Freelancer, 42,about to make the leap

[Schmidt]

Hi,

I've read most of the MMM articles and I'm nodding along, haven't made the jump though. Here is my situation, any advice is welcome.

I'm 42 years old, single, no kids, working as an IT freelancer. My highly specialized role is in good demand and I can get up to 100€/hour. I have 4 appartments rented out, with a net income (after real estate expenses, before taxes) of 2500€ that's used to pay back the loans. Right now all leveraged, but good stuff long term. In 15 years I will have 100k debt left. That's the thing with real estate, it takes years or decades until you can keep the rent.

Back to my work, the downside is that I need to travel for work and need to be picky about those projects to keep my sanity. I am not sure if this work environment exists in 20 years even if I wanted to work till then. and getting here was a long, tough road. I recently took a few months off and now work 3 days a week (plus a day's worth of travel), both feel fantastic. I have figured out a few other things in my life and am now happy and really enjoy my time. This makes it harder to plug numbers into a retirement formula though.

Not much to say about expenses, I have no obligations but if we're honest the real discipline can only come with a real retirement plan.

Not sure how to go about retirement? I don't know what number I could use as yearly income, since it is kinda variable and I don't know if I can/want to hustle to reach a certain number.

Hope this makes sense, any advice welcome.

[tamuaggie2011]

I read your questions as not really knowing what info you have to actually begin with?

I think the first couple of steps are:

1. Estimating your current year income in annualized terms (you seem to be much happier with the current 3 day a week plan)
2. Getting a ballpark number on your annual expenses (both now and what you think they could be in retirement)
3. Adding up everything you have saved to this point.

Once you have the above 3 items you can begin to have rough answers to your original questions and possible paths forward.

[Schmidt]

Thanks,

I realize I have some homework to do and sort out all the numbers in an excel sheet, especiall expenses, and I almost feel bad to come here a little unprepared, but as an estimate:
- income after tax 70000€
- expenses about 35000€
- savings 15000€

according to the FI calculator that means "FI in 16.6 years" but that doesn't factor in the real estate, that basically carries itself and is done in 15 years.

Retirement at 57??

Additionally I might be able to buy another piece of real estate next year, around 300k, possibly with a slight positive cash flow, but nothing to live off before it's paid off. Selling any real estate would feel quite weird and is complicated with the banks involved.

[helloyou]

How leveraged are you with real estate? What you said sounds good so far.

Do you a target retirement date? If you're happy to work until 57 then all good for you.

If you plan to retire earlier you gotta plan more accurately and estimate your net worth, total debt and total earning before and after retirement.

[LWYRUP]

Hi Schmidt:

Can you break down what portion of your income is freelance work and what is rent? 

I assume your rent income, if any, is net of expenses but please confirm.

Finally, do you have other non real estate assets like stocks and bonds?  How much?