Last month I decided that I had you create a plan that would allow me to leave my 9 to 5, before I turn 65, without the worries of money. So what has brought me to this decision? What is my “Why”? No, I’m not 65 and ready for retirement. Well, the answer is a mixed bag of reasons so let us dive into them.
Time to Reflect
One reason I’ve reached this point is due to COVID and the lockdowns. We’ve all been stuck in our homes with nowhere to go and for me that included work. During this time I had more time to not only wash laundry and do chores in between meetings but I got time to reflect on my life as a whole.
I thought working remotely wouldn’t be a bad thing, I actually thought I’d love it, but it turns out that the social interactions with others in the workplace are a large part of what makes me want to go to work. I also realized that I’m not as passionate about what I’m currently focused on at work in my quasi-leadership role in IT. And then there were some big organizational changes that simply made me wonder, why am I still here when so many others have left or were let go?
I didn’t feel like I was adding value anymore and I wasn’t passionate about what I was doing so I started the count-down timer for when I was going to leave.
Another point of reflection came from the loss of my mother-in-law, my mom recently surviving cancer, as well as a close friend battling cancer. This all sparked a feeling of life is too short to waste. I needed the freedom to do more with my time and pursue things that got me excited.
So What Next?
Making a decision to leave a job I’ve worked at for over half my life is kinda hard. I’d built up a level of comfort that made me feel secure but it also made me complacent. And even though I’ve written down the words and said them aloud something in me was still trying to second-guess the decision. But there’s no turning back so I got to planning and researching the things that need to be done before retiring early.
I double and triple-checked my expenses and calculated my FI number. And based on my calculations I was close (relatively) but not there yet. I took my annual expenses and multiplied them by 25 which equaled $820,740 ($32,829.60*25). Good thing my expenses are low. Some of my friends might call me cheap, but I’ve always said that I’m just conservative with how i spend my money.
A few years before making this decision I started my exit strategy. I started saving ~70% of my take home and I decided to begin investing in real estate. I even got licensed so if needed I could be a real estate professional full or part-time. As for the real estate investments I focused on buy and hold for the long term. I started off doing long-term rentals but soon came across short-term rentals and saw that I could make way more cash so I decided to try it. One of the pros that came with COVID was remote work. This allowed me to get my STRs going and get 9 to 5 work done because I’d have Internet at each property.
So far STRs are bringing in great cash flow, at least four times as much compared to long-term. I can even pull out some cash from equity and still cover my costs. These properties are in Saint Petersburg, Florida which is a great place to vacation and get away from the cold in the winter.
Time in the market matters
Even though I was on the hammer wheel of the average person with the mentality of working till 65 I was at least saving, investing, and not living above my means. The only thing is that I was not committed to saving and investing every penny that I could. Being a tech guy I bought the latest phones and tablets. Tech was my only bad spending habit but technology is not cheap. And I had to have the latest and greatest. Good thing I came to my senses but this is years and thousands of dollars spent after the fact.
I got serious about saving and investing
To give you an example of my tortoise to hare journey check out my net worth trend report from Mint.com. In 2018 I put things into high gear.
Maybe this is SlowFI to RapidFI? There are way too many FIs 😂. to research. Again, taking the information from Mint.com you can see how things break down at a high level.
As you can see from the data and the graph my debt is increasing. That is because I started buying real estate for cash flow. There is the side benefit of equity that came with it, especially in this market, but that was not why I bought it. And even though debt-is-debt, the credit card debt shown above is business debt, not in my name, that the business will pay off soon.
I think I’ll end it here and we’ll see how the number grows and declines over time. I’m extremely excited to reach FI, leave the 9 to 5 and focus on doing my own thing.