Author Topic: FIRE ASAP - Pls Help!  (Read 1465 times)

theshittybeatles

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FIRE ASAP - Pls Help!
« on: April 16, 2020, 03:48:42 PM »
About me: I am a 32 year (happily) single male. Iíve always been naturally frugal and a big time saver. It comes easy to me. I recently realized I have about 60K saved up in my savings account and have been researching over the last 3 months on what to do with it. Iím a bit conflicted because I have a few different scenarios that would work. I am a small business owner with a seasonal business. I own a rental property that generates $650 in cash flow/month. I already only work 6 months out of the year and travel for the other 6. In those 6 months I can save around 20K to invest (without factoring in rental property)

My finances:
6 month small business: 50K
House with 5% rate that I still owe $75K on it and 10 years. Currently rent it out for $1,500/month and rent a small apartment with the $650 it gives me in cash flow per month. I essentially live for free while getting my mortgage paid for.
65K savind in my ROTH
50-75K in Disney Stock

I could sell my business for around $75-100K and I bought my house for 123K and itís probably now worth 250K. I could make around 140K by selling the house.

My business is stable yet risky in the sense that I could get sued fairly easily as it falls under the ďhigh risk poolĒ in the insurance world. My insurance is really expensive. Itís essentially a party bus company.

Basic:
Savings: 60K
House: $650/month or 140K by selling
Business: 50K/year or 75K-100K by selling
Stock: 50-75K
Roth: 65K

Here are the 6 scenarios I came up with:
Keep house, keep business, combine all other assets
Sell house, keep business, combine all other assets
Sell house, sell business, combine all other assets
Pay off house (keep to rent out at $1,700/month), keep biz, combine all other assets
Pay off house (keep to rent out at $1,700/month), sell biz, combine all other assets
Keep house (donít pay off), sell biz, combine all assets

Basically, Iím wondering what would be the best move to make financially to achieve financial independence and retire early? I do LIKE what I do for a living, but the risk it carries scares me long term. I know it would be profitable for years to come, but at what cost? Iím HORRIBLE at math, so I was hoping someone could help me with the numbersÖ.. THANKS!!!!!!

*** Iím aiming for 20-30K/year in early retirement****
*** Assume 7% return in an Index Fund*****

LWYRUP

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Re: FIRE ASAP - Pls Help!
« Reply #1 on: April 16, 2020, 04:09:39 PM »
Refinance house at lower interest rate.

Keep business as long as you are not FI.  Figure out how to set up a solo 401(k) so you can get tax savings.  I'd save as much as you can in that, even if it meant spending down some taxable investments to do so.  Manage risks with good contracts, good insurance, and diligence.  Sell business once you are FI and don't want to do it anymore.

I think Disney is a good stock to own but I would use index funds instead. 

Congrats, you're doing great.  I wish I had your housing costs. 
« Last Edit: April 16, 2020, 04:13:25 PM by LWYRUP »

mistymoney

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Re: FIRE ASAP - Pls Help!
« Reply #2 on: May 09, 2020, 10:23:47 AM »
I'm curious about why someone would purchase your business vs just developing their own? What is the value add?