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.

When Will Enough be Enough?

It’s never been a secret to me that I am a workaholic. I always approached it from my unique FI/RE perspective with this in the distance dream of never having to work again. As I have reached higher and higher income levels with more and more investments and companies I’ve worked on becoming successful I am once again faced with a question of “Is this enough?”

Since I was 20 years old working as a supervisor at UPS and doing a part-time job during the day I have always, and I mean always had at least 2 sources of income and one of them (except for a brief unemployment) has always been a full-time salary position. That 15 years of continuous income has led to a very comfortable life that has multiple sources of reliable income at any given time. This has allowed our family to have just me working and FIREMom can stay home full-time. 

Even going down to one income it is getting harder and harder to justify working the full-time job. This is despite the fact that I would rate this job a 9.5/10 in terms of how awesome a job can be. The pay is good, benefits are amazing, it has a pension, my coworkers are great, my direct reports do a reliable job, etc etc. Despite knowing that once May 2021 hits I will be vested in my pension and have it on my calendar as a sort of freedom date I am hesitant to even consider doing something else. 

Since in 5 months our family will be a version of LeanFire in May 2021 every day our family makes the decision for me to keep working is a conscientious decision to give up family moments in exchange for greater comfort, luxuries and experiences. 

With this post I am setting some goals that I can hold myself accountable to. I know myself well enough to think I’ll never reach a NW number that makes me feel 100% comfortable so instead I’ll set these goals to allow my future self the ability to leave full-time employment.

Goal  1  

Tax sheltered retirement > $500,000

Goal 2 

All business debt paid off

Goal 3

Paid off mortgage or after tax investments of equal amount

Goal 4

$250,000 in after tax investments

Goal 5

Reliable $50,000 in S-corp ownership income

Using current account values and savings rates I should hit these goals between 3 and 7 years from now depending on how the market does. That is still longer that I would like some days and honestly I know that even if I end up going 7 years that it is likely I’ll have moved the goal posts again. Although I hope to look back on this post and be reminded that this is enough money to lead a happy, safe and prosperous life. If this is more than enough to meet those needs then why keep going?

Partnerships – Should you?

“The only ship that always sinks is a partnerSHIP” I read that somewhere from some guru and it sure seemed like bullshit at the time. After the last 15 years of starting multiple partnerships I can say that it’s mostly bullshit, but has a tiny amount of truth buried in there.

I’ve started quite a few businesses in my years and a lot of them have been partnerships. It just makes sense for a startup that is cost conscience that rather than hire someone and having to pay them every week you can instead join up with them. The first few years of the growth you have the benefit of an overqualified individual working for less than they are worth in exchange for ownership and future potential. In my time with partnerships I’ve had quite a few different approaches with varying degrees of success and failure.

  • Working for a sole proprietor to learn the craft then joining them – This one was a big mistake as I knew he was crazy. I never lost any money, but the headache every day was annoying and I wanted out in the end. I will never talk to this Qanon conspiracy crazy bastard again in my life and I’m better for it.
  • Joining up with someone that I only knew professionally. This worked out quite well and only ended because they wanted to bring their spouse in and I didn’t want to be a third wheel in a power dynamic where my voice effectively would be worth less. I moved on and am happy about everything that happened for the most part.
  • Starting businesses with your friends – This is the golden ticket to success. I avoided this for years because of the stigma. Everyone in your life, media, books, writers, gurus, bullshitters will tell you that starting a business with your friend is the best way to lose a friend and money. Those people are idiots.

Starting a business with your friends is the best thing you can do if your friends are decent people.

That’s the key to success with going into business with friends. Nothing really matters as long as you respect each other to begin with and have similar values. The mistakes I’ve made in starting businesses with people has always been working with people who didn’t have the same philosophies in life and business. That’ll dick ya down everytime, but if you work with your friends and are all driven towards having fun and making something awesome then you’ll have a blast and make money. 

As we are approaching FI I have gotten so much less tolerant for any work related bullshit. This also relates to any business I own a stake in. If I don’t enjoy it then I am out. With this scaling back I’ve noticed that the only businesses I am excited to work on each day are the ones that I’m doing with my friends. We are doing cool shit and are trying to be on the cutting edge every day if only for the sake of figuring out the best way. We invest aggressively on ideas we think are awesome and every ownership call is a goddamn blast because I’m just hanging out with my buddies bullshitting. It’s just rather than talking about politics we are talking about how to make our business the best it can be.

That’s my dad advice for the week – Get friends that are good people, then go into business together on something you would all have fun doing.