How I Am Achieving FIRE – Part I

I talked a lot in this past article about the 7 steps to achieving FIRE.  Some of you may be wondering….. does he practice what he preaches? Well, the answer for you is……… YES!

Today, I am going to discuss how I applied the 7 steps to FIRE in my own life and hope it can be used as a template for getting you started.

What I Am Doing

Raising a family, keeping the lights on, paying for my wife’s 2nd degree, and oh by the way, saving for retirement…… that’s A LOT to manage on a single-income household.

But we are doing it! 😊

As of this writing, my wife has graduated with a BSN RN in nursing, and we will start the transition from a single to a dual-income household! Woo Hoo!

I’ve been juggling a lot the last 2 years. Not only was I bringing home the bacon, but I was the primary caregiver for our children while she literally locked herself in our office for the last 2 years buried in her studies.


Juggling Alot

On top of all that, I started this blog to reach out to all you fine people and talk about our journey to financial independence.

Hard to believe that the last 2 years have flown by so fast. Thrown in COVID quarantines and home schooling and I’ve been a busy boy! LOL 😊

Now that the next phase of our life is in sight, it’s time to start thinking about our journey to financial independence.

From the previous article, here are the 7 steps to FIRE we are following:

  • Make A Promise To Yourself
  • Set A Goal of Developing Good Habits
  • Build A Plan
  • Create A Budget
  • Control Lifestyle
  • Increase Cashflow
  • Accelerate Savings

Let’s go through each one and explain what we are doing.

Make A Promise To Yourself

As we talked about previously, making a promise to yourself is the 1st step on the road to FIRE. Intuitively and from what the “experts” tell us, making goals should be the 1st step…… I disagree.

There are a few problems with relying on goal setting. For starters, the problem with goals is that people tend to set goals that are not easily attainable. Goals are good to have and are essential for success, but if the goal is rather ambitious, a person can set themselves up for failure. A quick way to fix the problem is to simply change the goals. The problem with this is that the outcomes move as well.

Another downside of goals is that goals are easy to break or deviate from. Goals lack the accountability needed to achieve success.

Lastly, a goal is simply a way to measure both progress and success. Put another way, a goal measures how to get from Point A to Point B. It is a checkpoint along the path of success not the end goal.

On the other hand, a promise is much more powerful than a goal and harder to walk away from. Making a promise to yourself is essentially committing yourself to achieve the desired result.

From this commitment, integrity and goals are created that will be used to outline the plan for achieving this commitment. If the plan falters or needs modifications, that’s ok because the underlying promise is still there. The only thing changing is the plan for achievement not the underlying promise. This is a constant.

The promise we made was to achieve financial independence and to be personal debt-free within 10 years. That’s it. We kept it simple and to the point. No matter the goals or plan created, the underlying promise remains constant.

Set A Goal of Developing Good Habits

Using the promise as a foundation to keep your eye on the prize, implementing a goal of developing good habits ensures you meet the intent of the promise.

Developing a goal of creating good financial habits has several benefits. The underlying success driver is habits. Practiced over time, habits will eventually become automatic. Like brushing your teeth twice a day, good financial habits enable the achievement of a positive financial mindset and the promises a person makes.

Achieving Financial Freedom

A habit we decided to enact is to talk about finances and mutual financial goals. Often, we were on different financial pages. Money conversations were far from smooth sailing. We had to push through the discomfort and work on listening to each other’s needs.

By listening to each other’s needs, we discovered that it leads to agreement on mutual promises and objectives. We started rowing in the same direction and using our combined energy to achieve the desired result.

Another habit I started was educating myself.

I was raised by parents who grew up during the Great Depression. While they were good savers, they had a scarcity mindset and when things went south, they did without. My family didn’t talk about finances. My parents knew nothing about personal finance and how to evaluate a business. I had to find ways to change that.

 I started reading every book and blog article I could find on personal finance. I spent hours pouring over information trying to figure out how to evaluate a business and find good deals. I learned about setting up various income streams to minimize risk.  I learned how to estimate retirement expenses, set a budget, and figure out how much I needed to retire.

If looking for great resources to learn how to invest, try the following:

Stock Market Investing: Rule 1 Investing, Motley Fool, and Financial Mentor

Real Estate: Fundrise, Bigger Pockets

Crypto: Token Metrics

Basic Personal Finance: Robert Kiyosaki’s book, “Rich Dad, Poor Dad”, ESI Money, and M1 Finance

How to Start A Side Hustle: I Like To Dabble

Build A Plan

While building my financial skills and developing good financial habits, I also started building a plan. The 7 steps don’t have to be done sequentially; some can be done in parallel. I chose to build the plan in parallel with developing good habits.

Build A Plan To FIRE

The reason I did this was because during my journey, I started asking myself the question, “what does my retirement look like”? Asking this question led me to start developing the plan to achieve my ideal retirement.

I then followed advice from a childhood friend to write a bucket list. A bucket list gives you something to strive for. When you check an item off that list, you feel a sense of accomplishment and inspiration to keep checking items off that list.

My ideal retirement looks like this. I get to travel to all the places I dreamed of seeing like Australia, Hawaii, and Egypt. I wanted to see the Great Pyramids, to hunt on an African Safari, and to fish and surf on the Great Barrier Reef.

I work if I choose to and on projects that interest me. I even thought about starting my own company because, quite frankly, I always wanted to.

Finally, I will get to spend a lot of time with my children and grandchildren. I grew up in a much older household and never knew my grandparents. I don’t want to repeat that on my grandchildren.

For me, here is my plan to achieve my dream retirement.

Year 1:

We have 4 main goals the 1st year of our journey. Retirement is our 1st and top priority. We plan to use my wife’s income to max out our 401K’s and start a Roth IRA for each of us. We’ll live on my income like we have for the last 15+ years and keep expenses constant.

Next, we’ll focus on paying off the remaining credit card debt left (should take 2 months).

Once the credit card debt is paid off, we’ll focus on rebuilding our emergency fund. Once the fund is back to 6 months of expenses (should take us about 4-5 months), we’ll then focus on accelerated bill payment.

I used Garret Gunderson’s Cash Flow Index method to force rank the debt payoff in order to minimize how long it takes to do so and to maximize the extra cashflow being generated.

Then we will focus on paying off my wife’s student loans from her 1st bachelor’s degree.

Lastly in year 1, I plan to learn how to value invest in great companies at a fair value. I’ll explain why later.

Year 2:

We will finish paying off my wife’s student loans. It should take us most of the year to do so. We’ll keep maxing out the 401K’s and now will also max out the Roth IRA’s too.

I plan to also keep growing my financial knowledge by learning how to invest in real estate.

After 2 years, we should be close to what’s coming next…….

Year 3:

Now that some the major debts anchoring us down have been paid off, our 401K’s / Roth IRA’s are maxed out, and finally a cushy emergency fund is created to get us through any rough patches, it’s time to accelerate growing our net worth.

We’ll use a 30/70 debt payoff to investing ratio. In other words, 30% of my wife’s income will go to accelerate paying down the remaining debts and 70% of her remaining income will go to accelerating our net worth.

With this investment money, half will go towards stock purchases and half will go towards real estate investing. For stock purchases, I’ll focus on value investing. I plan to buy great companies at a fair price and leaning towards ones that pay out a dividend. We’ll also use the dividend in the future as an income stream.

For real estate investing, I plan to start small by investing in an online real estate platform like Fundrise, Roofstock, or Diversyfund. I am currently leaning toward Fundrise. As I have been following them the past 3 years, I like their philosophy and results plus I can start for as little as $500. I also can setup several types of plans that can be used to maximize appreciation, maximize dividends, or a mix of both.

If you notice, I’m planning to invest in things that potentially can generate income. As part of our plan, we plan to generate at least $5,000 per month in passive income in the next 10 years.

By this time, my girls will be entering college and I can use this money to pay their college tuition. After they graduate, we can use this passive income to either live off of or use it to keep investing in more assets.

Also, our expenses estimate 10 years from now is roughly $5,000 per month so this will also help achieve our promise of financial independence in 10 years. Our definition of financial independence is that expenses equal passive income and we’ll have achieved that.

Years 4 through 7:

We plan is to keep doing much of the same as year 3.

The only major change might be how much goes toward accelerating debt payments. If my calculations are correct and based on current salary assumptions, we should have all the debts paid off sometime around year 7 or 8 of the plan.

Achieving FIRE

If all goes well and by the end of year 7, all my wife’s income will go towards increasing our net worth.

By year 7, we have been considering buying physical rental properties. By this time, we will have most if not all debt paid off and can focus our mortgage budget to buying rental properties and generating more passive income.

We have decided that we don’t want to be property managers since we want the time to enjoy our life. To compensate, we plan to hire a realtor who is also a property manager. That way they have skin in the game.

Years 8 through 10:

We plan to keep doing much of the same as year 7. Ideally by the end of year 10, we plan to have at least 4 rental properties (buy 1 property every 12-18 months). Our goal will be to payoff those rental properties as quickly as possible so passive income can be maximized.

If the rentals are not paid off, oh well! We’ll have our main house and all our personal debt paid off so if we must absorb the rental income debt for awhile that is ok. So long as we are generating passive income and having someone else pay off the mortgage, we’ll be ok!

Remember, our promise was to be financially independent and personal debt-free in the next 10 years. If all goes well, we’ll keep that promise.

But wait, how did we figure out how much passive income was needed 10 years from now? Well, we created a budget! Which brings us to step#4.

Next Time……

We’ll finish our 7-step plan to achieve FIRE in the next 10 years.

Until next time……..

Live The Life You Love, Want, And Deserve