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.

Budgets are stupid, exhausting and need to die

Budgets are the worst lie being told by the personal finance industry. People like Dave Ramsey are happy to sell you a shitload of useless products to budget more effectively. All you have to do is pay him some money for those products and he promises he will save you even MORE money back!

If you’re brand new to the concept of how money works then sure, budgeting is a great form of training wheels. Once you have a basic understanding of saving, investing and Money 101 then budgeting is a colossal waste of time and resources. How is budgeting still a thing that is being sold to people in the FI/RE community? 

Over the years I have tried every budgeting approach you can think of. I kept trying different approaches and then always giving up or failing. The reason I kept going back was I would fail then end up reading some blogger or article about how budgeting is the number one key to financial success! Turns out, that’s all bullshit.

When you look at ways to simplify your life you’ll want to look put the magnifying glass on every way you spend time each day. After multiple failed attempts at budgeting I was trying again. Putting each item I had bought in a spreadsheet to figure out how much I spent, trying to figure out how to categorize some random purchase and I realized this is a colossal waste of time. Don’t believe me? These are Dave Ramsey’s top 10 signs you need to spend MORE TIME on your budget.

1. You’re constantly worrying about money emergencies.
2. You use the same exact budget each month. 
3. You aren’t tracking purchases.
4. You don’t have a budget line for giving. 
5. You overspend in one category. A lot.
6. You forget annual expenses. 
7. You need space for a new budget line item. 
8. You aren’t budgeting to zero. 
9. You just hit a Baby Step milestone. 
10. Your budget doesn’t line up with your money goals. 
11? You Need to Refresh Your Budget by Season 

How many hours a month am I supposed to dedicate to this bullshit? I have to spend every single dollar before the month begins……why?

Here is what I do now and I have done for the last several years. It takes almost no tracking, no line items, no seasonal budget adjustments and it maximizes our savings.

FireDad’s budget approach:

  1. Automate all your savings and investments
  2. Spend less that what’s left in your account
  3. Don’t waste money on stupid shit

There you go! If you follow the patented FireDad budget not only will you not stress about your zero balanced budget, you won’t think about budgeting at all! Even better there are no envelope systems to buy, no software, no step by step books, this budget can fit on a sticky note you attach to your credit card and can sit in your wallet unaltered for years like that expired condom.

Stop wasting time on worthless tasks that over complicate life.

We have reached Lean FI/RE

I suppose today is the day I became lean FI. There were no sirens, alarms, parties or even mentions. I discovered it looking at my FI/RE spreadsheet and updating some numbers. The part that felt the weirdest was that reaching this during a pandemic was…cheating? Either way as I’ve come to accept that we are Lean FI and will continue to work; this milestone doesn’t really change anything from our plan. While it’s true that we could not work the pay off to keep going 3-5 more years is huge. If we chose to live like the Little house on the prairie then we would be fine, but that’s not the goal.

Our napkins goals for different levels of FI/RE are:

Lean FI/RE # – $60,000/yr mostly passive income
FI/RE # – $110,000/yr mostly passive income
Fat FI/RE # – $150,000/yr mostly passive income with no mortgage on primary residence

Those numbers are not the way I typically see other FI articles, but it’s the method I prefer to use. When I buy a rental property, invest in the market, or invest in a business I can calculate the return based on how Americans calculate their lives every day; in annual salary. For the market I use 4.5% on investments. These numbers are all based on living a homestead lifestyle with significant amounts of land, livestock and crops.

Our current income per month is:

$1,000 – Renting ½ of our duplex
$800 – Rental condo
$5,000 – Retail store
$0 – Events business (COVID, we are shut down)
$9,900 – Finance salary
$16,700    or $200,400/yr

As you can see our income is sizable and we are a one income household,  but I work as much as I can to achieve our FI/RE dream and be able to take care of our children together rather than just the one of us. Our long term FI/RE goal is to buy a homestead on a significant amount of timber. This will allow us to live a lifestyle more connected to the world and the things that are important to us.

Today is also the day I’ve decided to slow down the grind. Sure it may take a little longer to reach that full FIRE number but from this point forward we will always have a place to live and enough income for food to eat. That’s a win by my standards and seems like a good of time as any to slow down my hungering pursuit of making money. It’s one of the reasons that I’m finally starting a blog.

I have no less than 4 folders in my Gdrive with 1-6 articles I’ve written over the last 8 years with the intention of starting a blog. I’ve always been too busy with other things, mostly I didn’t want to focus on anything that I couldn’t guarantee a profit. I didn’t want to write a blog that was focused on money, and until now that didn’t seem like a good use of our resources and time. Now that we have reached the point of lean fire everything is just that much more relaxed and our whole family can focus on more fun projects. For me, that project is finally starting my blog.

Thanks for reading,

FIREdad