How We Retired Early With $540K At 40 In Colorado

I started diagnosing myself with some pretty serious medical ailments. I began to realize that I had been working towards a retirement that I might never enjoy. We just knew we wanted to have the freedom to make our own decisions with our time. And that's where financial independence came in. Then it became how fast can we do this? Let's do it as fast as we can. We started accumulating real estate with the goal of having an additional source of income outside of my job. We accumulated 19 units in the period from 2016 to 2019. I'm Debbie and I'm Chris. We are 43 years old, we live in Colorado and we

retired

at 40.

I never wanted to be a millionaire. That was never a goal, even, you know, now that I'm in my forties, I just wanted to have enough money to be able to pay my bills. When I was 21, 22, somewhere in there, I remember reading The Millionaire Next Door. It was eye-opening for me because the stories that were highlighted in that book were very similar to what we do. Once I realized that maybe I could be a millionaire, I became fascinated with the idea of ​​being a millionaire in both healthy and unhealthy ways. Once Debbie left her job, we are now completely dependent on my job.

Honestly, I'm sure there was more to it than this, but I tell the story that I basically stopped going to Subway. Obviously, that's not the whole case, but that's all it really feels like. Once we started controlling our spending a little better with budgeting, I was the guy who was always trying to get our spending under control. Chris used to think it was fun to try to spend $100 a month on groceries and just eat what came out of the pantry. So we both thought: What if you want to quit your job one day? That thought easily turned into how can we use our money to buy more time?

I mainly heard a lot of stories about rental real estate. Some people were building mega-empires with rental real estate. I wasn't looking to do that. I just wanted to have additional income. And in the process of going from knowing nothing about owning and owning real estate to purchasing our first property, I searched the internet and spent a lot of time listening to podcasts, watching YouTube videos, reading blogs and forums. And we got this kind of eight and a half by eleven vision board. So it was something we could write on with chalk that we had in our kitchen that would remind us of our goals.

And as I was writing those goals, I think by the end of 2016 we were going to have two properties and by the end of 2017 we were going to have four properties. We got properties that other people didn't want. There was something a little bit ugly duckling about them. For me, a very difficult part of this was a lot of effort, fixing the ugly things, working on the houses, removing the smoke, the smells, painting everything, tearing out a lot of floors. I'm spending full days there. Chris is leaving work. He spends nights and weekends at these rental properties to prepare them for tenants and make them pleasant places to live.

And while we were doing it, I still save between 50 and 60% of our income through my salary. All the extra money we didn't spend from his salary went to buying more rental houses. All of the cash flow we made from rentals went toward purchasing more rental homes. We accumulated 19 units in the span of 2016 to 2019. So it was a pretty fast and furious four years. In fact, we ended up burning down at least three years earlier than we had projected. Therefore, the gross income from our rental properties can vary depending on vacancies, capital expenditures, rehabs, repairs and that type of thing.

But it is between 8 and 10000 per month and our net income from our rental properties is between 4 and 6000 per month. So the money we live off of comes exclusively from our real estate investments. We have mortgages on all of our rental properties that we consider commercial debt. Our tenants essentially pay those mortgages for us, and rents continue to rise as they do so as the mortgage goes down. Right now, our investments appear to have about $350,000 in a mix of traditional IRAs and Roth IRAs and a brokerage account, $35,000 set aside in a 529 account for our daughters, and another $20,000 in bonds.

The insurance you sell for one month a year provides that extra cushion of security or comfort, plus some other discretionary expenses. Our budget now in FIRE looks a lot like it did before FIRE in that none of our categories really went in a different direction, except for travel. We generally have about $10,000 in our travel budget over the course of any given time, and that's more than we spend. Instead of having a job where I would work 48 weeks a year and have four weeks off, now I would say I work probably four weeks a year and have 48 weeks off.

And we discover in our lives that meaning and purpose are important to our physical and emotional health. And part of that has to do with work. We really enjoy having this freedom of time to make connections, travel and explore. Our daughters are getting older, whether we like it or not. They will graduate and I am excited to be a part of their lives as they move into their next chapters and will have enough time to be able to be in their lives as much or as little as they allow us. as you feel comfortable. I think when we were looking for financial independence, what we wanted was freedom and independence from having to go somewhere and do things that someone else told us to do.

And we still want that and value it. But I think what we find through it is a much deeper, fuller, richer life.