Style Switcher

Predefined Colors

Early Retirement Success Story – How He Saved 12 Crores in His 30s | Fix Your Finance Ep 36

If you want to retire early, then this video
is for you. Today we'll meet a man who has a corpus of
more than 10 crores and has managed to retire completely before
the age of 40. We will learn how to start planning, how to
do the calculations for early retirement and what all things to keep in mind before
leaving your job. So watch this video till the end and to support
our channel, like the video right now. FIX YOUR FINANCE Hello and welcome to a new episode of Fix
Your Finance. Today I have Ravi Handa with me. Welcome to the show Ravi. Glad to be here. How's early retirement treating you? It has its good parts obviously. What are the good parts? You can spend time on things which you were
not able to do earlier. And what are some of the bad parts of retiring
early? You lose a lot of value and a lot of validation
that you used to get from a job.

You have described your retired life in 2023. Let's take it back to like 15-16 years back. So, what did you study? I have done engineering in computer science. And what was your first job? Where did you start working? I started working in the education sector
itself. I joined IMS Calcutta which is a CAT coaching
company. Okay. And what was your first paycheck? 25,000 odd rupees. When you retired in 2022, what were you doing
back then? Actually, before that, I used to run a business
from 2012 to 2021. Which was in the education sector. My company was acquired by Unacademy. So, the last 1-1.5 years of my working career, I was with Unacademy as director content sales. So, how many years did you work? I worked from 2006 to 2010. Then I took a year break. 2011 is when I got married. 2011 is when I joined this IT company called
Mindtical. What was the trigger to start your own thing? When I was working for IMS, at that point of time itself, I started making educational videos on YouTube
around 2008.

Gradually, they became popular. Not very popular. And this was CAT coaching for MBA? CAT coaching. First, I started with math. Then I went to GK through math. Then to LRDI, then to English. I kept on expanding. And how was the business? How did it work? Business was profitable from day one. Because there was no expense. Yes. In today's date, the cost of videos or ads
in EdTech has gone astronomically.

In 2012, it was extremely simple. Because I don't think anyone was doing it. Or even if anyone was doing it, they were not such a big player that you cannot
really compete. On an average, what was the kind of profits
or salary that you guys were drawing? We had good years when we did revenues of
3 crores as well. We had bad years when we did revenues of 25
lakhs as well. There was massive fluctuation. In 2021, your company got acquired. Correct. It got acquired and then there was that vesting
period wherein you had to work. Correct. And after that, you got an exit. Correct. So, were you actively looking for an exit? Yes. Again, I am telling you the same. So, during the COVID period of 2020, my wife was pregnant at that point of time, So, my wife and I used to sit and chat about
what to do with life. And this is what emerged that we have to sell the business at whatever valuation possible, whatever sort
of deal you get. Because getting out of business is the priority. After selling the company, there will be a
vesting period wherein you were working with Unacademy.

Correct. What was your compensation then? Exact numbers I can't reveal because of the
NDA. But my salary was a little above 1 cr. And the ESOPs of the vesting, that was another additional 50 lakhs or a
little more than that. Wow! So, you have a lot of money in Edtech, I am
guessing. Yes. But I didn't get this for my skill or my talent. Okay. This I got primarily because they were acquiring
my company and this is a way for them to pay out the
money slowly rather than on day one. What is your background? Which college did you study in? IIT Kharagpur. Did that also help in your, you know, starting your entrepreneurial journey? Absolutely. I am telling you, there are a few things which have helped me a lot in life. To take risks, to experiment. One, my parents were always independent. I have never had to give a single rupee to
my parents. The second thing which has really helped me
is my wife was very well educated and in a very good
job which allowed me to take a lot of risks.

The third is that I went to a good college and through that college, you build a network. I have friends in senior positions in multiple
places. This is it. You are the sum of your privilege, your background and the people that you have interacted with over your life. Okay, so now we will talk about your expenses. Do you live in a rented apartment or is it
an owned? It's an owned flat. I shifted to Jaipur in 2015 to be closer to
my parents and at that point of time, I purchased the
flat that I still live in today.

Did you take it on loan or did you pay in
cash? No, it was entirely in cash because at that
point of time, I had been doing business for 2-3 years. The second thing is your travel. So, do you have a car or do you travel in
cabs? I have a car but I don't really like to drive
that much. So, how much fuel do you spend on a monthly
basis? I have no idea. So, you don't track expenses in general? That way, no. So, The way I track expenses is at the beginning
of the financial year, I check how much money was in the bank account. Throughout the year, I just find out how much
money went out of your bank account. So, that's how I determine how much I spent
this year. So, on an annual basis, how much did you spend
in the last 3 years? Around 2 lakh rupees goes into maintenance. Society, maintenance plus the other property
that I own.

5-7 lakh rupees is the vacation. Another 2-3 lakhs would be eating out, drinking,
parties. Parties, not the pub parties. Parents' 50th anniversary, the first birthday
of the child. So, all these parties add up. 3 lakhs or a little more than that would go
towards the house help staff. These are the big hits. Now, it is time for the main thing, which is talking about your financial independence
and retirement plans. The first and main thing is figuring out your
FIRE number. How much money would I need to not work and can retire comfortably. So, in which year did you seriously start
thinking about FIRE? Which year? Covid, 2020. 2020 is when I actually sat down and did the
numbers.

Where I have this much money, I will put this
money here and there. So, it took me around 3 months, maybe 6 months to figure out how much money I exactly need,
how do I need to invest it. And then it took me a couple of years, 3 years
to execute that. So, if your annual expense is 25 lakhs, if you take a multiple of 30, it is 7.5 cr. Right? So, what are some of the milestones that you
took into account? There are two major chunks that I have kept.

One of them is nearly everyone likes and accepts
that you have to save money for your child's higher
education. So, I have earmarked 50 lakh rupees for that. Wow! I will give it to him at 18 or whatever appropriate
age. 7.5 Cr plus 50L. For this? Yes. 8 cr. Another 50L is what I wanted to keep as a
sort of play money for experiments that I would want to do. Angel investing is one of them. Crypto investments is one of them. I am doing a podcast right now, so it has
its own expenses. Yeah. You should check out his YouTube channel,
okay? Every month, two videos come up specifically
talking about how to achieve FIRE. Okay? There is a link in the description.

Definitely subscribe. That is 50 lakhs, your play money. How is that going by the way? Angel investments and other investments? I have lost a lot of money in angel investments. I have lost a little bit of money in crypto
as well. But the biggest problem in angel investments
is that it is extremely illiquid. There is no honesty. So, I had put 3 lakh rupees in a company in
2019. In 2021, it became 45 lakh rupees. Ravi Handa is happy that it is done. Did you get an exit? Exit? The company closed in 2023. It became zero. Oh shit. So, that is the problem with angel investment. That's why you have allocated an amount which you yourself have called play money. Correct. Any other milestones that you have covered? No, these two. 8.5 cr was your FIRE number. You said that you started investing a huge
amount since 2015. You started investing or saving more.

From 2006 to 2015, did you manage to save any portion of your
salary? Yes, we were always saving more than 50-60%. We used to save this much. So, it was business, revenue was high, that's
why you didn't save. It was something which was there. Your expenses were always lower than what
you were earning. So, have you accumulated the 8.5 cr ? A little bit more than that. Very nice. How much percentage of that, if you are comfortable
sharing, how much percentage has come from selling
your company and how much percentage of the proportion
has come from your savings? I would say that selling the company probably
gave me 20-25%. Which basically means that this was not a
result of a certain event. No, no. So, this was because my business was successful. The second factor was that my expenses were
very low. The third factor was that I always had substantial
investment in equity. The fourth factor is where I would say the
selling of the company comes in. The main money that was made was made by business. And let's say if you were doing your software
job, you would have been in the top positions, In that case, do you think this much wealth
accumulation would have been possible? If I was in India, then no.

If I had gone abroad, then I would have been
way ahead of this. Is that one of those things that you would,
you know, you look back and want to change? I regret it every week. If I had been a good student, if I had studied
in college, then I wouldn't have been in the coaching
line. I would have moved to the US or Canada or
Europe or somewhere after college. I can't believe that you are saying that you are not content with what you have achieved
financially. I am absolutely content with what I have achieved.

Because I have bounced back from the mistakes
of not studying in college. Yeah. The 8.5 cr that you have accumulated, that too, what are the percentages where you
have invested? My current net worth would be somewhere between
12-13 cr. Out of this, 1-1.5 crore rupees, which is
my 4-5 years of expenses, I keep it in absolutely liquid low risk investments. So, this is my cash bucket. In the medium term bucket, I have taken a
balance advantage fund. I have long term bonds, gilt funds, which is another 4-5 years of expenses. So, a mix of equity and debt. Third bucket, which is my long term bucket, another, I believe, 6-7 crores would be in
that and then there is a piece of land that I own
which is around 2 cr. Tell me one thing, how to go about it? Primarily if you are young you need to save,
develop as a habit sort of a thing but your focus should be on making money.

Where will you earn money from? Either you will grow in a job or you will
join risky jobs like startups to get ESOPs or you leave the country, you go abroad you
earn a lot more there, you save a lot more there and you come
back and you know you can be in a very good situation or what you do is you get a higher
degree. Suppose you have done engineering, MBA, Masters
in Engineering, there are plenty of avenues. Your main focus should be on making more and
more and more money. Because after one point your expenses can't
get less. So if you want to increase the alpha, the
difference in income and expenses that will only happen if you are constantly focusing on increasing
the top line. Let's say I have decided that I want to retire
early. What was the framework? What were some of the thought processes? One according to me even hoping for planning
for early retirement is sort of accepting a failure that you couldn't make your career
in your life better that's why you are going towards retirement.

Yes financial independence is important, early
retirement is not. If you are in a job that you like, that you
enjoy or I will say if you are in a job or in a career that you don't hate, do not think
about early retirement. Early retirement became important for me because
I wasn't liking what I was doing. So this is our quick finance round. You have to answer the questions as soon as
possible. If you had an unlimited budget, what would
you gift your wife? Vacation, luxury vacation. If money was out of consideration which in
your case holds true, what would you do for a living? I don't know I will keep experimenting with
it which is what I am doing right now.

And the last question is for people who want
to achieve financial independence and you know are seeking early retirement, what are
2-3 nuggets of advice that you would share with them? For financial independence, increasing your
income as much as possible that should be your priority. The second priority should be that bulk of
your savings should go into equity. If you are chasing early retirement, I think
that is a bad chase to have. That should be, that is like surgery, that
should be the last option. Try changing your job, try changing the city
you work in, try changing the country you work in, try changing your careers. If there is no avenue, that is when you think
about early retirement. Alright, that brings us to the end of the
episode. Thank you so much for sharing your journey. I am sure that a lot of people have learnt
a lot from today's episode and video.

Make sure to check out his YouTube channel. Every month at least 2-3 videos are made on
this topic. Subscribe to his channel and if you liked
anything in this video, subscribe to my channel as well. Goodbye..

As found on YouTube

Retirement Planning Home

Read More

How we Retired at 40..đź’°7 tips to succeed for Early Retirementđź’°

hey guys retired at 40 I'm going on a
little road trip today just me and Murph and last week I reached a milestone on
my channel and I hit a million views total and 10,000 subscribers in the same
week since I've been getting requests for quite a long time about how I
retired at 40 and I'm on a long road trip right now I figured what better
time to share the story so without further ado here's the retired at 40
story so before I get started I want to say that this is not in any way a brag
story in fact I'm definitely not a showy type guy I enjoy very simple things in
life and money to me is more of just a vehicle to be able to retire young and
have my family live a comfortable and an easy life and to be able to enjoy lots
of life experiences and be comfortable in life before I'm old and gray so
really the journey began in about 2002 graduated from Iowa State University
with a degree in marketing and business and by that point I have met my wife
Kelly she had already graduated from school and she was kind of waiting for
me and we wanted to move west out of the Midwest to move west see some new
territory and get closer to the outdoors so I grabbed my degree ran out the door
packed up my 1987 Ranger fully equipped with eight foot hay racks full of all of
my personal belongings and we drove to Littleton Colorado and at this point in
my life I had $200 in my pocket and Kelly had about the same so being
completely naive and basically completely broke but with a degree I was on the search for the best suit and tie job that I could possibly find
so I bounced around for a couple months just working some kind of halfway jobs
and I quickly realized that I did not want to wear a suit and tie and I wanted
nothing to do with the man and working a nine-to-five job well Kelly had found a
job in a real estate office working the front desk and she had become friends
with a couple of the big-time Realtors there one of which you caught wind that
I had some handyman type skills but he made me a deal that if he paid cash for
a house and I fixed it up that he would split the profit with us 50/50 and at
this point in my life all I saw was dollar signs if I was completely blown
away that there was someone that could pay cash for a house
this is coming from a guy who had less than $200 in his pocket at this point it
was pretty much scraping by I tried to hold back my excitement to him but
naturally I said yes please let's do that I was working the graveyard shift
at Target stocking shelves I'd worked for 10 hours I would go home grab a
little bit of breakfast and I'd head over to the property and work on it for
another five or six hours I try and catch a few hours of sleep and then I
would rinse and repeat it was at this point in my life that I learned a few
different things one you really have to dig deep to reach your goals in life
because I was not getting paid by the hour and at this point I didn't know how
much money I was gonna make I didn't know if I would make $500 when this was
all done or if I was going to make $5,000 when this is all done so I
learned that a lot of things that can benefit you financially you have to put
in the work upfront without knowing what your final outcome is going to be
after about three months which seemed like an eternity of working seven days a
week for sometimes 15 sometimes 20 hours a day on this house the house was ready
to go on the market and it was all finished it looked great and then before
you knew it it's sold and then the house closed and at this
point I still didn't know what we were gonna make off it but for me it didn't
matter the hard part was done I didn't have any of my own money into it I just
had my time basically so the guy we were doing the investment with hands me an
envelope and I opened it up and at $8,000 being twenty-two years old and having
$8,000 I might as well have hit the lottery and that brings me to my second
valuable lesson that I learned and that is being responsible with money so when you have $8,000 and you're 22
years old a lot of people would go buy a new car they'd go buy some flashy
things some pretty things but to me I had realized that if I can make $8,000
once I can make $8,000 again and again and again and again so I can either go
p*&% the $8,000 away that I had worked my a#* off for or I can take that $8,000 and do exactly
what he did but do it myself and potentially make twice or three times as
much money so my wife being in a real estate office we became acquainted with
quite a few smart people financially smart people we learned a lot about real
estate very quickly because we were willing to learn which is my next
valuable life lesson is that you never stop learning so we
took our $8,000 we put a small down payment on a condo in Littleton
because we realized that giving someone else our money was you might as well be
throwing it away we wanted to be working towards something and it own something
on our own so we took our other four or five thousand dollars and we started our
search for a real estate investment that we could do all of our all on her own
and get a hundred percent of the profits so after some searching we did find a
place we found a small town home it was not in as nice of area as we were living
it was smaller it needed lots of work but that takes us to our next light life
lesson that we learned and that is to sacrifice for a greater payoff in the
future so we had only lived in our condo for a very short time but we realized
that if we moved into the real estate investment that we could rent out the
place that we are living at and move into the place that we were fixing up
that we'd have to be paying a mortgage on anyway we had our first real estate
investment and we had our first rental so being 22 years old and owning two
properties and carrying two mortgages and at this point I'm still working at
Target was a pretty scary proposition in life but all I could see was that $8,000
check they had started to change our lives I also want to point out and kind
of give a shout-out to my parents and to my wife's parents because
neither one of our parents ever handed us anything in life they
always made us work for what we achieved in fact when we move we tried to
convince my parents to co-sign on our mortgage for the condo that we bought
and they said no way at the time I was very very mad at them and I thought I
would never forgive them in hindsight it was one of the best
things they've ever done for me because it just made me have that fire
in my belly and really just want to work to get what I wanted so back to having
two mortgages that was a completely scary thing in my life I was making
something like 10 dollars an hour at Target
I think Kelly was making $13 an hour at the real estate office she was working
at we could barely afford the condo we had but now he had two.

God bless the
banks lending money to anyone at that point on the very plus side of that we
learned that someone else can pay our mortgage and we're basically getting
that money for free and then later we figured out that there are many many
many tax benefits and huge benefits of owning a rental property so we quickly learned that trying to pay
for materials and the things needed to fix up an investment property on just
barely over minimum wage is not easy to do the thing that happened next couldn't
have come at a more perfect time so all of a sudden I had money to spend to fix
up this house and it would just get me to that next
big paycheck that much quicker so that's what we did we fixed up the house we
doubled our money we rolled it into the next one so we kept bouncing from house
to house quite a few times and that sacrifice of from going from a nice
house to live in to going to a crappy house to live in to fix up to making it
nice again to going to another crappy house to fix up it became pretty
stressful but we always had our eyes on the prize "are you still with me Murph?"
after doing this two or three times I remember getting a check for the last
one and the check was forty one thousand dollars
so at that point it didn't make sense to work at Target anymore so I just started
doing it full-time but we never took the big proceeds from the real estate and
put it into our actual living we always rolled it into the next property and
that kind of gave us the baseline of even how we live today we always live
well below our means we take the money that we make and we put it into things
that will make us an income not into something that will lose us money but
you do have to treat yourself every once in a while otherwise there's no reason
to make the money in the first place Kelly saw many of the high producing
Realtors making large amounts of money so she decided to get a real estate
license and she created her own real estate business so now we really felt
like we had the world by the balls because we were getting paid a
commission to buy the property and then we were saving half of the Commission
when we sold the property and I was fixing him up so we just get rolling our
profits in rolling our profits in rolling our profits in until family we
were able to buy a house and now that we could get a house we were playing with
the big boys the profits were much larger but so was the risk and we really
didn't want to lose all the way it worked for for the last couple of years
so we did a few houses and we made some great money but instead of selling them
and pulling out our profits we kept them as rentals and it was at this point that we really
started building up our rental inventory at this point it was about 2006 or 2007
and real estate was starting to slow down a little bit but we have purchased
a large house I'm a courage that was really a big risk for us it was a large
house to fix up it was our biggest project for sure it took us the most
money to fix it up and we had the most money into it so we lived in this house
for about 8 months while we were fixing it up and we kind of decided after doing
about 12 properties that the moving all the time was starting to get kind of old
and we were kind of getting older ourselves and we decided that we wanted
to have kids and kind of settle down a little bit Murph are you with me? sometimes I feel like I'm just talking to myself so after the eight months was up we
finished the house we sold it and shortly after the real estate market
completely crashed the bubble had burst and Colorado was one of the hardest hit
States we got out of the house just in the nick of time and not only did the
real-estate market bubble burst we found out that we couldn't have kids and it
seemed like a real low point in our lives but around 2007 when all this
happened we realized our next lesson with every negative there is a big
positive that can be gained from it and you can just use it as fuel for your
fire so the recession was tough we thought
our great life had come to an end we thought we were gonna have to get
regular jobs you know people were losing their jobs left and right people were
losing their houses Colorado was hit very very hard one of the worst states
during the recession and we learned that what goes up must come down
and in this case it came down hard in many cases not just real estate when
things are bad that's the time to invest and if you're smart with your money and
you've been saving while everyone else spending that's the time to benefit
though from about 2008 to 2012 we were buying rentals so we were able to adapt I started doing
contracting because that's pretty much what I was doing before but now I had to
be doing work for someone else and Kelly's always been a mover and a shaker
and even a bad real estate market she was able to keep her business moving we
were buying things for pennies on a dollar and even though we were not
making great money and in some cases losing a little bit of money on rentals
we were able to stick it out and after lots of lots of years of lots of lots of
heartache and lots of lots of doctors we were able to have two boys so about 2014/2015 real estate started
creeping back up again prices kept going through the roof and just when he
thought it was the peak they just kept going up stuff was flying off the
shelves you could list a house and it would have multiple offers within 24
hours so we had about age 35 we were
completely debt-free we had several rentals that we were cash flowing we
didn't owe any money on the rentals so all that money was just rolling into a
bank account when you have no bills and you have an income coming in your net
worth starts to grow very quickly so we rode out the storm Kelly's business was
doing great my contracting business was doing great
we have liquidated a lot of our real estate in Colorado we had capital to
play with we had two beautiful young boys and then I fell to my knees crying
like a little baby I had herniated a disc in my back and I
was on a walker for about a month contracting for me was out of the
question I didn't even want to think about picking something up so I took
some time off and I raised our kids which at first I thought would just be for a few
months and then a year passed and then another year passed and I decided that I
kind of liked it we had rental income coming in Kelley's business was doing
better than it had ever been in fact she had started her own she had several
people working for her and just as a little side income I got to do what I
love to do which is antiques I was just buying and selling antiques so we were
trying to be very strategic at this point because we owned a fair amount of
property in Colorado but we knew that our ultimate goal was to retire at 40
and at the rate things were going up we didn't want to sell too early because we
didn't want to miss out on that upside but we didn't want to sell too late
because we didn't want to risk the chance of taking a step back so as some
regret we sold the majority of our properties in around 2017
but this was a game-changer because we were able to make cash for every rental
that we purchased so we loaded up on rentals in Iowa we actually purchased
our property that we're going to move into which is actually where I'm headed
now and that kind of brings us up to speed
to current date I take care of our 10 rentals which keep which keeps me pretty
busy just in itself i buy and sell antiques i get to see my kids all the
time we have a good rental income coming in now we do youtube oh yeah we also do
a couple fix and flips every year Kelly has her real estate team with about 10 employees
and in June of 2020 we're going to retire at 40 so all in all life is great
I have a wonderful family I have enough assets and passive income to live a
comfortable life I don't need Ferraris and yachts to make
me happy in fact for me it's quite the opposite so if you're new to the channel
take a moment to subscribe click the bell to get notifications and new videos
we like to live life simple on this channel if you like the content we
provide give us a thumbs up I'm almost always available to answer questions and
I love hearing from you guys I'm glad you were able to enjoy my roadtrip with
me I'm just pulling into the house right now in the meantime this is retired at
40 remember to live life simple I'll catch next week

As found on YouTube

Retirement Planning Home

Read More

How Much Money You Should Have Saved At Every Age | Retirement Savings By Age

hey everyone this is lauren mack with hack in the rat race when it comes to retirement and strategies for saving for retirement people often ask how much money should i have saved at every age in order to reach my retirement goals this can be a very difficult question to answer because so much depends on one's lifestyle age in which they want to retire goals during retirement and so on in this video i'm going to talk about how much money you should have saved at every age for a typical american planning for retirement if you stay until the end of this video i am going to share with you a tip that you might be able to use in order to dramatically reduce the amount of savings you will need in retirement and possibly reduce the amount of time you'll have to work in order to get there additionally if you watch this video and think you're behind or maybe you haven't even started saving then i have created a workbook called from xero to retirement which walks you step by step through getting your finances in order and saving for retirement i'll put a link to it in the show notes below so let's jump right in the key to having enough money to live comfortably in retirement is to start saving as early as possible this means starting in your 20s most people in their 20s are just embarking on their careers whether that's freelancing in the digital economy starting a business entering a trade or finishing up college and starting a career either way people in their 20s usually have very little save for retirement and more often not can find themselves in debt due to school loans training startup costs or even entering the workforce and that is okay if you happen to be someone in your twenties who has managed to avoid debt and have money saved then congratulations you are ahead of the curve the best piece of financial advice i could give someone in their 20s is to start creating good financial habits while in your 20s because it will be a tremendous benefit throughout your life at this age there really is no specific amount that you should have saved although the more the better i usually recommend that if you're in your 20s you should at least have an emergency fund of one to two months worth of expenses saved up the reason having an emergency fund is that it can help you avoid falling into the debt trap i actually recommend that people of all ages have an emergency fund set aside that is easily accessible in cash so this is a good habit to begin early speaking of debt many people in their 20s are fresh out of school finally making some good money and it can be very tempting to rush out and finance and purchase a fancy car maybe some designer clothes or even a sweet bachelor pad but avoid the temptation to do that of course when you're just starting out there are necessities such as getting a car to get you to work or maybe suitable clothing for work however it's important to try not to live beyond your means or max out your credit cards many times when you do get your first job one of the benefits offered to employees is a company sponsored retirement account like a 401k oftentimes the company match meaning to a certain percentage the company will match the amount you put in so if the company match is 5 then if you put in 5 they will match your 5 i always recommend signing up for a corporate sponsor retirement account in my videos and i always suggest contributing at least up to what the company will match because this is like getting free money and it's considered part of your compensation package what if you work for yourself as a freelancer entrepreneur or work for a company that simply doesn't offer a retirement account then i recommend opening an ira or roth ira and contributing to the annual maximum limit ira stands for individual retirement account if you want to learn more about the difference between 401ks iras and raw diaries i created a video called roth ira versus traditional ira versus 401k i'll link to it above and in the show notes below to sum it up life in your 20s should be all about establishing good money habits make sure you have an emergency fund of at least one to two months of expenses three to six months would be ideal set up a retirement account either through an employer-sponsored 401k or your own ira or roth ira and lastly make sure to avoid the debt trap live within your means the more you can start investing early on as possible the sooner you'll be able to retire so now let's talk about your 30s by now you've most likely been in the workforce for a while and hopefully things are progressing well with your chosen occupation many experts recommend by the time you reach 30 years old you should have one year of salary saved up so for example if your annual salary is fifty thousand dollars a year then you should have fifty 000 saved up and invested this amount of savings should be in addition to the three to six months of savings that should be tucked away in your emergency fund in order to protect you from falling into the debt trap because of job loss medical bills car repair speaking of debt by the time you reach 30 you really should try to eliminate what i consider bad debt some examples of these are credit card debt car loans student loans etc paying on these types of debt each and every month prevents you from investing the difference and limits your ability to further invest and contribute to grow your nest egg as you saw in the earlier example in your 30s it can be tempting to keep up with joneses and live beyond your means many of your friends and acquaintances will take out large loans to buy an expensive home they'll borrow large sums of money in order to buy a luxury automobile in order to give the illusion of wealth avoid falling into this trap and feel tempted to compete with these people by making the same mistakes 98 of the time these wealthy people are actually highly leveraged and truly broke the best way to get out of the rat race meet your retirement goals and even retire early and wealthy is to live frugally and within your means okay so now you've reached 40 and you've managed to not succumb to the debt trap that so many people fall into in their 30s you should be more financially stable than you were in your 30s so how much should you have saved for retirement by now well most experts recommend that you have three times your annual salary saved up so for example if you make sixty thousand dollars a year you should have a hundred and eighty thousand dollars saved up and invested in addition to this should be maxing out your contributions to your retirement account that we've been talking about that is really important not only to help grow your investment but contributions to your retirement account can decrease your overall tax liability it is also a good idea at 40 to buy a house home ownership is really important because home values tend to rise over time if you buy a home at age 40 with a 30-year mortgage and make all your payments your home will be paid off by the time you're 70 and you've reached retirement therefore reducing housing expenses in retirement once your home is paid off then it becomes an asset this also gives you the option of selling it once you reach retirement downsizing paying cash for a new property that's worth less than the value of your home therefore giving you the extra cash to help you pay for your retirement another benefit of owning a home or rental properties is leverage which is the mortgage if you put twenty thousand dollars down on two hundred fifty thousand dollar house and the value rises ten percent then your returns twenty 25 000 instead a 10 return on 20 000 is 2 000 as you reach 50 years old many people are well established in their career and hopefully have managed to get a few raises over the years and are now making even more money at this point you should save around five times your annual salary so if you make sixty thousand dollars a year then you should have three hundred thousand dollars saved for retirement you should really be noticing the compound interest effects now due to all that diligent savings over the years once you turn 50 years old the irs allows you to start making catch-up contributions to your retirement accounts which means you're allowed to contribute higher limits to the annual contributions so you should be taking advantage of this in order to grow your retirement account quicker and also reduce your overall tax liability another recommendation at this age is to continue to remain debt free live frugally and continue to pay down your mortgage by age 60 now you're getting close to retirement by this age it is recommended to have seven to eight times your annual salary saved up so if you make sixty thousand dollars a year then you should have four hundred and eighty thousand dollars saved for retirement you're probably debt free now and really enjoying watching your savings and investments grow at this point it might be tempting to start dipping into your retirement savings however avoid doing this keep up the study savings pace many people are still working and earning great incomes in their 60s and can really boost their retirement accounts if they have fallen behind in the early years hopefully by now your home is either paid off or close to being paid off which should give you peace of mind as of now you should be eligible for social security benefits but you might want to put that off as long as possible to be able to receive the maximum amount of money you can go to the social security website they have a form where you can enter your information and it will give you estimates of what to expect at different ages i'll put a link to it in the show notes below you'll be able to determine at what point it makes sense to take it out and how much will be added for waiting and if you're just starting out saving for retirement and you're still relatively young don't assume you will have social security benefits when you reach your 60s or 70s many experts debate whether they'll actually be enough money to pay out those benefits in the future now for the bonus tip like i said at the beginning of this video having enough money for retirement depends mostly on your lifestyle cost of living and retirement in america however these days more and more people are choosing to retire outside the united states where the cost of living is dramatically less and they can have a much better standard of living for substantially cheaper than the us the thought of retiring abroad might sound frightening to some people and i get it but i have traveled to over 58 countries and lived all over the world and i can tell you that you might be quite surprised retiring abroad is not unusual in fact many americans choose to either retire early to stretch their retirement savings even further by joining the ever growing list of american expats who are deciding to retire abroad many countries around the world entice retirees by offering retirement visas to come spend their golden years enjoying the beaches golf courses and laid-back lifestyle in their country i personally know so many people who have chosen this option and none of them have regretted it you're probably thinking oh lauren what about the health care overseas it cannot be as good as the u.s well my husband and i have received medical care in numerous countries all over the world including emergency surgeries from countries in southeast asia south america mexico europe and i can tell you that every time we receive medical care it has been as good or better than the care we received in america and the bill was certainly much less expensive if this sounds appealing to you then take a few scouting trips to some countries where you think you may want to live and spend some time checking it out and meeting up with some expats that live there to get their impression of what it's like to retire abroad in the country that you're considering now i want to hear from you in the comments section would you like me to do a video on retiring abroad have you been considering moving abroad to retire if so where let me know in the comments below if you're watching this video and you're thinking lauren i am so far behind or i haven't even started is it too late then watch this video right here

As found on YouTube

Retirement Planning Home

Read More

5 Easy Tips To đź’°Save Moneyđź’°…Money Saving Hacks

I’m going to do a video on 5 simple things you can do to help your financial situation and I realized that I need to do a follow-up to the retired at 40 story video because there’s a huge need for financial education in this country and really everywhere it pertains to every single person doesn’t matter what your financial status is you can always use help and there’s always little tip tips and tricks that and things that you can do to better your status it always amazes me how scared people are to talk about their finances to put something on paper to basically take a look at where their money is going what’s getting saved and how everything is getting spent and I’ve met people time and time again that are highly educated very smart people but they know nothing about finances and they are terrible with money management so before we get into the 5 tips I want to strongly urge you to make a financial statement for yourself figure out where your money is going currently and figure out how much you’re saving and basically figure out where you can trim the fat for so many people a financial statement or just finances in general is like a bad word they’re just terrified of it but the only way that you’re gonna be able to improve your finances is to face the music alright so now that you’ve had a chance to go through your financial statement you definitely know where your money is going but how can we save more and what you really need to aim for is about 6 months of reserves especially if you’re getting ready to invest money into something or if you’re doing some kind of career change or some life-changing thing and all of these five tips will more than likely be a line-item on your financial statement so let’s go to financial tip number one hey I’m going to have to call you back I’m shooting a video right now so this first thing is something that we’ve all become very very accustomed to in the last 10 to 15 years and that is a cell phone and people tend to spend absurd amounts on their cell phones whether it’s the bill or the cell phone itself mainly the cell phone itself so that’s my first financial tip is shop on eBay or Amazon for a cell phone that’s refurbished or used or one this may be just a couple years old I actually just purchased a cell phone on ebay because I’m having trouble with my current one and I got on to my cell phone providers website and the most expensive phone that’s like mine now is $1,200 that’s insane to me so I got on eBay I found one that’s similar to the one I have right now it’s new but it’s a couple years old and I got it for less than $200 another thing that you can do is ask for some kind of loyalty benefit from your cell phone provider cell phone providers are constantly trying to earn your business and if you’ve been with them for a long time and you can convince them to keep you around by offering you some kind of benefit they’ll jump on the chance just by going into my provider recently I have a cell phone bill that was about a hundred and ten dollars a month I told them that I’ve been with them for close to 15 years they knocked it down to sixty-seven dollars and I have unlimited everything now tip number two is what I call going to youtube University or getting a YouTube education we live in the most amazing time ever right now there is information everywhere and it’s so easily accessible don’t ever stop educating yourself it’s so easy to find out how to do things these days you’re doing yourself a huge disservice if you don’t take advantage of that so how does that pertain to saving money well you can save money by doing tons and tons of things yourself instead of paying someone else to do it just look at the platform that you’re watching right now for instance you’re watching a video on how to do something so that how-to can be anything from changing brake pads on your car to changing the oil on your car to fixing a leaky faucet or the toilet flapper not working on your toilet all the way to how to the meal which brings me to my next point number three so food is a necessity in life but is it a necessity to go out to eat or go to Starbucks once or twice or every day the amount of money that people spend on food and going out to eat fast food Starbucks McDonald’s it really adds up quick and I don’t think that people realize how much money they’re actually spending on it because it’s just five or six or seven dollars here and there but if you add that up over the course of a month or a year or five years or ten years I think the result would be pretty staggering cook your meals at home pack your lunch for work make that fancy coffee at home it’s not that tough to do there’s so many great ideas and resources on YouTube and Pinterest and vlogs and blogs this channel included if you need a place to start scroll through my channel I have lots of cooking videos if you want to take that a step farther you can start growing your own food and if you don’t have a big green house like this you can grow a lot of food just in five gallon buckets even on a little deck if you don’t know where to get started see tip two number four is something that really hits home for me because me and my wife are both self-employed and we have been for 15 plus years so number four is insurance and although I don’t like insurance companies because I think they’re a giant scam it’s a necessary evil and you can also use that to your advantage you can put them against each other insurance companies much like cell phone companies are begging for your business and they’re constantly trying to outdo each other with with certain benefits or promotions so make them put their money where their mouth is and put them up against each other constantly and not just insurance companies you can do this with all kinds of different companies you should always be price checking these companies the ball is in your court make them earn your business all right I’d saved the best for last tip number five is taking advantage of bank account and credit card bonuses and this tip is begging for a separate video all on its own because I could go on about this for a long time but if you’re not taking advantage of credit card bonuses for sign ups or credit card cash back or travel miles or if you sign up for a bank account a lot of them will give you a large sum just for putting your money with them now I want to be clear I’m not promoting just going out and spending a bunch of money on a credit card but more putting the things that you already spend money on into the credit card it’s money that you’re spending anyways put your mortgage on a credit card if you can insurance is a good one it’s not super expensive but at least we’ll get you a couple hundred bucks on your credit card unless of course it’s health insurance and then you’re talking in my case thousand to twelve hundred dollars a month here’s another good one groceries it’s something that you always have to have and depending on how much you go to the grocery store it could add up to three or four hundred bucks a month sometimes six hundred maybe even more no-brainer here put your gas on a credit card you can always put your utilities on your credit card too if your utility company will allow it next from tip one your cell phone bill now depending on how much some of these are and if you are allowed to actually put them on your credit card you’re talking some pretty major money that you can get a bonus from if you’re getting two percent cashback that really adds up not only that but you’re increasing your credit score while you’re doing that so as long as you’re financially responsible and you pay this every month you’re reaping a large benefit a lot of credit cards will give you a 2% cashback they’ll give you a $500 signup bonus that’s free money in my opinion the free bank bonuses or even better than the credit card in my opinion because the bank account is something that you have to have anyway a lot of them will give you $500 for a small deposit as long as you put your direct deposit with them all the way up to I’ve seen $1,000 before and if you have a little bit more money to play with some of the online money market accounts like Capital One will pay you up to 2% or some even up to 2.5% just for keeping your money with them so some of these things may not seem like it’s saving you a ton of money but when you take up those extra fives and tens and occasional hundreds and you put them to work for you as opposed to something that you’re normally spending you’re not only saving the money because you’re not spending it but you’re putting it to work and doing something else with it and you’ll find that your your finances will start to collect very quickly so if you found the video helpful and you enjoyed the content take a second to give me a thumbs up it really helps out the channel and it helps the YouTube algorithm get this video out to people who actually need to see it also don’t forget to subscribe we do some gardening some frugal living some food preservation and cooking some gardening and you get to join me and my family on our retirement at the age of 40 after you’ve clicked subscribe click the bell notification also and it will notify you every time a new video comes out and it’ll keep you in the loop of the community all right I appreciate you sticking with me through this whole video so I’m gonna give you an extra bonus tip with an extra 100 or 200 or 300 or more dollars per month that you’re saving with just cutting back on a few things you take that extra money and you pay down debt with it the faster you get out of debt the closer you’re going to become to financial freedom and whenever you’re paying off debt always choose the smallest balance first because it gives you that extra little boost and if you can pay it off faster it gives you that extra bit of confidence to rock into the next one so once you’ve paid down your smallest debt move on to your next smallest debt take that money that you’re saving from the smallest debt that you’re not having to pay any more and add it to the money you’re saving from the 5 tips that I’m giving you and apply it to the next smallest debt and when that one’s paid off you roll it into the next one you roll that one into the next one and so on and so on in the meantime this is retired at 40 check out these other helpful videos if you have a minute remember to live a life simple and we’ll catch you next week oh hey I’m gonna have to call you back and shooting a video right now this is right my god get out of debt

As found on Youtube

Read More

How Much Money You Should Have Saved At Every Age | Retirement Savings By Age

hi everybody this is lauren mack with hack in the daily grind when it pertains to retirement and also methods for conserving for retired life individuals usually ask just how much cash ought to i have conserved at every age in order to reach my retired life objectives this can be a really difficult question to respond to due to the fact that a lot depends upon one'' s lifestyle age in which they intend to retire goals during retirement as well as so on in this video i'' m going to chat regarding just how much money you should have conserved at every age for a common american planning for retirement if you stay till completion of this video clip i am going to share with you a tip that you may be able to utilize in order to substantially decrease the quantity of cost savings you will certainly require in retired life and possibly decrease the amount of time you'' ll have to work in order to get there additionally if you view this video clip and assume you'' re behind or maybe you haven'' t also began conserving then i have developed a workbook called from xero to retirement which walks you step by step via obtaining your financial resources in order and also conserving for retirement i'' ll placed a web link to it in the show keeps in mind listed below so allow'' s jump right in the trick to having enough cash to live easily in retirement is to start conserving as early as possible this means starting in your 20s lots of people in their 20s are simply starting their jobs whether that'' s freelancing in the electronic economic situation starting a company going into a trade or finishing up university as well as starting a career either means people in their 20s usually have very little save for retirement and regularly not can discover themselves in debt due to institution loans educating start-up costs and even going into the workforce which is okay if you happen to be somebody in your twenties who has managed to avoid financial debt and also have cash saved after that congratulations you lead the curve the very best item of economic suggestions i could provide someone in their 20s is to start developing good financial behaviors while in your 20s due to the fact that it will be an incredible advantage throughout your life at this age there actually is no specific amount that you ought to have saved although the much more the much better i normally advise that if you'' re in your 20s you should at the very least have an emergency fund of one to two months well worth of expenses conserved up the reason having a reserve is that it can help you avoid falling into the debt trap i in fact recommend that individuals of every ages have a reserve reserved that is quickly obtainable in cash so this is a great habit to begin very early talking financial obligation several people in their 20s are fresh out of school finally making some great money and also it can be very alluring to hurry out as well as finance and buy an expensive automobile possibly some designer clothing or also a sweet bachelor pad but prevent the temptation to do that of course when you'' re simply starting out there are requirements such as getting a cars and truck to get you to function or possibly appropriate apparel for work nonetheless it'' s important to attempt not to live past your methods or max out your credit score cards lot of times when you do get your initial task among the benefits used to staff members is a company sponsored pension like a 401k often the business match suggesting to a specific percent the company will match the amount you place in so if the firm suit is 5 then if you place in 5 they will match your 5 i always recommend enrolling in a company enroller retirement account in my videos as well as i always recommend adding at the very least approximately what the firm will match because this is like getting totally free cash and it'' s considered part of your payment bundle what happens if you function for yourself as a consultant entrepreneur or help a firm that just doesn'' t supply a pension after that i suggest opening up an ira or roth ira and adding to the annual maximum restriction individual retirement account represents specific retirement account if you wish to find out more about the difference between 401ks iras and raw diaries i developed a video called roth ira versus typical ira versus 401k i'' ll link to it above and also in the show notes listed below to sum it up life in your 20s ought to be all regarding developing great money behaviors see to it you have an emergency situation fund of at the very least one to 2 months of costs three to 6 months would certainly be perfect established a retirement account either through an employer-sponsored 401k or your very own individual retirement account or roth individual retirement account and finally ensure to stay clear of the financial obligation trap live within your ways the more you can start investing early on as feasible the faster you'' ll be able to retire so currently let ' s discuss your 30s now you'' ve more than likely remained in the workforce for some time and also with any luck points are proceeding well with your picked profession lots of experts suggest by the time you reach thirty years old you must have one year of salary saved up so for example if your yearly income is fifty thousand bucks a year then you must have fifty 000 saved up as well as invested this amount of financial savings should remain in addition to the 3 to 6 months of savings that need to be stashed in your reserve in order to safeguard you from dropping into the financial debt catch since of job loss clinical costs automobile repair service talking financial debt by the time you reach 30 you really ought to attempt to eliminate what i think about uncollectable loan some instances of these are credit report card financial obligation cars and truck loans student finances and so on paying on these kinds of debt every month stops you from spending the difference and limits your capability to additional invest and add to expand your nest egg as you saw in the earlier instance in your 30s it can be tempting to stay up to date with joneses and also live past your methods most of your friends and acquaintances will secure huge lendings to get an expensive home they'' ll obtain large amounts of money in order to purchase a luxury automobile in order to give the illusion of riches stay clear of falling into this catch and also feel attracted to take on these individuals by making the same blunders 98 of the time these rich people are in fact highly leveraged and truly damaged the very best method to obtain out of the daily grind fulfill your retired life objectives as well as also retire early and rich is to live frugally and within your methods fine so currently you'' ve got to 40 and also you ' ve handled to not surrender to the debt catch that many people fall right into in their 30s you must be extra monetarily secure than you remained in your 30s so just how much ought to you have saved for retirement now well most professionals advise that you have three times your yearly wage conserved up so for instance if you make sixty thousand dollars a year you should have a hundred and eighty thousand dollars conserved up and purchased addition to this must be maxing out your payments to your pension that we'' ve been chatting regarding that is truly crucial not just to assist grow your financial investment but payments to your pension can lower your general tax obligation obligation it is also a great concept at 40 to acquire a house residence possession is actually vital since house values tend to increase in time if you purchase a house at age 40 with a 30-year home loan as well as make all your payments your residence will be settled by the time you'' re 70 as well as you ' ve reached retirement therefore reducing real estate costs in retired life as soon as your residence is settled then it becomes a possession this also gives you the alternative of marketing it once you reach retirement downsizing paying money for a brand-new residential or commercial property that'' s worth much less than the value of your residence for that reason offering you the extra cash to help you pay for your retired life an additional benefit of having a residence or rental residential properties is leverage which is the mortgage if you place twenty thousand dollars down on 2 hundred fifty thousand buck home as well as the value increases ten percent after that your returns twenty 25 000 instead a 10 return on 20 000 is 2 000 as you reach half a century old many individuals are well established in their job as well as ideally have procured a few elevates throughout the years and also are currently making also more money at this moment you must save around five times your yearly wage so if you make sixty thousand bucks a year after that you need to have three hundred thousand dollars saved for retirement you ought to truly be noticing the substance passion effects now because of all that persistent cost savings throughout the years when you turn 50 years old the irs allows you to start making catch-up contributions to your retirement accounts which implies you'' re enabled to contribute greater limitations to the yearly contributions so you must be making use of this in order to grow your retirement account quicker and likewise minimize your general tax obligation liability one more suggestion at this age is to remain to continue to be financial debt free real-time frugally and also remain to pay down your mortgage by age 60 now you'' re obtaining near retired life by this age it is suggested to have seven to 8 times your annual salary saved up so if you make sixty thousand bucks a year then you should have 4 hundred and also eighty thousand dollars saved for retirement you'' re most likely financial obligation complimentary currently and actually appreciating viewing your cost savings as well as financial investments expand at this factor it could be alluring to begin dipping right into your retirement cost savings nonetheless avoid doing this maintain up the research study savings pace many individuals are still working as well as gaining excellent earnings in their 60s and can truly improve their pension if they have actually fallen back in the early years with any luck now your home is either settled or near to being paid off which should give you peace of mind as of currently you ought to be qualified for social security advantages however you could intend to place that off as long as possible to be able to get the maximum amount of cash you can go to the social security website they have a kind where you can enter your details as well as it will certainly provide you estimates of what to expect at different ages i'' ll put a link to it in the program keeps in mind listed below you'' ll be able to establish at what factor it makes sense to take it out as well as just how much will be added for waiting as well as if you'' re just starting saving for retired life and also you'' re still reasonably young don'' t assume you will have social protection advantages when you reach your 60s or 70s numerous experts dispute whether they'' ll in fact be sufficient cash to pay out those benefits in the future now for the benefit pointer like i stated at the beginning of this video having sufficient cash for retirement depends mostly on your way of living cost of living and also retirement in america nonetheless these days a growing number of individuals are selecting to retire outside the united states where the expense of living is considerably much less as well as they can have a better criterion of living for considerably more affordable than the us the idea of retiring abroad could appear frightening to some people and also i obtain it however i have traveled to over 58 countries and also lived throughout the globe and i can tell you that you may be fairly stunned retiring abroad is not uncommon in reality many americans choose to either retire very early to stretch their retired life savings even further by joining the ever before expanding list of american expats who are deciding to retire abroad lots of countries worldwide tempt senior citizens by providing retired life visas to come invest their gold years delighting in the beaches golf links and also laid-back way of life in their nation i directly know many people that have actually selected this option as well as none of them have actually regretted it you'' re most likely assuming oh lauren what about the healthcare overseas it can not be just as good as the u.s well my spouse as well as i have received treatment in numerous countries all over the world consisting of emergency situation surgeries from countries in southeast asia south america mexico europe as well as i can tell you that every time we receive healthcare it has actually been as good or much better than the care we received in america as well as the costs was definitely much more economical if this seems enticing to you after that take a couple of hunting journeys to some nations where you think you may intend to live as well as invest time inspecting it out and fulfilling up with some expats that live there to obtain their perception of what it'' s like to retire abroad in the nation that you'' re taking into consideration currently i want to learn through you in the remarks section would you like me to do a video on retiring abroad have you been considering moving abroad to retire if so where let me know in the comments listed below if you'' re watching this video clip as well as you'' re assuming lauren i am so much behind or i haven'' t even started is it too late after that watch this video clip right here

As found on YouTube

Retirement Planning Home

Read More

Our $3.7 Million Fat FIRE Strategy | New Investment Strategy to Retire Early by 45

In september 2021, i published a video about our fat fire strategy in the amount of 2 8 million dollars and that video is still by far the best performing video, and it was like the 15th video i’ve ever made for this channel with less than 150 subscribers, our fat fire strategy, became the core of my youtube channel here at fireside chat and that video had a complete breakdown of our fire expenses like housing, health care and discretionary like travel, entertainment and fine dining. A lot has changed since that video was published in september 2021. We’re seeing a high inflation rate, like we’ve, never seen before, unless you’re a baby boomer who experienced high inflation in the 70s, the stock market, like the s p 500. Dow and nasdaq is down 20 25 or even 30 since the beginning of 2022. I also had a significant life event and i recently got married to my beautiful wife, whom i dated for over four years, and we’re still fine tuning our fat fire strategy to make sure that we can retire early together for uh by age 45. After doing several fat fire calculations based on our income, expenses, inflation and investment, we’re going to have to change our fat fire number from 2 8 million dollars to about 3 7 million dollars, and this is the most conservative conservative fat fire number. We came up with and we would also like to live in several locations and not just stay in one place during our retirement, which will increase our baseline expenses. If you’re brand new to my channel, my name is sai and welcome. So in this video. I’m gon na go over how we’re investing to achieve fat fire of 3 7 million dollars and how we’re, prioritizing our savings and investment based on our future expenses, so we can retire early from the 95 workforce. This is a juicy video and i hope you get a lot out of it. Also don’t forget to check out my grammarly affiliate link in the description below so the first thing we had to figure out was our fat fire number. Now we have several fire strategies like lean fire, which is for people who want to live a minimalistic lifestyle coast fire, which is for people who want to coast into normal retirement and barista fire, which is for people who want to take a part time job to Pay for health care expenses, while using their nest, eggs to pay for their retirement lifestyle, be sure to check out those videos, and i will put those links in the description below but fat. Fire is the lifestyle we want where we can truly enjoy our lives by traveling, the world and living in several locations. We don’t know what those countries are just yet, but we plan to travel overseas at least once or twice a year to do some research. So the first thing we have to do was to figure out our annual expenses. Originally, we would have been happy with just 100 000 a year in passive income using the 4 withdrawal rate. So what that means is that, with a 2 5 million dollar investment portfolio, we would withdraw 4 of that portfolio every year in the amount of one hundred thousand dollars. We would also have uh three hundred thousand dollars or ten percent of our total portfolio in cash or cds on the sideline. In case we experience a bear market, like we’re, seeing now in 2022, so we wouldn’t have to sell our stocks at a loss from our investment portfolio. Our baseline expenses will increase based on inflation, but that doesn’t mean every single expense. In our household is going to dramatically increase our mortgage payments, for example, will remain the same because they would be at a 30 year fixed mortgage rate, and another possibility is that we pay off our home completely if the mortgage rate stays above six percent for the Next 10 years, which would suck, in my opinion and, however, paying six six percent interest for our primary residence, wouldn’t be worth it anymore. If the stock market performs seven percent on average annually, even if the market performs 10 annually, the margin isn’t wide enough for us to justify to keep making mortgage payments. Then let me know in the comment section down below if you have a different, take or different approach on our strategy, i would estimate our baseline expenses between housing utilities, transportation, groceries and healthcare expenses to be anywhere around 50 and 75 000 a year based on a Three percent annual inflation rate and the only wild card we have is healthcare, and i can only imagine our healthcare expenses to continue to increase over the coming years and especially if we decide to retire in the us. We’re also going to have several properties in different states or different countries, and that will increase our basic housing expenses with our fat fire number at 3, 7 million dollars, the 4 withdrawal rate will be 148 000 a year. The 3 withdrawal rate will be around 111 000 a year if we end up not spending too much money due to a bear market or other short term catalysts. After the baseline expenses, we could spend anywhere between 36 and 61 000 a year on travel and entertainment. Keep in mind that we’re going to recalculate our fire number every year, based on our future expenses and inflation, make sure to watch the entire video, and i will show you our passive income sources and the investment strategy by the way. If you need help creating your own fire strategy, you can schedule a free one on one 20 minute financial coaching session by visiting fischer com, coaching for our fat fire strategy. We’re going to prioritize our savings and investments in this order. Cash for annual expenses like taxes – and we want to have at least 10 to 15 percent of our net worth in liquid assets. So if our net worth is a million dollars, then we want to have at least one hundred thousand dollars in cash or cash equivalent assets. The second priority is our retirement accounts like tsp pensions, iras and hsas, and i will talk more about that in a little bit. The third priority is our non retirement assets like the taxable brokerage accounts for our early retirement between the ages of 45 and 60. The fourth priority is our travel fund, entertainment and our daughter’s college fund. I also have a fire checklist that we follow and you can download for free by visiting fightcech com contact. We have our emergency fund in a completely separate savings, account that we do not touch unless it’s for emergency medical expenses or anything else that’s unexpected. Our rule is that we only use it if it’s an unexpected emergency, and i strongly encourage you to check out this video i made about the emergency fund and i will link that video in the description below just keep in mind that the differences between A rainy day fund and an emergency fund is that in a rainy day fund you need to cash right away for a blown tire, and an emergency fund is to cover your living expenses. While you’re looking for a new source of income and since we’re debt free and we have a fully funded emergency fund, we maxed out our tsp iras and hsas between my wife and i we contribute up to 50 000 a year, including our Employer matches and she has the nevada state pension fund, which is a lot different than the traditional retirement accounts like 401k or tsp. She contributes 15 of her income and her employer makes a 100 match to her personal contribution, and i can contribute up to 20 500 and another eight hundred dollars from my employer match to be exact. We contribute a total of forty, nine thousand six hundred and thirty one dollars, and we expect the contribution limits to increase over the years. We also prioritize our roth iras and since we exceed our roth ira income limits, we have to do what’s called a backdoor roth ira, and i will link that video in the description below we each contribute six thousand dollars to our traditional iras as non Deductible contributions and then we convert the six thousand dollars to our roth iras. That’s a total of twelve thousand dollars between the two of us and just keep in mind that the rules for roth iras are different like contributions, conversions and earnings. And i strongly encourage you to watch the video about the five year conversion ladder, so you have a better understanding of the roth ira conversion rules. We don’t plan to touch our roth iras until we’re in our 60s or 70s, because we want our roth ira race to grow tax free as much as possible and as long as possible. We expect to have about four million dollars total in our roth ira race. By the time we turn 60 Hsa is another investment account that we own through our employers, and i understand that not everyone is eligible to contribute to the hsa, especially if you have tricare hsa stands for health savings account and it’s completely different from the Healthcare fsa, which stands for flexible savings account and the hsa comes with triple tax advantages, so we can contribute to it in pre tax dollars, which lowers our taxable income. We can invest what we put in the hsa into an index fund like the s p, 500 index fund and the interest and earnings will grow tax free. We can also withdraw from our hsa tax free as long as as we use it for medical expenses and we keep every receipt from medical, dental and vision expenses we paid in cash, so we can get reimbursed for those expenses during our early retirement. When we turn 65, we can withdraw from our hsa for non medical expenses and only pay federal income taxes for the withdrawals. Since we file our taxes jointly, we contribute up to 7 300 a year for our family hsa. If we don’t make any withdrawals during our early retirement, we should have about two hundred and fifty thousand dollars by the time we turn 50 years old by age 65. We should have 1 2 million dollars in our hsa, with a 10 average annual rate of return between tsp state pension funds, uh roth iras and hsas. We’re contributing a total of 68 931 dollars just for the year 2022 and we’re expecting the contribution limits to increase, at least for the next few years, due to high inflation hsa’s contribution limits for 2023 is already increased from seventy. Three hundred dollars to seventy seven hundred dollars. I expect the contribution limits for iras to increase from six thousand dollars to possibly seven thousand dollars and 401k or tsp from 20 500 to possibly 21 500. We also contribute to our non retirement. Investment accounts, like the taxable brokerage accounts. We have one brokerage account that only invests in aggressive and high growth stocks. We have another brokerage account that only invests in income based stocks that pay quarterly dividends to their shareholders. We’re hoping to consistently invest 50 000. A year into these taxable brokerage accounts so that by the time we retire early in 2032, we would have at least one million dollars in our dividend: stock portfolio and another million dollars in our growth stock portfolio. If we maintain a four percent annual dividend yield in one of those accounts, we should make forty thousand dollars a year just in dividend income and keep in mind that the tax rate for dividends is also different from the federal income tax. We expect to have minimal earned income, and that puts us in that zero percent capital gains tax category based on my calculation, and if we make less than eighty four thousand dollars a year in earned income, our dividend tax rate should remain zero percent. As long as congress, doesn’t mess up mess up our tax rates, our goal is to minimize our taxes as much as possible during our early retirement. So now let’s go back to my fire checklist for a minute and we’re already saving over 60 of our income towards our retirement and non retirement accounts and whatever we have remaining usually goes to our travel and entertainment fund. And we call that our sinking funds – we’re, currently saving anywhere between 10 and 15 000 a year into our travel fund, and if we decide to travel more or our income continues to increase, then we’ll bump it up to our uh, maybe 20, To 30 000 a year, we’re also contributing to our daughter,’s. 529. It it’s projected to cover a significant amount of expenses for college tuitions. We’re not too worried about her college tuition because i already transferred my post 911 gi bill over to her and several years ago, and even if my daughter ends up not using the 529 college fund, i can change the beneficiary to my future grandkids or Even to myself, if i want to by the way you can get our free fire resources, including these spreadsheets, by visiting fischer com contact, you can also check out the fight such as shop, and i have all of my stuff on my bookshelf. At firesidechat com shopping. Now let’s talk about our income sources during our early retirement, if 2022 taught us anything and that is to diversify our income sources, so we don’t have all of our money in the stock market with 3 7 million dollars our net worth should Be anywhere between six and nine million dollars, one of our main sources of income is our dividend, and i’m gon na be very conservative here and say we’ll make anywhere between 40 and 50 000 a year in dividend income just from our taxable Brokerage account at the same time, we’re going to convert what we have in our traditional retirement accounts to our roth iras and that will trigger a taxable event right. However, since our earned income is zero because we will be retired, every 50 000 we convert from our traditional retirement accounts will be taxed at 12, as opposed to 32 percent based on our current income. So for every conversion we make from a traditional to a roth account there’s a five year waiting period before uh before we can withdraw that conversion, completely tax free from our roth ira. So what we’ll need to do is have extra cash to cover expenses during the first five years of conversion to keep our taxes at the lowest rate possible. So when we convert fifty thousand dollars in the year 2032, we will have to wait until january. First, 1st 2037 to make the 50 000 withdrawal completely tax, free and penalty free. We just need to make sure that we have enough cash or other income sources to cover between 2032 and 2037. This is a common fire strategy that early retirees use. So i strongly encourage you to check out this video about the 5 year conversion ladder. We prioritize our retirement accounts over our non retirement accounts because our retirement accounts, like the tsp pension fund, iras and hsas, are like a full back plan. If we decide not to retire early and we want to grow our tax advantage, retirement accounts as much as possible, so we can retire comfortably when we turn 60 years old, completely. Tax free and our primary focus is building our stock market and real estate portfolios. To make sure the money can last during our early retirement between the ages of 45 and 60, consistency and patience are the keys to our financial success. We’ll always invest up to the maximum contribution limits to our tsp ira and hsa and will save at least half of our income to both retirement and non retirement accounts. Whenever we experience a bear market like in 2022, we’re excited to invest in these stocks with a discount and it’s like going to a black friday sale at best buy and what’s different about this bear market is that we’re Dealing with high inflation as well, we increased our fire number because the prices we’re seeing now should be the prices we see five years from now, and i think a lot of these expenses are already priced in and we’re not going to see Much of a decline in the future, but instead there will be a slowdown in the inflation rate in 2023 and possibly into 2024. This is why budgeting is so important for everyone who is pursuing financial independence and retiring early from the 9 to 5 workforce, and if you want to know more about how to invest for your future, be sure to check out these two videos so that’s It i appreciate you watching my video don’t forget to subscribe and i hope to see you in the next video have a good one Music. You

As found on YouTube

home

Read More

The 4% Rule for Retirement (FIRE)

If you have spent any time researching retirement planning online, you have heard of the 4% rule. If you haven’t heard of it, the 4% rule suggests that if you spend 4% of your assets in your initial year of retirement, and then adjust for inflation each year going forward, you will be unlikely to run out of money. To put some numbers to it, if you wanted to retire and spend $40,000 per year, adjusted for inflation, from your portfolio, you would need to retire with one million dollars to adhere to the four percent rule. This rule is alternatively described as the requirement to have 25 years worth of spending in your portfolio to afford retirement. 1/25 equals 4% – it’s the same rule. While it is simple and elegant, the 4% rule is probably not the best way to plan for retirement, especially if you plan on retiring early. I’m Ben Felix, Associate Portfolio Manager at PWL Capital. In this episode of Common Sense Investing, I’m going to tell you why the 4% rule is not a rule to live by.

The 4% rule originated in William Bengen’s October 1994 study, published in the Journal of Financial Planning. Bengen was a financial planner. He wanted to find a realistic safe withdrawal rate to recommend to his retired clients. Bengan’s breakthrough in determining a safe withdrawal rate came from modelling spending over 30-year periods in US market history rather than the common practice of simply using average historical returns. Using data for a hypothetical portfolio consisting of 50% S&P 500 index and 50% intermediate-term US government bonds he looked at rolling 30-year periods starting in 1926, ending with 1992. So, 1926 – 1955, followed by 1927 – 1956 etc., ending with 1963 – 1992. The maximum safe withdrawal rate in the worst 30-year period ended up being just over 4%. From this simple but innovative analysis, the 4% rule was born. More recently Bengen has adjusted his spending rule to 4.5% based on the inclusion of small cap stocks in the hypothetical historical portfolio.

While the 4% (and the 4.5% rule) may have basis in historical US data, there are substantial problems with these rules in general, and specifically in the case of a retirement period longer than 30 years. In his 2017 book How Much Can I Spend in Retirement, Wade Pfau, Ph.D, CFA, looked at 30-year safe withdrawal rates in both US and non-US markets using the Dimson-Marsh-Staunton Global Returns Dataset, and assuming a portfolio of 50% stocks and 50% bills. He found that the US at 3.9%, Canada at 4.0%, New Zealand at 3.8%, and Denmark at 3.7% were the only countries in the dataset that would have historically supported something close to the 4% rule. The aggregate global portfolio of stocks and bills had a much lower 30-year safe withdrawal rate of 3.5%. Considering returns other that US historical returns is important, but, in my opinion, one of the most important assumptions to be aware of in the 4% rule is the 30-year retirement period used by Bengen. People are living longer, and many of the bloggers citing the 4% rule are focused on FIRE, financial independence retire early.

In Bengen’s study the 4% rule with a 50% stock 50% bond portfolio was shown to have a 0% chance of failure over 30-year historical periods in the US. That chance of failure increases to around 15% over 40-year periods, and closer to 30% over 50-year periods. FIRE likely means a retirement period longer than 30 years. Modelling longer time periods using historical sampling becomes problematic because we have data for a limited number of historical 50-year periods.

One way to address this issue is with Monte Carlo simulation. Monte Carlo is a technique where an unlimited number of sample data sets can be simulated to model uncertainty without relying on historical periods. Even with Monte Carlo simulation, there is an obvious risk to using historical data to build expectations about the future. The world today is different than it was in the past. Interest rates are low, and stock prices are high. While it may be reasonable to expect relative outcomes to persist, such as stocks outperforming bonds, small stocks outperforming large stocks, and value stocks outperforming growth stocks, the magnitude of future returns are unknown and unknowable. To address this for financial planning, PWL Capital uses a combination of equilibrium cost of capital and current market conditions to build an estimate for expected future returns for use in financial planning. This process is outlined in the 2016 paper Great Expectations.

Using the December 2017 PWL Capital expected returns for a 50% stock 50% bond portfolio we are able to model the safe withdrawal rate for varying durations of retirement using Monte Carlo simulation. We will assume that a 95% success rate over 1,000 trials is sufficient to be called a safe withdrawal rate. For a 30-year retirement period, our Monte Carlo simulation gives us a 3.5% safe withdrawal rate. Pretty close to the original 4% rule, and spot on with Wade Pfau’s global revision of Bengen’s analysis. Now let’s say a 40-year old wants to retire today and assume life until age 95. That’s a 55-year retirement period. The safe withdrawal rate? 2.2%. I think that this is such an important message. The 4% rule falls apart over longer retirement periods. So far we have talked about spending a consistent inflation adjusted amount each year in retirement. One way to increase the amount that you can spend overall is allowing for variable spending. In general this means spending more when markets are good, and spending less when markets are bad. The result is more spending overall with a lower probability of running out of money. The catch is that you have to live with a variable income or have the ability to generate additional income from, say, working, to fill in the gaps when markets are not doing well.

We also need to talk about fees. Fees reduce returns. Fees may be negligible if you are using low-cost ETFs, but they become extremely important if you are using high-fee mutual funds, or if you are paying for financial advice. The safe withdrawal rate in the worst 30-year period in the US drops to 3.56% with a 1% fee, making the 4% rule the more like the 3.5% rule after a 1% fee.

Adding a 1% fee to the Monte Carlo simulation reduces the safe withdrawal rates by around 0.50% on average. In both cases this is a meaningful reduction in spending. Of course, fees need to be considered alongside the value being received in exchange for the fee. This value should be heavily tied to behavioural coaching and financial decision making. There have been two well-known attempts to quantify the value of financial advice, one by Vanguard and one by Morningstar. Vanguard estimated that between building a customized investment plan, minimizing risks and tax impacts, and behavioural coaching, good financial advice can add an average of 3% per year to returns. Morningstar looked at withdrawal strategies, asset allocation, tax efficiency, liability relative optimization, annuity allocation, and timing of social security (CPP in Canada), to arrive at a value-add of 2.34% per year.

PWL Capital’s Raymond Kerzerho has also written on this topic, finding an estimated value-add of just over 3% per year. Based on these analyses, one could argue that paying 1% for good financial advice could even increase your safe withdrawal rate. I would not go that far, but the point is that while fees are a consideration, they may be worthwhile in exchange for good advice.

As found on Youtube

Read More

How To Retire Early Through Property Investing | A Retirement Planning Pension Strategy

Most people will likely consider it impossible when they come across this video’s thumbnail. However, I want to demonstrate how it is feasible to retire in two years by investing in a specific type of property, simply by taking action. My name is Tony Law from Your First Four Houses, and I coach individuals on how to construct a small property portfolio that produces a substantial income stream, enabling them to become financially independent and leave their regular jobs if they choose to. For 21 years, I worked in a kitchen business where I traded my time for money, but in under two years, I managed to substitute that kitchen income with a passive or relatively passive rental income. In this video, I’ll demonstrate how you can accomplish the same.

Now, let’s assume that you do not require 10,000 pounds per month to retire and live comfortably. The average household income in the UK appears to be between 28,000 to 35,000 pounds per year, depending on where you live, although living comfortably on that amount might be challenging for some. To keep things simple, let’s round it up to 42,000 pounds per year, which equates to 3,500 pounds per month in passive rental income. While some may think that figure is low, I believe most people could retire and live comfortably on that amount if they had no other expenses. So, we now have a clear objective to work towards.

When looking to earn a passive income of 3,500 pounds per month, the first step is to determine how many rental units are needed to achieve this goal. The number of properties required will depend on the deals and strategies employed, but for the purposes of this exercise, let’s assume an average cash flow of 500 pounds per month after all expenses. With this in mind, seven properties would be needed to generate 3,500 pounds per month. While this may seem daunting, it is achievable within a two-year timeframe with the right approach and effort.

Achieving a passive income of 3,500 pounds per month may seem like an impossible feat, but let me show you how it can be done. As a property investment coach, my goal is to help people build a small property portfolio that generates a great income, allowing them to achieve financial freedom.

To start, we need to break down the numbers. 3,500 pounds per month can be achieved with a portfolio of seven properties, each generating an average cashflow of 500 pounds per month. While this may seem daunting, I believe it can be accomplished in just two years with a ton of effort and action.

In the first year, you may acquire two to three properties, with the remaining four to five acquired in the second year as your experience and confidence grow. Although it won’t be easy, with hard work and dedication, you can achieve this target.

If you’re interested in learning about the 15 tasks you can do in the next seven days to help achieve your goals, check out my video. Property investing may require hard work, but the rewards are worth it. In just a couple of years, you can replace your income entirely.

To assist you on your journey, I have updated my 50 point checklist for buying investment properties. If you’re interested in receiving a copy, click the link provided or see the description box below. My goal is to help you achieve financial freedom through property investment.

As found on Youtube

Read More

How To Retire Early? (Young And Rich: Is It Possible?)

Hey, what’s up? John Sonmez here from simpleprogrammer.com. Tired of pushy recruiters sending you LinkedIn requests for jobs you have no interest in? Tired of blasting out resumes into the dark? If so, you should check out Hired.com. Hired.com flips job searching on its head by having top employers like Facebook come to you after you fill out one simple application. You also get your own job coach to help you on your next job search. If you haven’t checked it out, I highly recommend you at least fill out the application. Just go to Hired.com/simpleprogrammer. When you get hired with Hired, you’ll get double the normal sign-on bonus for using that link. Today we’re going to be talking about real estate.

Yes. I have done some videos on real estate. Some of you are like, “What the heck? Why is this guy talking about real estate?” Well, I’ve done fairly well in the real estate realm. If you’re interested, you can always check out my playlist on real estate investment and investment in general. I’m not going to go into all the details here, but occasionally I like to answer a few real estate questions on this channel. I got one here from Jonathan and he says, “I’m 21 and set a goal that I want to retire by 40 to 45.” Cool. “With 20K of passive rental property income.” Man, that’s awesome. I like that. I love that goal. That’s a good goal. “Currently saving money to buy my first property and hopefully, when I get a web development job I can speed up the process. My question is how do I plan for this goal?” This is good.

So, 21, Jonathan is 21 and he’s thinking this way and he’s got this plan by 40 to 45 to make 20K of passive income from rental properties. I love this. This is great. “Thanks for everything you do and have a beautiful day.” I am having a beautiful day. Thank you, Jonathan. “P.S. I was thinking of buying a duplex and live in one and I rent out the other one so basically the tenant pays my mortgage.” So, okay, there’s a lot of ways to approach this. I think Jonathan has got his head screwed on right. Well, I’ll start with the last, the P.S. of renting out a duplex and living in one side. I think that’s a great idea. This is a fantastic thing. More people should do this. A lot of you young people out there that are thinking about renting or buying a house, consider buying a duplex and renting out one side and if you find the right deal which—it’s out there, you could actually have the renters pay your rent.

You see what I’m saying? You could actually live for totally free by having a duplex and renting out one side. I’m not going to say it’s going to be super easy. I’m not going to say that those deals are everywhere. It depends on where you’re at. You’re not going to find that deal in California or New York, San Francisco, not going to happen, but if you’re in the Midwest you might be able to find that deal. I’ve seen it before. I think that’s a great idea, but let’s talk about the plan. 21, you want to retire by 40 to 45. You want to get 20K of passive real estate income. It’s not going to be easy, but it’s certainly doable. What you need to do is you need to calculate backwards where you need to be and have a real solid plan for this.

I can give you a general outline, but I haven’t run the numbers so I can’t tell you exactly. There are going to be some factors in here, but you actually need to take a spreadsheet and actually need to calculate this and figure this out. It’s going to be fairly complex, but you don’t have to be super detailed. You can kind of ballpark this, but you do need a spreadsheet. You can get some rough answers here, but calculate this out, 20K of passive income from real estate. Let’s say 45. What does your gross need to be? You’re going to have expenses, you’re going to have rents, I mean you’re going to have property management, you’re going to have a bunch of things here. That can give you an idea of what kind of wrench you need to be pulling in. It’s not going to be a 20K wrench, you’re not just getting 20K. It might be like 30 or 40K a month of rents. In order to get 40K a month of rent how many properties do you need and how much will those properties cost? How can you divide that over time and put inflation into the equation a little bit here over that period of time? Work backwards and make a spreadsheet and run some scenarios.

This is going to take time and some planning. Like I said, you can rough ballpark it. If I were just going to give you what I think would probably work for you, it also depends on how big your budget is. How much money are you investing every year? How much money do you have to invest every year. If you can put 10K down onto a rental property every year that’s different than, “Hey, I’ve got 50K to invest in real estate every year.” That’s different. Or 100K. Those are all different scenarios. What you’re planning based on your current scenario might—there may not be—there might be this gap and you might be like, “Well, how do I get there?” It might not be apparent.

You might have to do some other things. You might need to make more money in your job or start a side business in order to fuel that. I had to do that to reach some of my real estate goals. Think about that and calculate that out. I’ll give you kind of a rough timeline, a rough plan that I would have if I were you which would be something like—and this was the plan I initially developed when I was doing this which would be to buy one property every year, regardless. The nice thing I like about this plan is that it’s scalable.

The size of the property depends—is dependent upon how much money that you have in that year. When I first started in real estate investment when I was close to your age, I think I bought my first house at 19, but I really started doing investments around 21 and started this plan of buying one house per year. I think the first house that I bought I was able to put $10,000 down. It was like a $100,000 house or $120,000 house. The next year it was probably about the same and then probably like the third or fourth year I had more money. I was able to put $20,000 or $30,000 down. I got to the point where I was buying properties and I was putting about $20, $30, $40,000 down every year on a property when I buy it. Some of that was because of the real estate that I was already making me money. Some of it was because I was making more money in my job and I had businesses and side things going on which helped me to do that. That’s the kind of plan that I would—it’s not going to happen magically. I think that’s the key thing. You actually have to have a solid plan for this and you can run these numbers and calculate this out.

There’s actually a really good book that I recommend called The Millionaire Real Estate Investor. I think that’s by Garry Keller, the founder of Keller Williams if I recall correctly. I don’t recommend very many real estate books, simply because a lot of them are crap. The reason why I’m really going to recommend that book to you is because it has these charts that show you—it gives you a realistic expectation over 20 years what the value of a property is likely to be, how much money you’re likely to make from it, cashflow and all that. Again, it’s as complex equation. You’re not going to be able to nail this down perfectly, but at least if you run the numbers and you do the best job that you can, you can have a ballpark idea and you can always adjust the plan. You’ve got to have—you’ve got to know where you are and where you need to go in order to reach these goals. I’ll also recommend for you—I have a course that I created called Simple Real Estate Investing for Software Developers.

You can check that out here. If you buy that course, obviously it has a money back guarantee on it, but that’s going to help you to give you the basics of everything I know about investing. Just to give you a background, I have about 26 rental properties. They are all paid off. I started investing when I was 19. I kind of know what I’m talking about here. I don’t give a lot of bull shit advice about this. I give you exactly—practical advice on how to get started and how to do this.

The reason why I created the course, even though it might not seem like it goes along with a lot of my other content, it was just simply because I was tired of so many people giving BS real estate advice and doing all these kind of scamming, no money down, speculative moves that just doesn’t make sense. You need some kind of practical advice so that’s what I put together there. Go check that out. This is good. I think you’ve got a good plan here. You just need to develop the plan further and it’s going to be very dependent on your individual factors and—I think you have information though to say, “Okay, can you do this in 45—by the time you’re 45?” absolutely! I believe that you can. It’s not going to be easy, it’s going to be hard to do. 20K is a pretty big number but it’s certainly possible, but you’re going to have to start moving now, which it seems like you’re going to do, and you have to have a plan and it’s going to take a lot of work and a lot of effort and you got to find good deals in order to be able to do this in that time frame.

All right, I hope that is helpful to you. If you have a question for me, you can email me at [email protected]. Don’t forget to click the subscribe button if you haven’t already. Click that Subscribe. Click the bell to make sure you don’t miss any videos especially if you like the real estate stuff because, hey, those videos might not show up and then you’d miss it and then you wouldn’t find out the secret to life and how to make millions of dollars. All right, I’ll talk to you next time. Take care .

As found on Youtube

Read More

How we Retired at 40..đź’°7 tips to succeed for Early Retirementđź’°

Hey guys retired at 40 I’m going on a little road trip today just me and Murph and last week I reached a milestone on my channel and I hit a million views total and 10,000 subscribers in the same week since I’ve been getting requests for quite a long time about how I retired at 40 and I’m on a long road trip right now I figured what better time to share the story so without further ado here’s the retired at 40 story so before I get started I want to say that this is not in any way a brag story in fact I’m definitely not a showy type guy I enjoy very simple things in life and money to me is more of just a vehicle to be able to retire young and have my family live a comfortable and an easy life and to be able to enjoy lots of life experiences and be comfortable in life before I’m old and gray so really the journey began in about 2002 graduated from Iowa State University with a degree in marketing and business and by that point I have met my wife Kelly she had already graduated from school and she was kind of waiting for me and we wanted to move west out of the Midwest to move west see some new territory and get closer to the outdoors so I grabbed my degree ran out the door packed up my 1987 Ranger fully equipped with eight foot hay racks full of all of my personal belongings and we drove to Littleton Colorado and at this point in my life I had $200 in my pocket and Kelly had about the same so being completely naive and basically completely broke but with a degree I was on the search for the best suit and tie job that I could possibly find so I bounced around for a couple months just working some kind of halfway jobs and I quickly realized that I did not want to wear a suit and tie and I wanted nothing to do with the man and working a nine-to-five job well Kelly had found a job in a real estate office working the front desk and she had become friends with a couple of the big-time Realtors there one of which you caught wind that I had some handyman type skills but he made me a deal that if he paid cash for a house and I fixed it up that he would split the profit with us 50/50 and at this point in my life all I saw was dollar signs if I was completely blown away that there was someone that could pay cash for a house this is coming from a guy who had less than $200 in his pocket at this point it was pretty much scraping by I tried to hold back my excitement to him but naturally I said yes please let’s do that I was working the graveyard shift at Target stocking shelves I’d worked for 10 hours I would go home grab a little bit of breakfast and I’d head over to the property and work on it for another five or six hours I try and catch a few hours of sleep and then I would rinse and repeat it was at this point in my life that I learned a few different things one you really have to dig deep to reach your goals in life because I was not getting paid by the hour and at this point I didn’t know how much money I was gonna make I didn’t know if I would make $500 when this was all done or if I was going to make $5,000 when this is all done so I learned that a lot of things that can benefit you financially you have to put in the work upfront without knowing what your final outcome is going to be after about three months which seemed like an eternity of working seven days a week for sometimes 15 sometimes 20 hours a day on this house the house was ready to go on the market and it was all finished it looked great and then before you knew it it’s sold and then the house closed and at this point I still didn’t know what we were gonna make off it but for me it didn’t matter the hard part was done I didn’t have any of my own money into it I just had my time basically so the guy we were doing the investment with hands me an envelope and I opened it up and at $8,000 being twenty-two years old and having $8,000 I might as well have hit the lottery and that brings me to my second valuable lesson that I learned and that is being responsible with money so when you have $8,000 and you’re 22 years old a lot of people would go buy a new car they’d go buy some flashy things some pretty things but to me I had realized that if I can make $8,000 once I can make $8,000 again and again and again and again so I can either go p*&% the $8,000 away that I had worked my a#* off for or I can take that $8,000 and do exactly what he did but do it myself and potentially make twice or three times as much money so my wife being in a real estate office we became acquainted with quite a few smart people financially smart people we learned a lot about real estate very quickly because we were willing to learn which is my next valuable life lesson is that you never stop learning so we took our $8,000 we put a small down payment on a condo in Littleton because we realized that giving someone else our money was you might as well be throwing it away we wanted to be working towards something and it own something on our own so we took our other four or five thousand dollars and we started our search for a real estate investment that we could do all of our all on her own and get a hundred percent of the profits so after some searching we did find a place we found a small town home it was not in as nice of area as we were living it was smaller it needed lots of work but that takes us to our next light life lesson that we learned and that is to sacrifice for a greater payoff in the future so we had only lived in our condo for a very short time but we realized that if we moved into the real estate investment that we could rent out the place that we are living at and move into the place that we were fixing up that we’d have to be paying a mortgage on anyway we had our first real estate investment and we had our first rental so being 22 years old and owning two properties and carrying two mortgages and at this point I’m still working at Target was a pretty scary proposition in life but all I could see was that $8,000 check they had started to change our lives I also want to point out and kind of give a shout-out to my parents and to my wife’s parents because neither one of our parents ever handed us anything in life they always made us work for what we achieved in fact when we move we tried to convince my parents to co-sign on our mortgage for the condo that we bought and they said no way at the time I was very very mad at them and I thought I would never forgive them in hindsight it was one of the best things they’ve ever done for me because it just made me have that fire in my belly and really just want to work to get what I wanted so back to having two mortgages that was a completely scary thing in my life I was making something like 10 dollars an hour at Target I think Kelly was making $13 an hour at the real estate office she was working at we could barely afford the condo we had but now he had two.

God bless the banks lending money to anyone at that point on the very plus side of that we learned that someone else can pay our mortgage and we’re basically getting that money for free and then later we figured out that there are many many many tax benefits and huge benefits of owning a rental property so we quickly learned that trying to pay for materials and the things needed to fix up an investment property on just barely over minimum wage is not easy to do the thing that happened next couldn’t have come at a more perfect time so all of a sudden I had money to spend to fix up this house and it would just get me to that next big paycheck that much quicker so that’s what we did we fixed up the house we doubled our money we rolled it into the next one so we kept bouncing from house to house quite a few times and that sacrifice of from going from a nice house to live in to going to a crappy house to live in to fix up to making it nice again to going to another crappy house to fix up it became pretty stressful but we always had our eyes on the prize “are you still with me Murph?” after doing this two or three times I remember getting a check for the last one and the check was forty one thousand dollars so at that point it didn’t make sense to work at Target anymore so I just started doing it full-time but we never took the big proceeds from the real estate and put it into our actual living we always rolled it into the next property and that kind of gave us the baseline of even how we live today we always live well below our means we take the money that we make and we put it into things that will make us an income not into something that will lose us money but you do have to treat yourself every once in a while otherwise there’s no reason to make the money in the first place Kelly saw many of the high producing Realtors making large amounts of money so she decided to get a real estate license and she created her own real estate business so now we really felt like we had the world by the balls because we were getting paid a commission to buy the property and then we were saving half of the Commission when we sold the property and I was fixing him up so we just get rolling our profits in rolling our profits in rolling our profits in until family we were able to buy a house and now that we could get a house we were playing with the big boys the profits were much larger but so was the risk and we really didn’t want to lose all the way it worked for for the last couple of years so we did a few houses and we made some great money but instead of selling them and pulling out our profits we kept them as rentals and it was at this point that we really started building up our rental inventory at this point it was about 2006 or 2007 and real estate was starting to slow down a little bit but we have purchased a large house I’m a courage that was really a big risk for us it was a large house to fix up it was our biggest project for sure it took us the most money to fix it up and we had the most money into it so we lived in this house for about 8 months while we were fixing it up and we kind of decided after doing about 12 properties that the moving all the time was starting to get kind of old and we were kind of getting older ourselves and we decided that we wanted to have kids and kind of settle down a little bit Murph are you with me? sometimes I feel like I’m just talking to myself so after the eight months was up we finished the house we sold it and shortly after the real estate market completely crashed the bubble had burst and Colorado was one of the hardest hit States we got out of the house just in the nick of time and not only did the real-estate market bubble burst we found out that we couldn’t have kids and it seemed like a real low point in our lives but around 2007 when all this happened we realized our next lesson with every negative there is a big positive that can be gained from it and you can just use it as fuel for your fire so the recession was tough we thought our great life had come to an end we thought we were gonna have to get regular jobs you know people were losing their jobs left and right people were losing their houses Colorado was hit very very hard one of the worst states during the recession and we learned that what goes up must come down and in this case it came down hard in many cases not just real estate when things are bad that’s the time to invest and if you’re smart with your money and you’ve been saving while everyone else spending that’s the time to benefit though from about 2008 to 2012 we were buying rentals so we were able to adapt I started doing contracting because that’s pretty much what I was doing before but now I had to be doing work for someone else and Kelly’s always been a mover and a shaker and even a bad real estate market she was able to keep her business moving we were buying things for pennies on a dollar and even though we were not making great money and in some cases losing a little bit of money on rentals we were able to stick it out and after lots of lots of years of lots of lots of heartache and lots of lots of doctors we were able to have two boys so about 2014/2015 real estate started creeping back up again prices kept going through the roof and just when he thought it was the peak they just kept going up stuff was flying off the shelves you could list a house and it would have multiple offers within 24 hours so we had about age 35 we were completely debt-free we had several rentals that we were cash flowing we didn’t owe any money on the rentals so all that money was just rolling into a bank account when you have no bills and you have an income coming in your net worth starts to grow very quickly so we rode out the storm Kelly’s business was doing great my contracting business was doing great we have liquidated a lot of our real estate in Colorado we had capital to play with we had two beautiful young boys and then I fell to my knees crying like a little baby I had herniated a disc in my back and I was on a walker for about a month contracting for me was out of the question I didn’t even want to think about picking something up so I took some time off and I raised our kids which at first I thought would just be for a few months and then a year passed and then another year passed and I decided that I kind of liked it we had rental income coming in Kelley’s business was doing better than it had ever been in fact she had started her own she had several people working for her and just as a little side income I got to do what I love to do which is antiques I was just buying and selling antiques so we were trying to be very strategic at this point because we owned a fair amount of property in Colorado but we knew that our ultimate goal was to retire at 40 and at the rate things were going up we didn’t want to sell too early because we didn’t want to miss out on that upside but we didn’t want to sell too late because we didn’t want to risk the chance of taking a step back so as some regret we sold the majority of our properties in around 2017 but this was a game-changer because we were able to make cash for every rental that we purchased so we loaded up on rentals in Iowa we actually purchased our property that we’re going to move into which is actually where I’m headed now and that kind of brings us up to speed to current date I take care of our 10 rentals which keep which keeps me pretty busy just in itself i buy and sell antiques i get to see my kids all the time we have a good rental income coming in now we do youtube oh yeah we also do a couple fix and flips every year Kelly has her real estate team with about 10 employees and in June of 2020 we’re going to retire at 40 so all in all life is great I have a wonderful family I have enough assets and passive income to live a comfortable life

As found on Youtube

Read More