to be more literate about. Last week, I made a presentation (Yes, it’s that official) for Mr. MMM on valuating a rental property. Although he loves the idea of purchasing rental properties and having passive income from rent, he doesn’t know the process like I do. That has started to change. The presentation consisted of real life examples in our town on homes that are currently for sale. It even had links to informational videos. Score! After my presentation was complete, we did a drive by of one of the properties we analyzed to see it in person. He’s super psyched.
He, in turn, sat down with me and showed me two articles he read on companies that are trailblazers in the field of bioengineering. This spurred quite a conversation regarding our current investment elections. Not to worry, we’re not ditching our slow-and-steady-wins-the-race mutual funds to put it all on “black” anytime soon 😉 It’s just fun to discuss.
2016 is starting to take shape. We have a solid plan to invest the maximum allowable dollars into both my 401k and my IRA. In case you’re wondering, we’re not doing this for Mr. MMM because he has his own business, and thus, no option for a 401k. We’re foregoing an IRA for him because he has a sizable pension from his former employer. On top of that, I also have a pension. Two pensions, one big 401k, and rental properties should be all the passive income we need in the future. The plan is for the rental properties to bridge the gap before retirement. And, that doesn’t take into consideration any future monies filtering in from social security. That will be a bonus.
We would like to do a basic basement finish in 2016 to improve our quality of life and give us some additional space for entertaining. We’ve cut this project down from $60k to about $20k. Sure beats buying a big house we don’t need with a mortgage we can barely afford. We’ll take pics along the way!
A stretch goal is to purchase another rental property in 2016. We ran the numbers and decided we need a minimum of 4 properties for me to have the option of quitting my day job. However, we need a total of 6 properties for me to be able to quit my day job and still live well. As long as we can purchase homes that will cash flow immediately, we are willing to do that before focusing on paying down our current rental or primary home mortgages. After having 6 properties under our hypnotic control *evil laugh* we will use the cash flow from each to pay extra on one to reduce its mortgage to dust. We will then use the snowball method to pay off each subsequent property. I think I can, I think I can…
Happy New Year…Almost!
It’s going to be an exciting year! I can’t wait to live a fiscally responsible life for the next 12 months…and beyond! Next year’s end-of-year report should be much more impressive! Go Team!
What have you learned this year? And, what will you do differently in 2016 to hit your financial goals?
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