NW Update – May 2021

Another month and another Net Worth update! May 2021 was the month of real estate. We had 3 closings this month. After spending months trying to find any deals in real estate and falling flat I finally found the key to success in our current market. Purchase properties from investors that come with leases. Retail buyers don’t even consider these properties that they wouldn’t be able to take possession of for up to 2 years based on a lease.

Our net worth got a large injection by becoming vested in my public employee pension and then 50% of the bump came from investment returns. Who knows when this insane bull market will end, but with 4 rental properties I feel sufficiently more prepared for any downturn than I ever have before.

I’m still toying with the idea of including our vacation cabin in our net worth calculations. It’s a small enough % of our total NW that I really don’t think it matters either way.

Assets
Real Estate	Value	Monthly Income
IA Rental 3818	$130,000	$1,050
CO Duplex 1060	$580,000	$1,000
IA Rental 55th	$125,000	$1,200
IA Rental 15th	$155,000	$1,200
Cabin	$55,000	N/A
Real Estate Total	$990,000	$4,450
Tax Advantaged Accounts	Value
457	$77,800
401k	$64,300
IRA	$77,200
ROTH IRA	$58,200
Spousal IRA	$37,000
529	$16,500
Pension	$55,700	$20k change from becoming vested!
Tax Advantage Total	$386,700	$500,000 goal
Investments	Value
Brokerage Vanguard	$74,000
Brokerage WeBull	$12,100
Crypto	$46,000
Retail Business	$415,000
Total Investments	$547,100
Cash/Savings	Value
Checking	$12,000
Real Estate Checking	$7,000
Sold business note	$17,000
Total Cash/Savings	$36,000	Spent over $100,000 on real estate this month!
Total Assets	$2,014,800
Liabilites	Type	Amount
Mortgage CO Duplex	Mortgage	$399,000
Business buyout loan	Business	$93,000
Mortgage IA 55th	Mortgage	$95,000
Mortgage IA 15th	Mortgage	$95,000
Total Liabilities		$682,000
Total NW May 2021		$1,332,800

Increase/Decrease single month
$64,000

May 2021 Goals and reflections

• Set ourselves up to max the 529 each year for the next three years. (already done for 2021)
• $2,000,000 NW by April 2024 – May21 update- Consider moving goal posts to quit F/T job. Other avenues to get health insurance to cut 1-2 years off. Rental property income is strong and won’t make the NW goal as important.
• Closed on 2 rental properties in May 2021. I am not actively shopping for investment properties. The market is not great for remote buyers.
• Invest $50,000 additional into CO Duplex in improvements to create a better income property by April 2023.
• Invest $25,000 in cabin by April 2023.
• Continue to max 457 and 401k until April 2023 – get pre tax to $500,000

Things to note for the coming months of 2021.

• I’ve already achieved a June 2022 goal related to rental properties. I’m going to slow down and think through next steps. With the current real estate market and us having $1mil in real estate; building up cash to purchase aggressively in the event of a turn down might be a better play. If the market continues to rise then we are still doing well with a large real estate portfolio and if the market takes a dump then we have the cash to buy up entire city blocks.
• Look into a Solo 401k or SEP IRA for my business income. I’m finding the rules extremely complicated with our situation – Single earner, many sources of income. The IRS has lots of avenues to tax shelter massive amounts of money and now is the time to put energy into that.

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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.

Goal	Current Status	To do in next 36 months
Own 5 income producing units	2 current, 1 under contract – Ahead of goal	Purchase at least 2 more rental properties
$2,000,000 NW by April 2024	$1,268,800	Increase NW by $19,500 per month – a LOFTY goal
Max 457/401k	On track	Continue – Consider changing this goal to open up after tax cash for real estate?
Max 529 each year ($15,000/yr)	2021 – DONE	3 years to go
Pay off business loan	automatic payments/current	on 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 Estate	Value	Monthly Income
IA Rental 3818	$130,000	$1,050
CO Duplex 1060	$580,000	$1,000
Real Estate Total	$710,000	$2,050
Tax Advantaged Accounts	Value
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
Investments	Value
Brokerage Vanguard	$68,500	Moved all single stocks to Real Estate checking
Brokerage WeBull	$12,100
Crypto	$50,000
Retail Business	$415,000
Total Investments	$545,600
Cash/Savings	Value
Checking	$61,000	BIG 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
Liabilites	Type	Amount
Mortgage CO Duplex	Mortgage	$399,000
Business buyout loan	Business	$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.

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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.

So You Wanna Buy A Sports Car?

Some of us are just born with a love of cars. It runs deep in our blood. I believe that electric is the future, but I  also believe that a naturally aspirated engine with perfectly engineered steering can create religious experiences. So whenI hit the age, income and NW to comfortably start thinking about a purchase this ridiculous I knew I had to do it right. I knew my wants list and for today’s blog post we are only talking about wants. Anyone that says a sports car is a need should really check themselves at the door. 

My wants list was pretty small but pretty specific: it had to be a manual transmission, regular maintenance had to be DIYable, I wanted it to be daily drivable and trackable, and I wanted it to be a Porsche. 

After a ton of research I settled on a 1999-2004 911 4S also known as the 996 generation. If you’re not into cars the story of the 996 is fascinating. If you are into cars there is a good chance you’ve heard about it by now as the secret is starting to get out. 

The Porsche 911 is the flagship sports car. Every generation over the last 50+ years has been beautiful, powerful, fast, fun and track ready from the factory. For this, and many more reasons the Porsche 911 has held its value surprisingly well and in lots of cases has become worth more than the original MSRP for good models built before 1999. You see in 1999 Porsche made a few changes to the 911. First it went water cooled from air-cooled which was pretty much necessary to keep up with the performance of competitors. They also implemented some changes that  most automakers do of sharing parts across models. The cardinal sin of the 996 was sharing its headlights from the Boxster and going away from the classic 911 round headlights. 

There are a few other gripes about the 996, but the truth is that at its heart and core the 996 is a 911. It drives just as good as it’s more expensive brothers and sisters and it does it for less than half the cost of nearly every other generation. Here is mine – a 2004 911 Carerra 4S.

I bought this car for less than the price of a new Camry including delivery and some minor repairs. I’ve had the car about a year and in that time it has actually appreciated about 15% from what I paid. That’s the funny thing about sports cars – the markets fluctuate and if you spend the time researching you can clearly identify vehicles that are undervalued. I’m not advocating for trying to make a profit with your sports car addiction I’m simply saying that you should make the purchase smart and with some forethought. Other than maintenance and repairs the cost of owning my very own piece of vehicle art will cost almost nothing. Meanwhile a 2020 Carerra 4S is $127,900 before options. Ask yourself if you want the car for the status or to maximize your enjoyment for every dollar spent? 

I will always take the approach of maximizing my dollar spent. I drive a car that I had a poster of in my locker in high school and my total cost of ownership so far is less than a fully loaded Kia. I’m into this car for under $30,000 and it’s a pristine example. You can easily find amazing, exciting cool cars for so cheap if you just know the markets. I actually found a friend of mine an Aston Martin Rapide for $52,000 a few weeks ago. It was a 2012 with 40,000 miles.The original MSRP was well over $240,000. He had always wanted one, is pretty close to a Fat FI/RE number and was blown away when I found his dream car for less than a new F-150. 

Do your research, learn the market and buy used but reliable. It’s a great experience to learn the known issues of your dream car and how to wrench on them yourself. It’s a far more rewarding experience to have something you need to take care of rather than walking into a dealership and signing up for a giant loan. 

In 2019 85% of new cars were financed and 56% of used cars were financed. Exotics are financed at a rate of 89%. Imagine having to make a monthly payment on something you can’t even use every day, doesn’t that sound miserable? I don’t think I could enjoy my beautiful sports car knowing it was chained down with debt.

The principal of buying used, learning the market, being an educated buyer and paying cash are principals that apply to nearly every major purchase. Whether it’s a house, car, boat, vacation home, plane, yacht, villa, or island the same rules apply. If you do what everyone else does you’ll learn nothing, gain nothing and be stuck with payments the rest of your life. Who wants that?

I remember my grandpa working on old mustangs and ancient fords he pieced together from junk yards. He was a child of the depression who didn’t go to high school. I’m still working on being as frugal as he was, but those skills made their way down the bloodline of finding the right deal and doing as much of the work yourself as you can.

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Baby clothes – on the cheap

This week my lovely wife is 22 weeks pregnant. There have been a lot of projects and things going on in the house and we are slowly converting rooms into baby appropriate spaces. Along with this has been a list of items we need to get before FIREbaby pops out. These are purchases that the baby industrial complex will hound you and prey on the unsuspecting adult in unforeseen ways.

The bombardment of things you “need” to buy to keep your baby safe is overwhelming and can be about 5 posts. Today we are just going to talk about the approach we are taking to getting clothing from 0-12 months old.

We live pretty remote from normal civilization. It’s about an hour drive from a city that has places to shop. With that in mind I had some items we needed to take to the thrift store and I also knew I could combine those trips into a baby clothes trip.

I ended up going to three different thrift stores and buying pieces that looked in like new or new condition (some still had the tags). We ended up spending $86.50 across two different stores (one store didn’t have anything worthwhile) We are not finding out the gender of our baby so I was somewhat limited. While I strongly hold the belief that a baby doesn’t care what it wears I still wouldn’t want to put my potential son in a Broncos cheerleader outfit or my potential daughter in a “I’m daddy’s little man” shirt. I stuck to the tried and true, cute animal prints.

For my $86.50 I got:

NB pants – 1
NB onesie – 9
0-3mo onesie – 10
baby sock – 1
3mo onesie – 6
3-6mo onesie – 12
3-6mo pants – 4
3-6mo top – 2
6-12mo onesie – 3
12mo onesie – 1
12mo top – 1
A total of 50 new or like new items of baby clothing for an average cost of $1.73.

50 baby clothing items – $1.73 average cost

Nothing was damaged, nothing was worse than a onesie you see at Target, GAP or any other store. I used those two specifically because in that pile there are items from GAP and Target that had the original tags on them.

In everything in life I’m finding that the sustainable method is usually the most affordable in the long term as well as the best for our planet. Babies don’t care what they wear and these clothes are pretty cute. It’s not like your baby is going to be upset it’s not wearing designer clothing so why are you buying it?

The best part is that when we are done we can either donate these items back to the thrift store or we can sell them in a yard sale for at least what we paid. My goal is for the cost of our babies first year of clothing to be as close to $0 as possible. I think with garage sales (once this COVID shit is over) and thrift stores are going to allow me to do it. Everyone has told us that kids are super expensive and if everyone says something there is a good chance it’s wrong.

behold The FI/RE Dad

Hey there, I’m the FIRE Dad. I have been working on this idea for years and even have multiple old blog style posts on my Google Drive. I have never published anything or put real effort into the process, but with the pandemic of 2020 and some life changing events I have decided that now is the best time.

I have played around with the idea of FIRE for a long time now. I’m not nearly as frugal as those that usually blog, but I’m nowhere near as spendy-pants as others at my income level. Through some decent investments and saving so much of what we make each year and investing that money into business opportunities at the age of 35 I have reached the point of Leanfire. 

Along with reaching Leanfire in the middle of a global pandemic, finding out my wife is pregnant and having one of my businesses totally shut down (we are in live events) we had a lot of time to finally evaluate what we really wanted out of life. Surprise, surprise it isn’t career oriented. My wife and I currently live in one of the most beautiful places in the world, Estes Park, CO. The views will take your breath away almost every day. We have world class hiking, climbing, trail running, backcountry skiing along with any other adventure you could want. The town is small but the tourists bring bigger businesses and we have those benefits year round. Despite it being a nearly perfect place to live we have decided to plan on a move and not a move that most anyone would expect.

Our goal is to buy a large plot of land in the northern midwest with 30 or more acres with a mostly done house and lots of timber. Any guest quarters, outbuildings will be high on our list along with any farming equipment because we are taking steps to start homesteading. We have some experience and are taking the next 1-4 years to hone those skills before we go “live” and us eating is somewhat dependent on our skills. 

So that’s the goal, we want to spend $400,000 or less on a homestead with tons of timber to hike, run, bike, and build more trails. I believe in doing things as cost effectively as possible while providing the most enjoyment. For us, homesteading is going to be the way we want our children raised. We want them to gain the skills to be self-sufficient, knowing where your food comes from and how to get it, how to hunt and respect where your meat comes from as well, and have a family that is active and engaged in their upbringing. 

We have grown herbs and small vegetables in the past, but were not particularly successful. We also  had chickens  which went quite well until a bear came and caused a bloodbath. Homestead 101 began for 2020 and it’s set to hard mode living in the mountains, but we are looking forward to growing our skills and getting ready for the big leagues. On this blog you can expect topics that relate to this journey in any way, from how I make a living, saving, investing to how I build my raised beds, my hydroponics experiments and which tomatoes can grow at 7,500’ of elevation. 

Thanks for reading,

FIREdad