Author Topic: One week in. (One Year Update)  (Read 3206 times)

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
One week in. (One Year Update)
« on: July 21, 2016, 01:27:44 PM »
I found the MMM blog and forums on Friday last week and in the past week I've:
  • bought a bike (and have rode it to the grocery store twice already)
  • cut my cable
  • lowered my hot water heater
  • lowered my A/C (this is a big one because Alabama in the summer isn't comfortable)
  • & most importantly, got my SO on board
I'm looking forward to cutting costs, so we can get to FI much sooner than expected. Next we are cutting the gym membership (we have a powerlifting competition this weekend so we decided to keep it at least until then). I'm listing one of our unnecessary cars for sale. I've been looking into refinancing our mortgage at a lower interest rate, and lower year terms. And my goal is to have our first rental property before the year is up. I understand that this isn't a sprint, so much as its a marathon, but I figure why not get a quick start so our wealth can accumulate while we are pacing ourselves.

Thanks!

One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.


Edited to add update in original post.
« Last Edit: August 17, 2017, 09:11:31 AM by RatRaceRejects »

dcamnc

  • Bristles
  • ***
  • Posts: 352
Re: One week in.
« Reply #1 on: July 21, 2016, 02:40:27 PM »
Way to go, excellent start!

CmFtns

  • Pencil Stache
  • ****
  • Posts: 586
  • Age: 26
  • Location: Melbourne, Fl
Re: One week in.
« Reply #2 on: July 21, 2016, 02:45:21 PM »
Lowering my A/C and save money... witchcraft
I assume you meant raise the temperature

Don't burn yourself out in 5 days this is a long game
"the only efficient way to get there is on the front of the wave" -MMM

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #3 on: July 21, 2016, 05:47:13 PM »
Lowering my A/C and save money... witchcraft
I assume you meant raise the temperature

Don't burn yourself out in 5 days this is a long game

Lowering the A/C usage, by raising the temperature. But rest assured, I've got the long game in mind. Thanks for the advice though. I'm currently scouring through the forums to see how many things I hadn't thought about yet.

Laserjet3051

  • Bristles
  • ***
  • Posts: 318
  • Age: 49
  • Location: SoCal
Re: One week in.
« Reply #4 on: July 21, 2016, 05:57:36 PM »
"The power of no" is one of the most effective and easy ways to radically cut expenses.

Buddy wants to know if I'll go out to that concert with next weekend? NO.
Kids want me to buy them a new plastic watcha-m-callit? NO
Tempted to go out for sushi tonight? No

You get the drift.


CmFtns

  • Pencil Stache
  • ****
  • Posts: 586
  • Age: 26
  • Location: Melbourne, Fl
Re: One week in.
« Reply #5 on: July 21, 2016, 06:21:43 PM »
Lowering my A/C and save money... witchcraft
I assume you meant raise the temperature

Don't burn yourself out in 5 days this is a long game

Lowering the A/C usage, by raising the temperature. But rest assured, I've got the long game in mind. Thanks for the advice though. I'm currently scouring through the forums to see how many things I hadn't thought about yet.

In my opinion there are 3 topics to learn about/implement to reach Financial Independence.
Make sure you are implementing this from all fronts and not cutting all spending.

-Learn to live efficiently and mercilessly slash your spending on every single thing that doesn't matter to you
Some people go overboard at first and cut out everything only to fall back on old habits. Some things in life are worth spending a little bit of money on. I believe the real way to win at this category is to figure out what's actually important and what is not. That way you can completely cut out all random spending that really doesn't affect your life while also learning to efficiently spend money on the things that truly have value to you and can improve your life. Retiring early is as much if not more about controlling your spending than it is about how much you have saved. Finding a balance you can live with is where the real, long term savings come from because people can stick with that lifestyle... forever.

-Know what/where to invest choose a plan and consistently and always throw all your extra money at it
Emotions can not control this at all you need to be a robot and strictly follow the investment rules/goals you set up. Understand then set up an asset allocation and invest in it consistently over time and never panic it will be okay. Total stock market index funds are a great start and Vangaurd is a great company to invest it with.

-Understand how to efficiently battle taxes both during accumulation and when retired
I really like mad fientist's articles about this
http://www.madfientist.com/retire-even-earlier/
http://www.madfientist.com/how-to-access-retirement-funds-early/
« Last Edit: July 21, 2016, 06:25:18 PM by CmFtns »
"the only efficient way to get there is on the front of the wave" -MMM

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 25245
  • Age: -999
  • Location: Traveling the World
Re: One week in.
« Reply #6 on: July 21, 2016, 06:28:57 PM »
Lowering my A/C and save money... witchcraft
I assume you meant raise the temperature

Don't burn yourself out in 5 days this is a long game

Lowering the A/C usage, by raising the temperature. But rest assured, I've got the long game in mind. Thanks for the advice though. I'm currently scouring through the forums to see how many things I hadn't thought about yet.

In my opinion there are 3 topics to learn about/implement to reach Financial Independence.
Make sure you are implementing this from all fronts and not cutting all spending.

-Learn to live efficiently and mercilessly slash your spending on every single thing that doesn't matter to you
Some people go overboard at first and cut out everything only to fall back on old habits. Some things in life are worth spending a little bit of money on. I believe the real way to win at this category is to figure out what's actually important and what is not. That way you can completely cut out all random spending that really doesn't affect your life while also learning to efficiently spend money on the things that truly have value to you and can improve your life. Retiring early is as much if not more about controlling your spending than it is about how much you have saved. Finding a balance you can live with is where the real, long term savings come from because people can stick with that lifestyle... forever.

-Know what/where to invest choose a plan and consistently and always throw all your extra money at it
Emotions can not control this at all you need to be a robot and strictly follow the investment rules/goals you set up. Understand then set up an asset allocation and invest in it consistently over time and never panic it will be okay. Total stock market index funds are a great start and Vangaurd is a great company to invest it with.

-Understand how to efficiently battle taxes both during accumulation and when retired
I really like mad fientist's articles about this
http://www.madfientist.com/retire-even-earlier/
http://www.madfientist.com/how-to-access-retirement-funds-early/

Good post.  I'd add earning more as a fourth one.

And I'd add that deficits in some of them can be made up by being hardcore on the other ones.

The wife and I earned low (public school teachers), I know nothing about taxes, and we never tried to cut spending, but the two strengths we had were our spending being naturally quite low, and our investment side going really well.

But if you are really strong in one or two areas, the others can lag a little (e.g. if you can earn a TON and optimize taxes, your spending and investments don't have to be quite as good... or if you can spend very, very little, your tax and income don't have to be as good).
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

boarder42

  • Walrus Stache
  • *******
  • Posts: 5280
Re: One week in.
« Reply #7 on: July 22, 2016, 02:24:56 PM »
i'd also add if you're looking to do rentals its all about leveraging your money.  so a REFI is Great but it should be done to a 30 year at a lower fixed rate.  dont try to lower your term if you're going into rentals or even investing in indexes for that matter.  b/c with the rate climate in the US right now your money is better served invested in RE or the markets.   Its also a giant inflation hedge as well so
PM me about how to save 6% on your annual grocery Bill!

There is a 35k starwood bonus right now as well. PM me for the info.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 25245
  • Age: -999
  • Location: Traveling the World
Re: One week in.
« Reply #8 on: July 22, 2016, 03:38:49 PM »
i'd also add if you're looking to do rentals its all about leveraging your money.  so a REFI is Great but it should be done to a 30 year at a lower fixed rate.  dont try to lower your term if you're going into rentals or even investing in indexes for that matter.  b/c with the rate climate in the US right now your money is better served invested in RE or the markets.   Its also a giant inflation hedge as well so

100% agree.

I didn't notice this in the OP the first time:
I've been looking into refinancing our mortgage at a lower interest rate, and lower year terms. And my goal is to have our first rental property before the year is up.

But those two strategies are counter-productive, financial strategy-wise.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #9 on: July 23, 2016, 10:24:56 PM »
i'd also add if you're looking to do rentals its all about leveraging your money.  so a REFI is Great but it should be done to a 30 year at a lower fixed rate.  dont try to lower your term if you're going into rentals or even investing in indexes for that matter.  b/c with the rate climate in the US right now your money is better served invested in RE or the markets.   Its also a giant inflation hedge as well so

100% agree.

I didn't notice this in the OP the first time:
I've been looking into refinancing our mortgage at a lower interest rate, and lower year terms. And my goal is to have our first rental property before the year is up.

But those two strategies are counter-productive, financial strategy-wise.

Thanks for the advice, that definitely makes sense now that I think about it. Although, our current home is a condo that we are house hacking so we are planning on moving out within the year anyway. But, I guess keeping it a 30 year mortgage will help the house cash flow a little more per month, which would be useful for reinvesting in more RE in the area.

Also, the first things I did was just cutting some fat off in areas that were easy. We didn't really use the cable, and our hot water was to the point of scalding. I think that once you have the epifany of FI, you realize that most of your spending is unnecessary, and the things you've been meaning to trim anyway become much more of a priority to get the ball rolling. But I'm always open to advice.

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #10 on: August 08, 2017, 07:36:54 AM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

Mr. Green

  • Handlebar Stache
  • *****
  • Posts: 1322
  • Age: 33
Re: One week in.
« Reply #11 on: August 08, 2017, 09:06:18 AM »
You're rockin'! It's so cool to see people's progress once they have a goal and go after it. Sounds like you have a great plan in place to get you across the FIRE finish line.
FIRE, Take Two.

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #12 on: August 08, 2017, 09:30:32 AM »
You're rockin'! It's so cool to see people's progress once they have a goal and go after it. Sounds like you have a great plan in place to get you across the FIRE finish line.

Thanks man! I occasionally talk to friends or family members about FIRE, and not only do they not understand it, but they also think my goals are unrealistic when I tell them I think I'll be able to retire before 30. I tell them that even if I'm off on my calculations by a little bit and have to work longer, even a few years, 33 is still plenty early enough for me. And, even more importantly, my calculations aren't off haha!

boarder42

  • Walrus Stache
  • *******
  • Posts: 5280
Re: One week in.
« Reply #13 on: August 08, 2017, 09:39:14 AM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

good work.
not paying down your rentals in a mortgage snow ball and either investing in index funds or more property will lead to a faster FIRE.
PM me about how to save 6% on your annual grocery Bill!

There is a 35k starwood bonus right now as well. PM me for the info.

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #14 on: August 08, 2017, 09:48:16 AM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

good work.
not paying down your rentals in a mortgage snow ball and either investing in index funds or more property will lead to a faster FIRE.

I'll look into my options when I get the properties, but right now, my return would be better with paying down the mortgage on one of my properties. I owe a little over $30k and at that point without my mortgage the current rent will net me ~$225 more a month. If I invested that $30k the 4% SWR would net me $100/month.

acroy

  • Handlebar Stache
  • *****
  • Posts: 1269
  • Age: 40
  • Location: Dallas TX
    • SWAMI
Re: One week in.
« Reply #15 on: August 08, 2017, 09:57:05 AM »
Badass!!!
SWAMI (Satisfied Working Advanced Mustachian Individual) 1 stash, 1 DW, 7 Mini MM's...
God, Family, Country. Everything else is details.

boarder42

  • Walrus Stache
  • *******
  • Posts: 5280
Re: One week in.
« Reply #16 on: August 08, 2017, 10:11:34 AM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

good work.
not paying down your rentals in a mortgage snow ball and either investing in index funds or more property will lead to a faster FIRE.

I'll look into my options when I get the properties, but right now, my return would be better with paying down the mortgage on one of my properties. I owe a little over $30k and at that point without my mortgage the current rent will net me ~$225 more a month. If I invested that $30k the 4% SWR would net me $100/month.

this is an incorrect way to think about the math.  you have to consider the full return on the 30k + the return on the house after the mortgage. 
PM me about how to save 6% on your annual grocery Bill!

There is a 35k starwood bonus right now as well. PM me for the info.

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #17 on: August 08, 2017, 10:40:19 AM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

good work.
not paying down your rentals in a mortgage snow ball and either investing in index funds or more property will lead to a faster FIRE.

I'll look into my options when I get the properties, but right now, my return would be better with paying down the mortgage on one of my properties. I owe a little over $30k and at that point without my mortgage the current rent will net me ~$225 more a month. If I invested that $30k the 4% SWR would net me $100/month.

this is an incorrect way to think about the math.  you have to consider the full return on the 30k + the return on the house after the mortgage.

Sorry, I misread the part where you said I could purchase more properties instead of paying down the mortgages. Right now in my accumulation phase, I'm very risk tolerant, but at a certain point (Likely when I become FIRE) I think I will be a little more risk adverse. I am continuously debating whether it would be better to have 7 or 8 paid off properties generating a lump of my income, or if I should continue acquiring properties and having 10-12+ properties with a few mortgages. Honestly, I've been acquiring them at a faster rate than I expected, so I think I'll end up with 10+ before I really start focusing on paying all the mortgages off, and I think I could still have them paid off in a pretty timely manner considering the low cost of most of the properties I'm getting.

coldestcat

  • 5 O'Clock Shadow
  • *
  • Posts: 5
  • Location: sacramento
Re: One week in.
« Reply #18 on: August 08, 2017, 11:27:42 AM »


Thanks for the advice, that definitely makes sense now that I think about it. Although, our current home is a condo that we are house hacking so we are planning on moving out within the year anyway. But, I guess keeping it a 30 year mortgage will help the house cash flow a little more per month, which would be useful for reinvesting in more RE in the area.

Also, the first things I did was just cutting some fat off in areas that were easy. We didn't really use the cable, and our hot water was to the point of scalding. I think that once you have the epifany of FI, you realize that most of your spending is unnecessary, and the things you've been meaning to trim anyway become much more of a priority to get the ball rolling. But I'm always open to advice.

Ive been on the boards and reading articles for a few weeks but never read the term house hacking. Is this a real term?
Glad I read this thread!

RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #19 on: August 08, 2017, 11:53:40 AM »


Thanks for the advice, that definitely makes sense now that I think about it. Although, our current home is a condo that we are house hacking so we are planning on moving out within the year anyway. But, I guess keeping it a 30 year mortgage will help the house cash flow a little more per month, which would be useful for reinvesting in more RE in the area.

Also, the first things I did was just cutting some fat off in areas that were easy. We didn't really use the cable, and our hot water was to the point of scalding. I think that once you have the epifany of FI, you realize that most of your spending is unnecessary, and the things you've been meaning to trim anyway become much more of a priority to get the ball rolling. But I'm always open to advice.

Ive been on the boards and reading articles for a few weeks but never read the term house hacking. Is this a real term?
Glad I read this thread!

House hacking is a technique where you buy a property, fully aware of the fact that you are planning to move out in a year to rent it out. The benefit being that you qualify for better financing if it's your primary residence. BiggerPockets and Coach Carson are very useful resources if this interests you. I'm planning on making a blog post about it in the future, but nothing in depth written up yet.

Roboturner

  • Bristles
  • ***
  • Posts: 434
  • Age: 28
  • Location: Colo-RAD-o
  • No Snacks, Just Math
Re: One week in.
« Reply #20 on: August 08, 2017, 11:56:56 AM »
Lowering my A/C and save money... witchcraft
I assume you meant raise the temperature

Don't burn yourself out in 5 days this is a long game

Lowering the A/C usage, by raising the temperature. But rest assured, I've got the long game in mind. Thanks for the advice though. I'm currently scouring through the forums to see how many things I hadn't thought about yet.

I think the biggest needle-mover for most people will be cutting out restraunts/bars in favor of good ol cooking
"I win again, just like always!"




boarder42

  • Walrus Stache
  • *******
  • Posts: 5280
Re: One week in.
« Reply #21 on: August 08, 2017, 05:04:29 PM »
One Year Update:

Still going strong. My wife and I have been maxing our 401k, and Roth IRAs. I sold one of our unnecessary cars (we had three...don't punch me, I said I got rid of it) and ended up making a little money on it. And I had bought a 2012 VW Golf TDI for $9k before we found MMM and ended up getting $23k for it. (recalled from dieselgate) and replaced it with a 2007 Nissan Versa with 150k miles for $2k. I've been riding my bike daily, so I'm putting very few miles on the car. We have purchased two rental properties (a condo and a duplex) with plans for 1-2 more before the year is up. And we are in the process of selling our first property (I can't wait to be rid of this leech. 1500/month with mortgage and HOA, would be lucky to rent it for 1200.). My wife volunteered for temporary relocation for a work project, so she got a 10% bump in pay, her employer is paying us an allowance for rent (which of course we are pocketing the excess because we found a cheaper place), and they are paying per diems for both of our food. So we are coming out ahead on being flexible and willing to move. Our next goal is once we sell the terrible property, to put the profits into another property, once we have 5 individual properties we will use the mortgage snowball strategy and pump all the profits from the rentals into paying off one mortgage at a time. At that point we will assess the rental income vs our yearly expenses and purchase a few more properties if needed. I honestly think we could pull the trigger on RE before I'm 30, which will be 4 years from now.

I do want to say that the forums have had a huge impact on the progress we've made. I haven't posted a ton...mostly done a lot of lurking. And I've been a little more active on the facebook groups recently, but they don't hold a candle to the invaluable information on here.

good work.
not paying down your rentals in a mortgage snow ball and either investing in index funds or more property will lead to a faster FIRE.

I'll look into my options when I get the properties, but right now, my return would be better with paying down the mortgage on one of my properties. I owe a little over $30k and at that point without my mortgage the current rent will net me ~$225 more a month. If I invested that $30k the 4% SWR would net me $100/month.

this is an incorrect way to think about the math.  you have to consider the full return on the 30k + the return on the house after the mortgage.

Sorry, I misread the part where you said I could purchase more properties instead of paying down the mortgages. Right now in my accumulation phase, I'm very risk tolerant, but at a certain point (Likely when I become FIRE) I think I will be a little more risk adverse. I am continuously debating whether it would be better to have 7 or 8 paid off properties generating a lump of my income, or if I should continue acquiring properties and having 10-12+ properties with a few mortgages. Honestly, I've been acquiring them at a faster rate than I expected, so I think I'll end up with 10+ before I really start focusing on paying all the mortgages off, and I think I could still have them paid off in a pretty timely manner considering the low cost of most of the properties I'm getting.

10-12 with mortgage would be lower risk. As you have a large diversity of property.
PM me about how to save 6% on your annual grocery Bill!

There is a 35k starwood bonus right now as well. PM me for the info.

YYK

  • 5 O'Clock Shadow
  • *
  • Posts: 12
  • Location: Scattered disc
Re: One week in.
« Reply #22 on: August 13, 2017, 02:21:38 PM »
Zero to FIRE in five years, badass!

nouveauRiche

  • Bristles
  • ***
  • Posts: 285
  • Location: HCOL - USA
Re: One week in.
« Reply #23 on: August 16, 2017, 10:47:09 AM »
RRR - so glad you came back with an update.  Great to see you rocketing toward FIRE.


RethinkTheRatRace

  • 5 O'Clock Shadow
  • *
  • Posts: 39
    • Rethink The Rat Race
Re: One week in.
« Reply #24 on: August 17, 2017, 09:09:53 AM »
Zero to FIRE in five years, badass!

Thanks man! We are super excited to hit FIRE. The goal once we hit it is to pull a Go Curry Cracker! and move over to Europe for an extended "vacation". My wife has family in Cyprus and her grandparents have a MIL apartment at their place that they'd be glad to let us stay in so we are planning to use that as a base for other travels in the area. The more I think about it, the quicker I want to get there haha!

RRR - so glad you came back with an update.  Great to see you rocketing toward FIRE.

Thanks! I'm sure from my initial post, most people probably thought I was going to last a month before I fell off the wagon. There are so many unorthodox ways to cut costs. Had you told me last year that I was doing some of these things and still happier than ever, I wouldn't have believed you.