My Personal Journey to Financial Independence - The Genesis

For much of my life I had the mentality of a person who's life journey outlook entailed the standard goal of getting a comfortable career, working my way up over time, then hopefully being able to retire in good enough health to enjoy it.  My plan included having a wife and kids, living in a comfortable home and enjoying vacations and spending time with loved ones.  I did not necessarily work overly hard in school, but did well enough to go to a good college.  While in college I began a co-op program, which later turned into a full time job.  Once I graduated, I swore that I was done with school forever as it had taken my 7+ years to get my bachelors due to doing school part time while working full time.  However, I soon realized that to get the high paying career I wanted, a Masters degree would be extremely helpful.  So, I was enrolled a short time after that.  I did actually work hard for the Masters and completed the degree in a year and a half.  This immediately paid dividends as I was promoted to a better position and given a roughly 15% raise as soon as I completed the degree.  Fast forward another year, and I was offered a job with another company for a 30% pay increase and better opportunity.  That was too much of an increase to pass up at that point in my career so I took it.  Jump ahead another 2+ years and here we are today.  In the last 3 years I have gotten married, moved to a different city not far from my hometown, have a daughter, and accumulated 5 rental properties.

The strange thing is that in the past few years I have become increasingly aware of the opportunities to not continue with the "standard" life journey of work till your sixties and retire.  I do not mean to just retire a couple years early in my mid fifties.  I am talking about drastically different lifestyles that lead you to being able to retire in your Thirties or younger.

I believe this came about when a friend referred me to a couple of sites where the blogger talks mainly about Financial Independence and Early Retirement.  My first exposure to such concepts came from reading Financial Samurai.  Initially I was just amazed by some of the stories and concepts that he discussed.  Eventually I began to look at my own situation in his posts.  He would look at things such as target net worth based on your age and alternative sources of income, normally referred to as your Side Hustle.  

Sam's articles inspired me to realize that there is MUCH more to life than grinding away in a cubicle to provide greater gains for someone beside myself.  I certainly was not in a place to quit my job to focus my efforts elsewhere, but I needed to figure out what my side hustle would be.  

If you have ever or decide to read Financial Samurai, you will see that Sam is a big fan of rental properties as a source of Passive Income.  The goal of Passive Income is just as it sounds.  Income that is generated by minimal effort.  Basically, making your financial investment work for you.

Being that I 1. Already owned a house and my then Fiance also owned one, and 2. Lived in one of the most depressed Real Estate markets in the country Metro Detroit, I thought this was an opportunity I should take advantage of.  On the other hand, I was also going to try it out of necessity as my house was severely underwater at the time due to a 2007 purchase and the real estate collapse that followed.  I would not have been able to sell and was considering speaking to an attorney about my short sale or foreclosure options.  But I decided to go for it.  I am reasonably handy and can fix just about anything, so I did some renovations and rented my house for about a $200/month profit.

And that was the first real step in my journey toward my future goal of Financial Independence and Early Retirement.  In the 2+ years since, my wife and I have accumulated 4 more homes which provide us a monthly profit of $2400/month as of this post.  I plan to get into more details on the properties in another future post.

All of this leads me to state my goal.  Ultimately Financial Independence and Early Retirement for myself and my wife.  I have built out some other shorter term goals that will lead us to that point, hopefully sooner than my expectations.

Here is my timeline of goals:

7 Years(Age 40) - Financial Independence and Early Retirement for my wife and I. This will be achieved when our passive income gets to approximately $10,000/month.  I believe this metric will change over time as we improve our budgeting and spending habits, but as of today, this is what I feel comfortable with.

2+ Years(Age 35) - Net worth of $1,000,000 combined.  This goal should be easily attainable due to our household combined income being roughly $250k/year including our rental income.  Most of this is attributed to my wife's high salary and great stock option and 401k that she has taken advantage of over the last 8 years with her company.  Her income allows us to invest in our rental properties.  A large part of this plan is dependent upon her continuing to work.  We may have another child within the next 2 years so that may alter things.

1 year - I have a goal of adding at least 1 more rental property per year as a way to increase passive income.  This will be dependent upon the real estate market though.  If the market is still up, I may look into alternative investment options.

This is a very rough outline of my plan. A plan that is always being tweaked and modified due to the new things I learn and other ideas I come up with.

I plan to begin a new series of posts to update the status of my goals and a snapshot of where we are in our progress.

Stay Tuned.

And as always, I appreciate any feedback.