Wednesday, May 18, 2016

Starting the Journey...

In my last post, I mentioned my biggest goal at the moment, to retire in 10 years.  I have to admit, it is a little unusual. Many people see it as unobtainable, or impossible; a dream. But I know it is possible. I just have to break it down.
Like all giant obstacles, my goal has several sub-goals, achievements, and steps. This post will allow me put them all out on paper (so to speak) and publish my plan to keep me accountable.
The way I see it, my early retirement has 3 parts:
  1. Decrease Expenses
  2. Increase Income
  3. Save, save, save!
Each of part have a common purpose of early retirement. Each goal has additional sub-goals.
  1. Decrease expenses
    • Create a budget
    • Track expenses
    • Make adjustments as necessary
    • Pay off Student Loans
    • Pay down Home/Rental
  2. Increase Income
    • Finance Industry (Main job)
    • Real Estate Rentals (Side Hustle)
    • Investment Income
  3. Save, save save!
    • 3 Month Emergency Fund
    • 401(k) contribution (with match)
    • Traditional IRA contributions
    • HSA contributions (with match)
    • Taxable Brokerage Account
There are also different micro-goals that I see as mandatory for success. I have recently spent some time getting to know myself. How I tick, what motivates me, what frustrates me, etc. And I have realized that I am more inclined towards many small/short tasks rather than big projects. Its not so much about the challenging aspect, rather the way my mind seems to be wired to feel success.  These are specific numbers or milestones I want to have in each respective sub-goal.

  1. Decrease expenses
    • Create a budget
      • Consistently stick to a budget (12 months +)
    • Track expenses. Make adjustments as necessary
      • Show downward trend in spending
    • Pay off Student Loans
      • $1200 loan paid off by 2017!
      • $4500 loan paid off by 2018!
    • Pay down Home
      • Balance $235,000
    • Pay down Rental
      • Balance $196,000
  2. Increase Income
    • Finance Industry (Main job)
      • Increase income to $100,000 by 2017
    • Real Estate Rentals (Side Hustle)
      • Increase monthly income to $500 by 2017
    • Investment Income
      • Reinvest all income for 2017
  3. Save, save save!
    • 3 Month Emergency Fund
      • Save ~$10,000 by May 2017
    • 401(k) contribution (with match)
      • Increase contribution to 25% by 2017
    • Traditional IRA contributions
      • Contribute $11,000 for wife and I by 2017
    • HSA contributions (with match)
      • Maximize HSA $6750 by 2017
    • Taxable Brokerage Account
      • Increase balance to $5,000 by 2017
Each micro-goal has its own steps for accomplishing the micro-goals. The Scientific geek inside me calls these nano-goals, since 1 nano-goal is equivalent to 1x10^-3 micro-goals. Anyhow...

  1. Decrease expenses
    • Create a budget
      • Consistently stick to a budget (12 months +)

    • Track expenses. Make adjustments as necessary
      • Show downward trend in spending
    • Pay off Student Loans
      • $1200 loan paid off by 2017!
      • $4500 loan paid off by 2018!
        • $137/month
    • Pay down Home
      • Balance $235,000
        • mortgage $1217/month
    • Pay down Rental
      • Balance $196,000
        • mortgage $1050/month
  2. Increase Income
    • Finance Industry (Main job)
      • Increase income to $100,000 by 2017
        • Look for ethical Financial Advisory firms
    • Real Estate Rentals (Side Hustle)
      • Increase monthly income to $500 by 2017
        • Save $250/month excess from Rental to increase Real Estate portfolio
        • rentals
        • raw land seller financing
    • Investment Income
      • Reinvest all income for 2017
        • contribute excess savings to Betterment
  3. Save, save save!
    • 3 Month Emergency Fund
      • Save ~$10,000 by May 2017
        • currently at $5,900
    • 401(k) contribution (with match)
      • Increase contribution to 25% by 2017
        • currently contributing 5% plus 3.75% employee match - 8.75%
    • Traditional IRA contributions
      • Contribute $11,000 for wife and I by 2017
        • currently $0
    • HSA contributions (with match)
      • Maximize HSA $6750 by 2017
        • currently $2050/year + $1000 employee match
    • Taxable Brokerage Account
      • Increase balance to $5,000 by 2017
        • currently $0
And then I have events that I haven't quite tied into my 10 year retirement journey. 

  1. $100,000 in liquid assets
  2. $1800/month in rental income
  3. $1500/month in investment income
  4. $250,000 in liquid assets
  5. $500,000 in liquid assets
  6. Student loans paid off
  7. Main residence paid off
  8. Rental paid off
  9. Additional rental paid off
  10. Monthly expenses met by passive income
  11. RETIRED!!!!
There you have it! Not completely comprehensive, but a good place to start. I hope to update this as I make more progress. I hope you keep me accountable. ;)


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