Monday, September 2, 2013

My 7 Year Plan-Owning the Bucks or Retiring Early

About a year ago I wrote on how I believed Dave Ramsey was a genius, but I wanted my own plan, the Automatic Plan.  I’m happy to report I’m following my own steps pretty well.  I know where my money is going, I have everything set up to savings (I manually pay extra on debt with this amount, not as automatic, but it feels great), and investments. Credit cards are gone, I make payments to my student loans (which I detest), and in a combo deal we are also working towards paying off our home early from rental income.  So as of right now I am on step 4 and I am charging ahead. 

What I mentioned in the notes was “My 7 year Plan” but I never really talked about it.
Automatic Plan
  1. Figure out Where all of your Money is Going
  2. Make things Automatic-Debt, Savings, and Investments
  3. Make paying off Credit Cards a Priority
  4. Add additional payments to the Debt you like the least
  5. Pay off home early
  6. Make sure you and your loved ones are taken care of
  7. Build wealth and give!

I always thought I wanted to be a millionaire, own yachts, the Milwaukee Bucks, and own houses all over the world.  I soon came to realize this takes a lot of hard work throughout your life, plenty of time, and some luck. Do I always want to be grinding it out looking for that next deal; do I want to be 60 or 70 and just now ready to enjoy my retirement?  That just doesn't sound that great to me.   I love to travel, enjoy a morning coffee or evening beer in different places, I love Chicago March-November, but winter gets old pretty quick. So I decided that the best way to truly have the option to do what I want at an early age is to be debt free and have passive income. 
So being on our automatic plan and having 2 houses that provide rental income, we have a plan to complete our 7 year plan and well RETIRE!!!  So I have student loan debt, which I am working on.  We have 2 houses, one which we live in, both receive rental income.  I am tackling the student loan debt, while we take the extra rental income and pay off each house as quickly as possible.  I ran some rough numbers  a few months ago and figured out if we took what we made and the rental income we could pay off both of our houses in 7 years!  I got pretty excited, because then we would have $0 debt, 7 years worth of investments in stocks(401K, Roth IRA, Individual  Brokerage Acct), and passive income from 2 houses.  So based on everything we would have $0 debt and 2 passive incomes coming from rental income.  

We could retire/semi-retire/do something we really like to do whether it’s volunteering or making 100K, so I would be 38 and living on a small income with my wife, available to travel freely which we really love to do, Miami could be our base home(happy wife, happy life), I could visit friends and family for weeks at a time(your couch will be my couch, your guest bedroom, my bedroom).  I could travel to Nicaragua(shown on the right) and hang with the wife’s family, maybe see if I can be a beach bum for a week, go to every single college basketball game in a 50 mile radius for a month, play golf with my Dad every day for a month, I don’t know but that sounds EXCITING to me!!!!  My goal is to make it work, little step by little step, sprint by sprint, paycheck by paycheck, I hope you will join me on the ride, because in many ways you already have by reading a blog or two and of course this one.