Author Topic: First MMM Forum Post: FIRED Earlier this Year  (Read 3892 times)

AaronAJI

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First MMM Forum Post: FIRED Earlier this Year
« on: June 30, 2015, 06:14:50 PM »
This is my first MMM forum post. My wife (29) and I (32) just got FIRED this past February. We started our FIRE planning in 2010 and set the date last summer. Around the time we set the date we discovered MMM which helped immensely. We had always been reasonably frugal but MMM helped put things further into perspective and gave us confidence to pull the trigger!

Since being FIRE'd we finished a backyard patio renovation and traveled to South America for 6 weeks. All the flights to South America were free due to Chase Sapphire and Ink credit card rewards that we got at the end of last year. Our plans for the remainder of our first year FIRE'd are more travelling and relaxing. We have plans to spend the summer on the east coast visiting family. All those flights were also free thanks to the Chase Southwest credit cards and a Southwest companion pass. Finally, in October we are going to Ecuador for 6 weeks and using Delta miles that were left over from my traveling days at work. As you can see we like credit card hacking and flying for free!

We got FIRED mostly due to real estate investing which was made possible by saving money from our day jobs as engineers. We bought foreclosed houses starting in 2009 until 2012 and fixed them up ourselves on nights and weekends. In 2013 we used some equity from the houses as well as other funds we saved up and bought a Mobile Home Park. The Mobile Home Park set us over the top for income needed to retire. Every property we bought has been kept as a rental and we self manage which takes up maybe 2 hours per week. All that was left to do was save up a healthy emergency fund and set the date.

Post-FIRE our investment strategy is different from others on this site. Our expenses including travel are covered solely by our rental income. There is actually an excess so we are still saving money. Since real estate is what we know we still invest just more passively. We do private lending to other real estate investors with our non 401k/IRA funds and also through a Self Directed IRA. Normal annualized returns range from 14% all the way up to 30%. We actually just finished a conversion of all our 401k money to a Self Directed Roth IRA. While we will have to pay a lot of taxes on the conversion, we are confident being in a Roth IRA is better for us long term.

nereo

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #1 on: June 30, 2015, 06:17:51 PM »
Congrats and welcome. Hope to here more from you in the forums.

forummm

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #2 on: June 30, 2015, 06:22:10 PM »
That's a pretty impressive first post there! Congrats!

AaronAJI

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #3 on: June 30, 2015, 06:31:28 PM »
Thanks!

MrsPfennig

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #4 on: July 01, 2015, 12:29:34 AM »
Congrats! Love reading stories like yours. It keeps me motivated.

DoNorth

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #5 on: July 01, 2015, 05:10:40 AM »
who is handling your Self Directed Roth?  I've only seen a small handful of companies that do it.  Fees?  Do you have a CPA manage the transactions for it?

AaronAJI

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #6 on: July 01, 2015, 07:36:16 AM »
I started doing it 1 year ago. This one is a self-directed IRA. I used the company VantageIRA. They are local in Arizona. For the setup of the first I used a third party and paid about $1350. They setup the LLC and the account at Vantage. I then had to setup up a bank account in the name of the LLC. Once funds are transferred to Vantage I instruct Vantage to buy into the LLC. The money goes into the LLC bank account then I'm able to write checks for investments. I also setup a Vanguard account and transfer money from the LLC bank account to the Vanguard account. There is a $350 dollar fee per year per asset in the Vantage account. I have only one asset which is the LLC. At the end of the year I'm responsible for tallying up the total value of the LLC and reporting it to Vantage.

For the Self Directed Roth I decided to do all the setup myself. It is easy to setup an LLC in Arizona. This one costs me about $50 for the LLC and $50 to setup the Vantage account. Much better than $1350:) We started using a CPA for taxes 2 years ago, but only because we have many properties. Before that I always did our taxes. Having done our taxes for many years I have become quite knowledgable. So for the roth conversion I bascially just projected our taxable income for this year then figured how much we were converting and came out with the amount of taxes that would be owed next year.

arebelspy

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #7 on: July 01, 2015, 10:31:27 PM »
Congrats on the FIRE!  Love to see others FIREing with real estate.  2009-2012 was a great time to buy in AZ.

How many properties (besides the MHP) did you end up with?  You have a PM?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

AaronAJI

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #8 on: July 02, 2015, 10:23:31 AM »
We ended up with 8 houses total including our personal residence. Yes 2009-2012 was a special time to buy real estate. At the time we were buying we wish we had more money to buy more properties!

I tell people who want to invest in real estate and retire early these days that it can still be done it would just take longer. We did have the perfect ingredients: good salaries, good savings instincts, and incredibly inexpensive real estate. With all three FIRE can come quickly. Get rid of 1 and it can take considerably longer. If I were to start again today it would take us at least 2x longer. We would focus on more of a balance between real estate and index funds since real estate has become very expensive. For real estate rather than buying as many houses as possible I'd focus on buying good quality rentals and paying them off.

We don't use a PM. Tenants deposit rent with a debit deposit only card. Tenants are responsible for scheduling repairs and being home during the repair. If we are in town I will attempt to fix things. The book "Landlording on Autopilot" helped give us guidance on our management strategy.

Wads

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Re: First MMM Forum Post: FIRED Earlier this Year
« Reply #9 on: July 02, 2015, 11:28:36 AM »
Congrats, keep us posted on how the post fire goes. FIRE at 29/32 is no simple task...im jealous