Exactly 3 years left!

The FireFamily has a lofty goal of being fully financially independent by April 2024. Since it is the middle of April 2021 as I write this that means we have 36 months remaining to get our shit together and meet the goals. This seems like a reasonable time to reassess the situation, see if anything has changed, if we are still on track and go from there.

GoalCurrent StatusTo do in next 36 months
Own 5 income producing units2 current, 1 under contract – Ahead of goalPurchase at least 2 more rental properties
$2,000,000 NW by April 2024$1,268,800Increase NW by $19,500 per month – a LOFTY goal
Max 457/401kOn trackContinue – Consider changing this goal to open up after tax cash for real estate?
Max 529 each year ($15,000/yr)2021 – DONE3 years to go
Pay off business loanautomatic payments/currenton track

When I look at my goals above I feel like perhaps the goals are too conservative and we could achieve quite a bit more in the next 36 months.

I expect we will have the rental property goal met much sooner than 2024 so I have adjusted that goal to be completed by June 2022. Once that goal is met then it will be logical to increase this goal to have more cash flow in retirement/travel.

$2mil NW is the only goal on here that feels like I will really have to work to achieve it. Since the timeline is so short at 36 months remaining I am at the mercy of the market to achieve this goal. I think shifting even harder into real estate will help us meet this goal independent of the stock market.

Maxing the pre-tax accounts is pretty easy as long as I keep my full time job. Everything happens automatically so that goal is not nearly as rewarding to achieve.

Maxing the 529 does take intentional action, but is absolutely not a problem. If the contributions were not maxed I might have considered dropping $50k or more into the 529 this year and never worrying about college savings again, but that’s not how the IRS works.

Paying off the business loan is another one of those goals that each month doesn’t feel super rewarding. Since the check is cut automatically from the business account I just have to count down the months until that burden is gone.

1,095 days remaining until I can quit my full time job. FireDad will be 39 and FireMom will be 34 with 100% freedom to take back our days. The FIRE community is one of the most important things I’ve ever studied in my life and I’m grateful every day for the skills I have learned and honed from this community.

NW Update – April 2021

Another month and another Net Worth update. Despite some expensive hobby purchases, bordering on excessive to drop at once, we still increased our Net Worth by $56,200 in the previous 30 days. That is well ahead of track to be at $2 million by April 2024, but this massive bull market can only last so long. I continue with my goals to move as much after tax savings from equities to real estate as possible.

We have a $122,000 real estate purchase with a tenant already in place that will close mid May. This is on track with the goal of purchasing 3 rental properties by June 2022. This property is the first rental property I’ve purchased that I’ll be using traditional commerical financing. I’ll write a detailed report of how that goes in a future post. For now, onto the updates.

Assets
Real EstateValueMonthly Income
IA Rental 3818$130,000$1,050
CO Duplex 1060$580,000$1,000
Real Estate Total$710,000$2,050
Tax Advantaged AccountsValue
457$75,000
401k$62,200
IRA$78,200
ROTH IRA$58,000
Spousal IRA$37,000
529$16,500
Pension$35,800
Tax Advantage Total$362,700
InvestmentsValue
Brokerage Vanguard$68,500Moved all single stocks to Real Estate checking
Brokerage WeBull$12,100
Crypto$50,000
Retail Business$415,000
Total Investments$545,600
Cash/SavingsValue
Checking$61,000BIG spend on Astrophotography this month…..
Real Estate Checking$67,000 (multiple closings soon)
Sold business note$17,000
Total Cash/Savings$145,000
Total Assets$1,763,300
LiabilitesTypeAmount
Mortgage CO DuplexMortgage$399,000
Business buyout loanBusiness$95,500
Total Liabilities$494,500
Total NW April 2021$1,268,800

Increase/Decrease single month
$56,200

April 2021 Goals

  • Set ourselves up to max the 529 each year for the next five years. (already done for 2021)
  • $2,000,000 NW by April 2024 – Current FI goal date.
  • Continue moving after tax investments from apps and into real estate; purchase 3 rentals by June 2022. – Under Contract with 1 property to close in May 2021
  • Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
  • Continue to max 457 and 401k until April 2024 – get pre tax to $500,000

Things to note for the coming months of 2021.

  • $54,000 going to cabin purchase in May 2021. This will be a hobby/luxury expense and will not count towards the $2mil NW goal as it will be a liability property with additional expenses and will not be monitized.
  • Closing on rental property 2625 Mid-May with a mortgage. 20% down at 4.125% for 30 years is just crazy.
  • End of May/Early June FireDad’s pension should double as I become vested.

Setting yourself up for post FI/RE success – Setting Goals

If you are a consumer of Financial Independence content on a regular basis then you can’t ignore that there has been a MASSIVE uptick in the people who have really struggled 2-5 years into their retirement. 

It makes sense though, depending on how you measure the growth of this movement, there is no denying that it has grown to a scale no one imagined. It’s also been around long enough that there is a sizable population that has been early retired for some large chunks of their lives. Nearly all of the earliest FI bloggers have been retired for years and many of them decades. Some of them are starting to admit online that they got slapped in the face that “money doesn’t buy happiness” still applies if you live frugally. People need a purpose.

I follow plenty of the bloggers who have been varying levels of happy and content with their choices, but the takeaway that I heard “was that burning your life energy away to reach that FIRE finish line at all costs is a miserable decision and might even be worse than the “normal” folk who work until 63”. I also took away that nearly everyone who seemed happiest among the FIRE Giants out there is that they all had some form of meaningful pastime that they pursued very purposefully. 

The fear of the post FI regret was all too real for me and in searching for guidance on that issue I found the Die With Zero book I wrote about. Elements of that book are exactly what I needed to guide my decisions with less than 5 years to go until our FIRE date. 

Invest in hobbies and interests I’ve always been interested in. I’ve done a lot of thinking about what would produce the most happiness in our family compared to actual dollar costs. Here is the current list to achieve:

  1. Spend as many clear nights as possible looking at the stars, when covid ends, reach out to astronomy groups, clubs and observatory in walking distance, consider volunteering there. I’ve spent too many years wanting to study astronomy and it’s so silly I never have. That stops; it’s time to live more intentionally.
  2. Invest in my health to ensure I never am the slow leg when taking our family on adventures.
  3. Show our children as much of the US as possible, every national park at the very least, and hopefully for months or years at a time. Anything is on the table to achieve this. 
  4. Increase our knowledge of homesteading, including doubling our growing capacity in the next two seasons.
11pm

Some of these are personal and others are shared goals of our entire family. I expect that when we reach FI/RE and are truly comfortable while being able to achieve these goals that we will be giving our children a better childhood than anyone I’ve ever met experienced. 

In the end, all of these goals point back to the only goal that really matters. To make sure we give our children the best life we possibly can.