Sunday, December 29, 2013

Why this is a Retire Extremely Early and Paleo Lifestyle Blog

As you have probably seen in a few posts previously the overwhelming direction of Finance and Fitness Dreams entails two distinct directions,  Retiring Really Early and the Paleo Way of Life.

Many of you might think this is pretty interesting or many might think I'm crazy.  Good news is I'm OK with either one.  I don't want to be normal, I have absolutely no desire to be 45 and working in corporate America waiting for the day I can retire and "enjoy my older years".  One of my favorite quotes is "youth is wasted on the young". Why not retire at 30, 40, or 50?  Think of the things you would be able to do with your free time:  visit family, volunteer at a non-profit, maybe travel.  I'm not sure what your dream is but mine is many of these and more.

I'm on my way to retiring in 7 years. The concept is simple, have a passive income(non 9-5 job) that is greater than your monthly spending.  If you have 2K in income per month, well you better not spend a dime over that, whether you are traveling, buying groceries, or making a payment to the IRS.  Make more than you spend.  Crazy concept I know.  As most in there 30's are figuring out this is the  best income producing time you have had, so this is when you pile up savings and pay down debt.  We are currently on our way and our plan looks something like this in terms of year by year:

  • Year 1(the next 7 months for us)-Pay off Half of my Student Loan Debt, pay 33% of our Rental House Off, Pay Regular Payments on our current home, Contribute the Matching portion to our Roth 401K and 401K(Year 1-7), Contribute personal savings to a personal Stock Portfolio(Year 1-7)
  • Year 2-Pay off Student Loan Debt, Pay 33% of our Rental House
  • Year 3-Pay off our Rental House(creating a Passive Income Stream in Year 4).  At the end of year 3, based on a tight budget we would be able to retire, since the income from the Rental House and our Current Home(paid for with rents coming in) would satisfy our current costs.  But to say it would be tight would be an understatement and I don't think that's my dreams to be living on a tight budget, it would take away some of the very things I want to do with my retirement.
  • Year 4-Reevaluate our current situation, time frame, pay off schedule, and goals.  Pay 25% of our Owner Occupied Home
  • Year 5-Pay 25% of our Owner Occupied Home
  • Year 6-Pay 25% of our Owner Occupied Home
  • Year 7-Pay 25% of our Owner Occupied Home and be Debt and Mortgage Free
So this puts us in a situation where we would have the option to retire.  We would live off what is considered the average household income in America.  We would need to budget for the every day expenses of groceries, utilities, etc while making sure our taxes, insurance, and health care were included in this.  After those few expenses everything else would be used to do the things we find retirement worthy.
During these 7 years there will be bumps along the road, but I have put our 7 year plan on a very Ronald Reagan conservative(I'm not political, although I do think Ronald Reagan seems pretty cool for an old guy) approach, especially with the fact that I think this can be done in 3 years and the reason for an evaluation to see what we think is best.  Along the way we may beef up our HSA Savings or Retirement Bonus of our 401K.  The strategy in year 4-7 may lean more towards creating an even larger emergency fund of all cash, possibly switching the investments to a larger portion in taxable versus non-taxable income.  This is the journey this is my path, I plan to retire early by using Rental Income.  Along the way I will read everything I can get my hands on from retire early finance blogs, books, and anything else that I think will bring me closer to my desired location, Retire Extremely Early!!!

I have chosen the Paleo lifestyle for many reasons but mostly because it yields results.  Recently I did the 30 day Paleo Challenge and was able to lose some weight and feel healthier, with items such as my Achilles being pain free, which is an amazing feeling from walking around every morning like you are 65.  Since the Paleo challenge I have been for the most part Paleo(minus Christmas, HoHoHo) along the way.  I am good not having Dairy, Legumes, and Pastas back in my diet.  The one exception is cheese, I'm from Wisconsin, that's against the rules.  I do keep the cheese to gluten free so usually Boar's Head or if I can find a cheese that is from Grass Fed Cow's then I'm in business.  So this week I am starting back with my Sprint and Relax Paleo.

I really believe eating right with Paleo and exercising(Walking my dog a couple times a day) is the way to health and feeling great.  So this week will be the week of the Chicken!  I will have a couple obstacles with work, new year's, and college basketball game, but will be a great test early.  My goal as of January 31st is to have less than 7 items that are not Paleo or at least Gluten Free.

I can't suggest enough to read up on eating Paleo.  If I could sum up Paleo I would say it's eating like your Grandma and Grandpa used to eat,  just more natural products, not processed or with a bunch of ingredients you can't pronounce.  Have you tried Paleo or thought about retiring early, let me know with a comment.

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