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How I Plan to Retire at 30

by J. Money on Thursday, February 13, 2014

freedom sunset

[This is a guest post by FI Fighter. Let me know how you guys like this one - I've been heavily into this "retire early" stuff lately, and perhaps we'll make a series out of this :)]

Later on this year, I turn 30. That’s right, the dreaded THREE, ZERO… but it’s not what you think.

For one, I’m not freaking out and wondering where my best years went. Secondly, I have no intentions of trying to fight back time or YOLOing it up for one final hurrah. Lastly, I’ve never been more optimistic about life and absolutely can’t wait to turn 30!

The truth of the matter is, I’ve been trying to engineer my own Shawshank jailbreak for awhile now, and next year (2015), a year in which I’ll still be 30, is when I anticipate escaping prison… for good.

Precursor to Early FI

The thought of early financial independence first crossed my mind around Thanksgiving of 2011. I was living in Newport Beach at the time, and was just blown away with how unfrgual some of the people living there were. In particular, I knew a co-worker, slightly older than me, that would only drive luxury German automobiles. This guy even had a “backup” VW minivan, in addition to a pair of BMWs.

On the surface this guy looked like he had it made! A good paying job, married with a kid, owned his own residence, and had all the flashy toys everyone dreams about when they are broke and in college.

Unfortunately, everything comes with a price. As it pertained to my co-worker, it was easy for me to look pass all the bling, and focus in on a much crueler reality… the ravages of hard work.

To support his lavish lifestyle, this guy had to grind it out at work every day. He regularly worked ten hour days, sometimes more. Often times he would even come in on the weekends. Because of all that, he suffered the consequences. He wasn’t yet 30 at the time, and had more grey hair than most 40 year olds! His eyes were always bloodshot, and he just didn’t seem all that happy.

Even though I hadn’t yet started the journey to early FI when I first met him, I think subconsciously data points such as this were what ultimately drove me towards that direction.

2012: Inception

After reading Jacob Fisker’s Early Retirement Extreme book I was hooked, and fully on board with the whole early retirement concept. [Editor's Note: This is the same Jacob from the blog, Early Retirement Extreme, which has a cult following, similar to Mr. Money Mustache).

In 2012, I started the year off with $0 in passive income. Up to that point, all I had invested in were retirement accounts (401k and Roth IRA). Since I now knew that I wanted to escape the dreaded 9-5, I decided to dedicate all my efforts towards ramping up my passive income production.

By year’s end, I was able to purchase my first rental property, and I built up a dividend portfolio worth slightly more than $60,000. It wasn’t easy, and I had to make my fair share of sacrifices along the way to make that possible. Thanks to a few pay raises and large signing bonuses from jumping around different companies, my earned income did receive a nice shot in the arm to help make things easier.

Also, I would say that I was mostly frugal during that first year (I indulge a bit more these days), saving between 60-70% of my earned income. It was tough, but I have no regrets since it helped me build up that initial foundation.

When it came to expenses, I simply cut back on the things I didn’t absolutely need. No more gym membership - I played basketball after work with co-workers instead. I ate lunch at the company cafeteria where the food was subsidized. I shopped at Costco and bought everything in bulk. I resisted the flash of Orange County and kept on driving my beater car that had close to 100k miles on it. To save on rent, I lived with three other roommates. Miraculously I was able to work out a deal with the landlord to live in a condo five minutes from Newport Beach, all for just $700/month.

When you cut out the excess, the stash starts to grow and snowball. It’s a wonderful feeling, and seeing the incremental progress being made only motivated me further.

At the conclusion of 2012, I was receiving close to $100/month in dividends, and the rental was bringing in an additional $400/month.

2013: The Grind

I purchased three more rental properties in 2013 and went full steam ahead with real estate investing. In the process, I liquidated my entire dividend portfolio to have enough funds to close on my second rental property. Over time, I studied up on out-of-state investing, and eventually expanded outside of my local market. The cash flow numbers were just better elsewhere, so I said, “why not?”

My net cash flow at year’s end was about $1500/month. Ironically, that was the number I was originally shooting for when I made my declaration to start the journey to early FI back in 2012.

When I first began, my initial target retirement age was 37.5. Every year, I’ve been trying to reel that number in more and more… Since I’m now 29, and the end game has been revised to 30, there’s not much more I can do to reel in the end date. :)

2014: The Conservator [Present Day]

For this year, my plans are to acquire two additional properties to try and bring up the net cash flow to $3000/month by the end of the year. Also, my plans are to rebuild cash reserves so that I have a decent sized safety net in place prior to checking out of the cube for good.

I’ll also have those retirement accounts available as backup, but I don’t anticipate ever needing them. If all goes to plan, I’ll be able to donate all retirement funds to charity, many, many years down the road.

If I can get to $3000/month in net cash flow by the start of 2015, I’ll feel pretty confident that I can pull off early retirement at 30 in 2015.

Breaking it all Down

My original thinking was that early FI would be about a ten year plan. Initially, I thought I would get there primarily through the use of dividend investing and real estate investing.

As mentioned above, I was able to win two rental properties in the Bay Area in 2012. By no means was I trying to time the market or anything, but now that hindsight is 20/20 I can clearly see that I was fortunate to be able to win near the bottom of the Great Recession. Even more potent was the fact that I invested in an extremely volatile housing market, one that has surged tremendously in the two years since. Each of my Bay Area properties has appreciated over $100,000, and I still have a lot of equity tied up in both.

Without getting into too many details, I have about $240,000 in equity sitting in the first home. The second rental holds about $160,000. Altogether, that gives me $400,000 of ammo to play with.

If I can achieve my $3000/month passive income target by the end of 2014, roughly $2300 of that will be due to my other rentals. The first two properties in the Bay Area would contribute about $700/month in passive income.

By selling both those properties, I can then proceed to do a 1031 exchange, and use the proceeds to invest in real estate in a much cheaper (better cash flow) market. By doing a 1031, I’ll be able to capture all the appreciation without subject to any tax penalties.

I’ll still have to pay agent commission, closing costs, etc., but to keep things simple let’s say I’m left with $300,000 to work with once the dust settles. If I can find a market to generate 12% cash-on-cash returns, that would give me $36,000/year in net passive income, or $3000/month. Adding back the $2300 from my properties, I would be closing in on over $5000/month in net passive income.

Long story short, this is what would condense my ten year plan into four years. If the market continues to hold up, this would be my checkmate… End game, achieved.

How My Plan Really Works

Since my journey to early FI might only span four years (2012-2015), you’re probably wondering, “why not just keep playing the game for a little longer?” “Why not build up a stronger safety net?” Or perhaps you think I’m crazy and out of my mind…

The truth is, I’m really just THAT burned out with the corporate work environment and want nothing more to do with it. I believe I can do THIS because my primary focus has never been about amassing a substantial amount of wealth in my lifetime. No, my end game has always been, and always will be about Point Z.

I simply want my freedom. My philosophy on life is somewhat different than the mainstream… I don’t need status, or power. I don’t need to live in an expensive city so that I can reassure myself that I’ve “made it” in life. Frankly, I would rather live in a cheaper country (Thailand, Philippines, etc.) then to live in San Francisco and have to spend all day working to support my $5000/month rent.

What’s the point of living in a wonderful city if you never have any free time to enjoy it? Isn’t the whole point of living in an expensive city to earn more money? Once you’ve taken care of your finances, why not live someplace else where your dollar goes a lot farther? If you’re willing to do that, you’ll be able to get away with needing even less passive income.

Further, I don’t need to own my own home. Never have, probably never will. I’d rather be able to fit all my belongings in a suitcase and travel the world, in search of adventure. I aspire to be a polymath, and I think that being able to do whatever I want, whenever I want, would be the greatest gift of all. When I stop to think about it, I haven’t owned my own time since I was 5 years old. I’ve been following orders ever since…

[Editor’s Note: I had to look up what the heck a “polymath” is, haha… Here’s the answer from Wikipedia: “A polymath is a person whose expertise spans a significant number of different subject areas; such a person is known to draw on complex bodies of knowledge to solve specific problems.”]

When the clock stops, and my life registers all zeros, I’d like to have a film reel worth re-watching. If you told me to sit down and re-witness the last seven years or so (since I started working full time), I would seriously just want to fast-forward it, go to sleep, or even cry. There have been some great memories, don’t get me wrong, but the majority of that movie would take place in a run-down, dilapidated old lab. No thanks! Those mundane memories will probably still be giving me nightmares thirty years from now…

Swinging for the Fences

Many people grind it out all their lives, so they can retire at 65 and finally have free time to themselves. Sadly, a lot of these people end up not knowing what to do with it. They’ve become institutionalized. They are so used to following orders that they no longer know how to think for themselves.

I don’t want to become one of those people. I want to embrace life and give it my best shot. I want to be finished with the nose-to-the-grindstone lifestyle while I still have my health and energy intact to actually go out and do something worthwhile.

I’m a bit more of a risk taker than most. I think that’s probably because I want out of the rat race so darn bad. That, and in my mind, it’s better to take a chance now, while I’m still relatively young, than to risk it all later, when I’ll have too much to lose.

Besides, what’s the worst that could happen? I fall flat on my face, lose everything, and have to hit the reboot button? Next thing you know, I’m back in the rat race… just like everyone else… Ultimately, time will tell. But I only get one shot at this Game of Life… I think I’ll take my chances.

“You want to know how I did it? This is how I did it, Anton. I never saved anything for the swim back.” (Gattaca, 1997)

——-
FI Fighter is an early financial independence seeker who aims to get there by 30. This day will arrive when the passive income and semi-passive income streams bring in more each month than is needed to pay bills. Let the journey continue!

[Photo cred: kalyan02]


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{ 90 comments… read them below or add one }

1 MMD February 13, 2014 at 5:59 am

Nice work FI Fighter! I like how your target age kept coming down lower and lower as your cash flow progressed. This is once again a good example of how concentrating on your passive income efforts really can help you get what you want a lot sooner in life.

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2 FI Fighter February 13, 2014 at 9:54 am

MMD,

Thanks! I very much enjoy seeing the target age go down as well ;)

Yeah, it’s definitely the passive income that’s important. That’s what will ultimately buy you financial independence. That’s why I’m ok with selling some of my more expensive rentals and exchanging the equity to buy cheaper properties in areas that cash flow better.

All the best!

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3 Mrs. Pop @ Planting Our Pennies February 13, 2014 at 6:40 am

Are you single, FI Fighter? You sound a lot like what I imagine Mr PoP would have turned into if we hadn’t gotten married. =) Instead I require a bit more stability and preparing for “what ifs” a bit more, so I don’t think we’ll be FI until we’re 35 or 36.

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4 FI Fighter February 13, 2014 at 9:57 am

Mrs. Pop,

Yeah, I’m executing this plan solo right now, but who knows what tomorrow will bring? One thing I’ve learned is to always be open minded and willing to adapt. I’ve revised my plans a few times already… so, what’s a few more revisions? ;)

Reaching FI at 35 or 36 would be an incredible accomplishment! Congrats to you and your husband on building up such a large nest egg at such a young age.

Cheers!

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5 J. Money February 15, 2014 at 2:47 pm

I think that’s the key right there – adapting as situations change. Nothing in life is permanent and you’ll just drive yourself crazy if you don’t tweak as time goes on.

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6 a terrible husband... February 13, 2014 at 6:47 am

Wow. Way to build up so quickly! If you have income and things like health care covered, you’ll have plenty of time to supplement income online or in other ways that are more consistent with your interests if you want or need something. Good luck getting out of the cubicle!

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7 FI Fighter February 13, 2014 at 9:59 am

a terrible husband…,

Thanks! I can’t wait to get out of the cubicle permanently. Mine happens to be located next to a window, which makes things even harder in the summertime.

Yeah, once you reach early FI, the world (and possibilities) open up even more. That’s exciting to think about, and something I’m very much looking forward to. Having the ability to direct my life down any path I choose.

Take care!

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8 Retire Before Dad February 13, 2014 at 7:36 am

FIF,
Great to see you on BAS today. I’ve enjoyed following your real estate endeavors and it makes me want to buy more rental properties… but at a great price. Once you’re independent you should kick it Thailand for a while. That’s a great way to keep spending low and its beautiful.
-RBD

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9 FI Fighter February 13, 2014 at 10:01 am

RBD,

Good seeing you here! I’ll be visiting Thailand in August, so that my be a preview of things to come later. Who knows? I’m looking forward to the trip and exploring the rest of the world. I love the U.S., but I really need to get out of the country and expand my horizons.

All the best!

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10 Dave @ The New York Budget February 13, 2014 at 7:55 am

My current FI plan targets age 35 (5 years from now), but with recent thoughts of real estate investing, perhaps I can supercharge that like you did.

Also – great quote from a great movie at the end!

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11 FI Fighter February 13, 2014 at 10:03 am

Dave,

35 is a wonderful goal, and I hope you are successful in getting there. You’ve got a plan, and real estate might very well help you get there sooner.

haha, yeah that line is one of my favorites. Who doesn’t love rooting for an underdog?

Cheers!

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12 Clarisse @ Make Money Your Way February 13, 2014 at 8:09 am

I think I will reach my FI at the age of 40 because honestly, we was broke before and it’s just recently that we got on the right track. We don’t have debt and hopefully not in the future.

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13 FI Fighter February 13, 2014 at 10:05 am

Clarisse,

Great job of getting out of debt and back on the right track. 40 is wonderful goal, and way earlier than most people even begin to think about the possibility of retiring.

Better to do it while you’re still young and able, I say.

Best wishes!

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14 Liam @ HBS Real Estate February 13, 2014 at 8:27 am

I learned about Financial Independence through MMM’s blog. I had always questioned why someone would enjoy life in the waning days of their health, rather than in the prime of your life, when health is abundant.

I forget how I stumbled onto FI Fighter’s blog, but he’s got an awesome strategy for early retirement. I’m on a similar path as he is with a goal of early retirement in 2016 so I can hike that Appalachian Trail with my dad, before that dream becomes impossible. My goal is to not have to return to the 9-5 grind after spending six months hanging out on a trail with my dad.

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15 FI Fighter February 13, 2014 at 10:06 am

Liam,

Man, that’s so awesome. I really hope you do get to early FI in 2016 and get to enjoy that special time with your dad. Great goal!!

Yeah, I kind of imagine the same thing. Reaching early FI and doing a round the world expedition. Once I’ve gotten that out of my system, I’ll look for something new, more fun to do. No more 9-5, I hope!

Take care!

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16 Nina February 13, 2014 at 8:31 am

This sounds like a very ambitious plan but it is also really inspiring. I wish you the best of luck with it.

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17 FI Fighter February 13, 2014 at 10:07 am

Nina,

Thanks! Appreciate the support and encouragement.

Cheers!

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18 Blake @ BeanCounterbyDay February 13, 2014 at 8:34 am

Very impressive to have built up your real estate portfolio so quickly! It definitely sounds like you have a solid plan and will be able to see it through. I considered getting into the rental real estate market a couple of years ago myself, but I finally decided I’m just too high strung to deal with renters, haha. Best of luck!

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19 FI Fighter February 13, 2014 at 10:11 am

Blake,

Thanks! It took a lot of hard work and perseverance in the beginning, but things are now starting to get easier thanks to the recovery. Not sure what tomorrow will bring, and if there is another downturn, well, the story will change and I’ll have to revise the plan yet again.

Real estate isn’t for everyone, and one reason why I like to call it earning semi-passive income. The good news is there are a lot of alternatives that can also lead someone to early FI. Stocks are the most obvious alternative used to help people get there.

All the best!

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20 J. Money February 15, 2014 at 2:51 pm

I like that you don’t call it passive income too. Even when you’re not physically dealing with it (which everyone does at some point) it can still weight heavy on your mind at time which is still something. It really is like a part-time job that ebbs and flows depending on what’s going on. A part-time job that apparently pays really well too :)

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21 Michelle February 13, 2014 at 8:41 am

Wow you are doing awesome. Good job on doing this in just a few years. I definitely want financial independence, so that means I need to start working on passive income. I haven’t really done too much with that though but I still have high hopes :)

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22 FI Fighter February 13, 2014 at 10:14 am

Michelle,

Thanks! Looks like you are doing pretty awesome for yourself, managing a full time job and building up your online business.

Building additional revenue streams, and passive income can only be a good thing. The more you have, the quicker you’ll get to the end game.

Best of luck!

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23 Franklin B February 13, 2014 at 8:44 am

Great story and fantastic accomplishment. Being FI provides you opportunities for certain liberties and great adventures. You’ve been driven by a goal for the past year that has created this burning passion in you. When you reach the top of the mountain, you will stand alone. ( Ah, the youthful exuberance of the age 30 escape fantasy. We’ve all been there at age 30. Why age 30 you wonder? If you read the Primal Teen (Barbara Stauch) she explains that the brain completes it’s development specifically in the Frontal Cortex. The frontal cortex is the area of the brain that controls judgement. It may be hard to believe, but it’s like a light switch turns on in brain and everything seems to fall into place and things are now crystal clear. Those of you who are over 30 can validate this feeling and experience.)

This will be your first conundrum. The fantasy of traveling to exotic places while you are still working on the current goal may feel like a concrete sound plan, but it’s not a long term sustainable goal. You seem to be a person driven by goals, so while you are planning your escape on page one, I would suggest writing down two or three more goals to work on page two. Take a well planned year off while keeping your eyes peeled for some really cool opportunities. You’ll surprise yourself. Your 30, so you have plenty of mileage on your chassis and plenty of more opportunity to make a difference in the lives of other people. Paying it forward just once will set you free at another level. Pulling people up the ladder is heck of a lot more fun when you are at FI because you can choose your projects and no longer owned by “The Man”.
Keep us us updated as you develop your plans so others build theirs.

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24 FI Fighter February 13, 2014 at 10:20 am

Franklin,

Thanks for the insightful comment. You’re right, it took a lot of passion and drive to basically go from zero to where I am today.

I haven’t yet read Primal Teen, but I think I’m going to go pick up a copy now. Sounds interesting, I had no idea that the brain did that… I’ll have to keep an eye out for that as I cross over into my 30′s.

That’s a good point you bring up, and something I have thought about. I don’t necessarily look at the end game as an “end”… more like the beginning of the next chapter in my life. In some ways, I have experienced this before. Graduating college, getting that first job, switching fields, going to a new company, etc.

Granted, nothing to the degree of what early FI will bring. Yeah, there is a lot to think about and by no means do I think I have everything figured out yet. That’s also part of the allure and excitement. It’ll be a good test, and I’ll get to learn more about myself. What is is that I really want… I just know right now, if the story concluded, I would feel like I missed out on so much… Definitely, around the world traveling is something I need to get out of my system. The burning desire to do that is too strong right now.

Looks like I have some more things to think about!

All the best!

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25 J. Money February 15, 2014 at 2:53 pm

Great insight, Franklin – appreciate you sharing it with us here.

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26 Brian @ Debt Discipline February 13, 2014 at 9:01 am

Nice Job FI. I got my first taste of this concept from MMM. I think the key to pulling this off is starting young. Best of luck!

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27 FI Fighter February 13, 2014 at 10:31 am

Brian,

Thanks! Yeah, definitely starting young makes a world of difference. You always hear the wealthy say, “I wish I would have started earlier”. The powers of compounding are at its best when you have time to work with.

Take care!

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28 Matt Becker February 13, 2014 at 9:37 am

Congrats man! Cool story and nice work accelerating everything so much. Good luck with all your adventures!

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29 FI Fighter February 13, 2014 at 10:31 am

Matt,

Thanks! Appreciate the kind words and support.

Wish you the best as well!

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30 writing2reality February 13, 2014 at 9:40 am

FI, wasn’t expecting to see you over here on BAS this morning, but a kick-ass surprise! I think you will be well covered from an income standpoint when you finalize the 1031 exchanges and grab some more properties with that equity. However, Franklin B brought up a great point above about being tremendously driven and needing to find a similar focus during the next stage of your life. The transition from going balls to the wall to get FI is going to be stark.

I’ll use Financial Samurai as an example. Busted his ass, retired at 33, grew a successful blog and other ventures, but needed a challenge. Now he is back working, not because he needs to, but because it will fill a void. I would take steps now to fill that void if possible.

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31 FI Fighter February 13, 2014 at 10:36 am

writing2reality,

Good seeing you here bud! Yeah, the 1031 exchange(s) are vital to my current plan, so everything would essentially fall apart if they were to not happen. But who knows what the future will bring? Today’s today, and that’s the plan for right now.

Yeah, I’m starting to think about the transition more and more, especially as the end date gets closer to reality. I still kind of have a hard time believing it’s tangible, but I think I’ll probably focus on this more when I’m traveling in August. I’ll have a lot of time to reflect then.

In regards to “what to do”, I did a post about YOLOing it up every 7 years… A rough outline, but I could see myself using that as a blueprint, once I get the travel bug out of my system.

Sam is badass! Definitely not the type of guy to just sit around and do nothing. Honestly, I’m still not sure, and will learn over time just who I really am…

All the best!

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32 Becky @ RunFunDone February 13, 2014 at 10:01 am

I’m aiming for early retirement, but not at 30…(since I’ve already passed 30). I’m aiming for 50. I’m saving 25% of my income, rather than an extreme amount. An extreme amount is not actually possible for me, because I took out crazy amounts of loans for graduate school. (Whoops). On the bright side, I have a career that is relatively fulfilling in which I am making the world a better place (I think). It’s amazing that you have the opportunity to retire at such a young age!

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33 FI Fighter February 14, 2014 at 12:11 am

Becky,

That’s great that you are doing something you enjoy that’s also fulfilling. If my job wasn’t so soul sucking, perhaps I wouldn’t be so adamant about calling it quits so soon…

25% savings is quite good and more than double what they recommend in those money magazines. Looks like you are on the right path. Just gotta keep focused on paying off those loans!

Best wishes!

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34 Will Murphey February 13, 2014 at 10:20 am

Very nice story. I love what you said about “why not just keep playing the game for a little longer?” “Why not build up a stronger safety net?” Or perhaps you think I’m crazy and out of my mind…

I felt the same way when my wife and I retired at 37 ( 2 years ago). If you have this mentality of always pushing it for one more year, you will never retire, something will always come up. When you have enough just hit the “goodbye” button on work. Your story with real estate investing for passive income in very similar to my own. Great job on doing this at 30! You are an inspiration for others!

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35 FI Fighter February 14, 2014 at 12:14 am

Will,

Congrats on being able to retire at 37! That’s an incredible accomplishment. Is retirement every bit as good as you had envisioned? ;)

Yeah, the drive to be safe is something that could potentially hold you back from doing it… I was kind of worried about that too, but when I opened up the doors to living overseas for a few years, I was less scared of needing more safety buffer. If my plans were to keep living in the Bay Area, I would probably need 5 more 1 more years…

Cheers!

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36 J. Money February 15, 2014 at 2:55 pm

Love the blog name, Will, haha… going over now to check it out :)

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37 Amanda @ Passionately Simple Life February 13, 2014 at 10:20 am

Really inspiring post! Most people think of retirement as something done around the ages of 50 and 60, which always makes me super sad. Why wait that long to enjoy everything the world has to offer! Can’t wait to start myself along that path!

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38 FI Fighter February 14, 2014 at 12:16 am

Amanda,

Thanks! I feel the same way, and can’t imagine retiring at such a late age. Life is about finding a way to maximize time, energy, and money. When you have all three, you are in the best position to be happy.

When you are young, you have lots of time and energy… but no money. When you are in your working years, you have lots of money and energy, but no time. When you are old and grey, you have time and money… but no energy.

I’m selfish. I want all 3! :)

Take care!

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39 John S @ Frugal Rules February 13, 2014 at 10:24 am

I absolutely LOVE that quote from Gattaca! That’s really what it takes – playing big or going home. I’d much rather be guilty of the former as opposed to the latter. As someone else commented, I love how your target age started to come down year over year which shows your perseverance to reach your goal.

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40 writing2reality February 13, 2014 at 10:22 pm

Fun Fact: I just watched that movie tonight. Odd coincidence, but absolutely love the underlying theme. That line is absolutely empowering and has so many applications.

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41 FI Fighter February 14, 2014 at 12:21 am

writing2reality,

It’s a pretty serious, but deep movie. I get inspired each time I watch it. If someone has 1/10 the drive as Jerome, they would go far in life.

Glad you enjoyed it!

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42 J. Money February 15, 2014 at 2:56 pm

I’ve never seen it, but now obviously I need to!

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43 FI Fighter February 14, 2014 at 12:19 am

John,

Yeah, one of my favorite quotes as well. If I’m going to do this, I’m either going to succeed brilliantly or fail spectacularly. Nothing in between.

Like you said, go big or go home!

Cheers!

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44 Mark Ross February 13, 2014 at 11:11 am

Nice plan FI Fighter. I hope you get what you want and be happy with what you could accomplish there. Good luck! :)

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45 FI Fighter February 14, 2014 at 12:24 am

Mark,

Thanks for the support. Appreciate it!

Cheers!

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46 Cat@BudgetBlonde.com February 13, 2014 at 11:39 am

I love your plan, your story, and your goals! It’s not easy to resist the lifestyles others have in pursuit of something greater. I am on a slightly different path with twins on the way and a husband in medical school. Still, I plan on resisting the typical physician lifestyle and spending a lot of our income on experiences and traveling with the kids. Thanks for sharing your story- very inspiring!

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47 FI Fighter February 14, 2014 at 12:26 am

Cat,

Thanks! It was more difficult to resist temptation when first starting out, but over time it’s gotten easier. I think once I started seeing the progress being generated, I knew I was on the right path.

Congrats on the twins! Sounds like a very exciting time in life for you. :)

All the best!

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48 Ms. Debt Emergency February 13, 2014 at 11:40 am

Awesome job FI Fighter! I am 30 as well, but have a far longer way to go than you! I have $175k in student loan debt, but I am working on bringing that number down to 0 so I can seriously start working towards Financial Independence. Congratulations! Your hard work has paid off. :)

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49 Josh February 13, 2014 at 12:19 pm

Keep on digging yourself out from under those student loans. I started out at $55k and it seemed daunting. Lately I’ve been throwing everything extra I’ve got at them and things are finally starting to move. Personally I liked Dave Ramsey’s Debt Snowball method of attacking debt, but like exercise plans, the best one is the one your can stick with over time.

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50 Ms. Debt Emergency February 14, 2014 at 5:41 pm

Thanks Josh! That’s awesome that you’ve found a method that works for you to pay down that debt. I’m still figuring out what method will work best for me. We’ll get through this! :) All my support and well wishes to you.

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51 J. Money February 15, 2014 at 2:57 pm

Good luck to both of you! It’s definitely possible :)

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52 FI Fighter February 14, 2014 at 12:28 am

Ms. Debt Emergency,

Thanks! I was lucky to start off with minimal debt, so had a headstart, so to speak. The debt may seem like an uphill battle at first, but just keep plugging away at it, and eventually you will succeed!

Best wishes!

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53 Ms. Debt Emergency February 14, 2014 at 5:42 pm

Thanks so much for the support! Appreciate it.

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54 Steve February 13, 2014 at 11:41 am

I have one rental that was more of a we didn’t want to sell the old house at the bottom of the market when we bought the current house than an investment property. While I applaud you for achieving what you have, I need to add that if given the choice between the corporate world, I am part owner of a small 6 person company, and managing a number of rental properties… give me the corporate world. I have limited handy man skills, I do not have the people skills to manage renters or deal with the legal issues if things go south and the rent check stops showing up.

So to me, your situation is one that works for you and congrats for making it happen but that is not what I would strive for.

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55 FI Fighter February 14, 2014 at 12:31 am

Steve,

I currently manage two rentals, but once I check out I will delegate everything to a PM. I don’t want to deal with the day to day management, especially since I’ll start the journey a few thousand miles away.

Yeah, rentals aren’t for everyone, I agree. You just have to find the situation that works best for you. If the corporate world works better, that’s wonderful.

All the best!

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56 Fig February 13, 2014 at 11:47 am

Great plan! I just had dinner with friends last night and a large part of our convo was about passive income and rental income. All of use want to jump into it but none of us have made the move yet. Love your story and how quickly you have accomplished everything!

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57 FI Fighter February 14, 2014 at 12:32 am

Fig,

Thanks! A great place to start would be to sign up for Bigger Pockets forum. It’s absolutely free and you’ll get to network with tons of other real estate investors just getting started. Great community and you’ll learn a lot.

Take care!

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58 Financial Samurai February 13, 2014 at 11:59 am

Good luck man! The real fun will begin when you hit 30 and have that decision to make. It is not easy to walk away from the bucks once you are immediately faced with the decision.

It took me about 1-1.5 years of planning before pulling the rip chord. But, perhaps you will have more courage!

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59 FI Fighter February 14, 2014 at 12:34 am

Sam,

Thanks! I’m anxiously awaiting for that day… Who knows, maybe I’ll have to take a page from your book and work on engineering my own layoff ;)

My plan sort of works and I can minimize the courage needed by starting the journey in a cheaper country. I get to travel and world, and reduce expenses. Well, that’s the plan for now, anyway.

All the best!

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60 Josh February 13, 2014 at 12:17 pm

Great Post FI Fighter, and thanks for sharing J$!
Couple of questions?

What % down have you been putting on your rental houses? Is it the minimum required by your lenders or a specific amount?

Have you found any great real estate investment blogs or books you would recommend?

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61 FI Fighter February 14, 2014 at 12:38 am

Josh,

Thanks! I started off putting down between 20% and 25% on the first four properties. Once you get to 5, the Fannie Mae guidelines require 30%.

I’m using conventional loans, and my guess is that they all adhere to very similar underwriting guidelines.

Bigger Pockets forum would be the absolute best resource for REI. I like the book Buy and Hold Forever by David Schumacher. His philosophy isn’t necessarily about maximizing cash flow, but about buying solid and stable long term investments. He emphasizes location above all else. I don’t agree with all of it (I would never buy a property that was negative cash flow right off the bat), but his logic is very sound.

Cheers!

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62 Brooklyn Money February 13, 2014 at 3:12 pm

I’m so conservative i’d want to have a big nest egg in cash on top of the rentals to deal w/ vacancies, repairs, etc. Basically I read this and thought “How much cash do you have” but that’s quite a personal question! I will check out your blog for more insight. Congrats for not being scared to take risks and having them pay off!

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63 FI Fighter February 14, 2014 at 12:41 am

Brooklyn Money,

Those numbers used in the article are projected numbers, but they are projected net cash flow numbers which do account for vacancy/repairs/maintenance. the 12% return assumes allocation for those expenses.

The plan is definitely not without risk, which is a reason why I’m dedicating 2014 towards building up cash reserves. The retirement accounts will be my backup… that I hope I never have to use.

Cheers!

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64 Mel @ brokeGIRLrich February 13, 2014 at 5:18 pm

Being totally fed up with corporate America a few months ago was what spurred me to start paying more attention to my finances. Most of my 20s were kind of awesome, even working for someone else, but my last job and this one have reminded me how much I don’t like working for other people.

And I totally agree with living a life you want to be able to look back on happily when you die. I think everyone who talks about living for retirement after 65 is a little nuts – not saying there’s still plenty of life to live then, but you’ll certainly have missed a lot too if you wait that long to start exploring.

The Philippines are a super cost effective place to live – good luck exploring everywhere! I’m really sort of jealous.

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65 FI Fighter February 14, 2014 at 12:44 am

Mel,

I definitely hear you on being fed up with Corporate America! Yeah, the plan is to start enjoying life more, and what better time to do it than in your 30′s when you’re still somewhat young and full of energy? I don’t think I could wait until 65 either… just seems so far off into the distance… like an eternity away.

All the best!

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66 Aimee February 13, 2014 at 5:44 pm

“Tell me, what is it you plan to do with your one wild and precious life?”
Mary Oliver

I have similar lifestyle ambitions, and this is the quote that inspired me.

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67 FI Fighter February 14, 2014 at 12:46 am

Aimee,

Great quote! I love the contrast between wild and precious. Wild implies fun :)

Cheers!

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68 Izzye G February 13, 2014 at 6:32 pm

Great article! You mentioned that you will me buying properties in other markets, by that I guess you are thinking buying out of state. If thats the case are you planning of moving or hiring a management company? I ask because thats what I am debating now investing in depressed properties in other areas.

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69 FI Fighter February 14, 2014 at 12:47 am

Izzye,

Thanks! Yeah, I am buying out of state rentals. I hire a PM for all out of state investments. I mostly try and focus on buying into major metropolitan areas that have either large large populations, or strong job growth. Just trying to mix it up and diversify into different markets.

Best of luck!

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70 alana February 13, 2014 at 10:33 pm

Hey FI Fighter,
yesterday at done by forty now today here, you seem to be popping up everywhere. Hope this brings some traffic to your blog as some solid posts are being dished out on a regular basis there….j money, still love ya!

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71 FI Fighter February 14, 2014 at 12:48 am

Alana,

Thanks! Appreciate the support!

Haha, yeah I’m slowly making my way around. Thanks to J$ for giving me the opportunity to post on here. ;)

Cheers!

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72 J. Money February 15, 2014 at 3:00 pm

I love you both :)

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73 Brett February 13, 2014 at 10:59 pm

After reading this I really don’t agree with the FI Fighter. He is 29 and been working for 7 years, yes 7 years, and tired of the ” rat race”. I predict this guy is back to work in 5 years. I also predict him regretting “retiring” at 30 because he will not have saved any money for those 5 years and find himself 5 years beihind the rest of us. He should sell these rentals if he has as much equity in them as he claims. Rates will be going up soon and home values will come back down, especially in California. I think we all would love to retire early but 30 seems a little silly to me…. Fast forward 15 years that $5,000/month is worth like $3,000 (maybe) with inflation. I enjoy this blog but not this post.

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74 J. Money February 15, 2014 at 3:01 pm

No need to agree with everything – thanks for sharing :) And reading this blog!

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75 FI Fighter February 15, 2014 at 3:46 pm

Brett,

For sure, nothing is guaranteed in life… well, maybe except death and taxes, as they say.

Sure, things might not work out, and I guess I could “fall behind”… but in another sense, I won’t because I’ve never looked at the journey to early FI as a race :)

You just have to do what’s best for your own situation.

All the best!

p.s. I would imagine there would be quite a large number of angry real estate investors out there if their investments couldn’t track (exceed) the rate of inflation… Have you seen what rent goes for in San Francisco these days?!? I recently met a girl who’s family owns a 7 plex in Russian Hill. $5000/month for the basement unit, she says ;)

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76 theFIREstarter February 14, 2014 at 3:56 am

Haha… I saw the post Title in my email and wondered if this might have been a guest post from you FI Fighter! Nice one! :)

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77 J. Money February 15, 2014 at 3:02 pm

Yes, I am sadly over 30 already ;)

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78 Refinerr February 14, 2014 at 11:41 am

DUDE! I thought I was the only one in OC that even knew about financial independence! I was also in Newport Beach around that time when I started to find other FI blogs and get into things. I also worked in that area at a CPA firm where many of the partners drove luxury German cars and some even had their shirts custom made! I’ve since moved from both my home and work place to better areas and just started my own blog/conversation to learn/share the knowledge.

Also bonus points for knowing what 1031 exchange is! Orange County was built on that – most of the real estate here is owned by a handful of families because of 1031 exchanges. Is this a common practice still?

I also want to get out of corporate to be a polymath and also turning 30 this year! I looked it up after a friend said it on Facebook a month ago and kept accidentally saying “polyglot” instead (although that is actually something I aspire too as well)!

I know I’ve used up a year’s worth of exclamation points already but I’m just so happy to find someone with so many similarities in 1 article! I’m not a stalker but can we just be best friends already!?

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79 J. Money February 15, 2014 at 3:04 pm

haha…. now you made me go look up “polyglot!” :)

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80 JC @ Passive-Income-Pursuit February 18, 2014 at 2:03 pm

I’ve been following FI for a while now from his dividend investing days to now his budding real estate empire. It’s been a very inspiring journey to follow along and has motivated me to further expand my passive/semi-passive income sources by getting some rental property exposure. Seeing him bring in his FI date continues to push me to want to bring mine in even further. I’ve still got a while but it’s coming together.

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81 FI Fighter February 18, 2014 at 11:36 pm

JC,

Thanks brother, you inspire me too! It’s gonna be so awesome once we all get to the end game… Actually, just being on the journey has already been an incredible experience, as I’m sure you can attest to.

One of these days, all of us early FI bloggers are gonna need to get together for lunch and share some stories :)

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82 Dividend Mantra February 18, 2014 at 9:35 pm

FI Fighter,

You’re on an amazing journey, Donald Trump, Jr. :)

Building up thousands of dollars per month in passive income by the time you’re 30 is a feat that very few individuals in the entire world can claim. It’s a hell of an accomplishment.

Looking forward to reading about your world travels later this year to see where the ultimate early retirement locale is.

Best wishes.

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83 FI Fighter February 18, 2014 at 11:39 pm

DM,

Thanks for the continued support, as always! Just like with JC above, you were one of the first pioneers of early FI that I followed when I started the journey.

Yup, I’m really looking forward to that round the world trip in August. I’ll do some reconnaissance work for all of us while I’m out there. :)

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84 Matt February 19, 2014 at 9:00 am

Good stuff – thanks for sharing! I’m pushing hard to get myself into the real estate game this year or next and then to keep growing the “passive” portfolio beyond that. It’s tough sometimes to decide when I’ll be able to actually walk away from the day job – getting that regular, almost guaranteed income is pretty sweet. It’s easy to say just one more year…

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85 FI Fighter February 20, 2014 at 12:20 pm

Best of luck to you Matt!

Yeah, the “one more year” problem is one people struggle with. I kind of look at it as a good problem to have. If you have it, you’re doing something right ;)

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86 Pauline February 19, 2014 at 1:23 pm

I had a similar plan to yours and worked hard at it for only 4 years, with a decent UK salary and tons of odd jobs, investing the better part of the money. I thought it would take me until 40 but at 29 it was enough to be safe anywhere and live simply. Like you I could pay the SF rent but don’t see the point, I prefer traveling to an expensive city and really enjoying it than paying the price all year long and barely getting out. $3,000 will go a long way abroad (or in the MidWest) even if you get married and have kids. Most importantly your behavior will let you avoid waste in your spending and always hire-able if you need to go back to work as you are flexible and not afraid of change.

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87 FI Fighter February 20, 2014 at 12:16 pm

Pauline,

You are my hero and I’m trying to follow in your footsteps ;)

One day soon, I’d love to travel the world and explore. I’m with you, and could never justify paying so much for rent. I’d rather go experience new things AND save money in the process. Maybe you have to be somewhat nomadic to do that, but if you are, win-win.

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88 Marvin February 19, 2014 at 7:16 pm

I’ve been following your story for a while FI and you are absolutely crushing it. Your blog and the information you lay out here is inspiring to many, thanks for being so transparent!

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89 FI Fighter February 20, 2014 at 12:24 pm

Marvin,

Appreciate the support Marvin! You know I hate wealth gurus, so transparency is the name of the game/blog ;)

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90 Eric April 20, 2014 at 11:57 pm

Wow FI fighter, congrats. Keep working at your goal as I know you will.

I read a story about a guy retiring in his mid-20s who started up a business that took off. Being financially independent and able to retire at age 30 or before is astounding.

I can’t imagine doing what you want with your life. Choosing to do things. Choosing to work a little, only if you want to ;)

Keep it up man, I’m excited for the updates.

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