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This was one of our earliest investments property. Property value has gone up in this community and also next year HOA might go up a bit. Our tenant vacated the property in jan end so we planned to renovate a little bit and sell. We installed tile to living room and dining area and laminate wood for bedrooms. Fresh painting to walls, installed new faucets, black splash to kitchen, new lighting fixtures. We just finished everything on Friday and put the property on market. Appliances we had changed 3 years back with extended warranty. We plan ahead and buy and store things whenever there is sale or deals. Wood looking tiles we got for 0.69 , laminated wood for 1.09 last year on sale. Appliances we change during thanksgiving or Independence Day time because those times we get Lowe’s rebate + manufacture rebates + reduced price. For any major expenses we try to save as much as possible by buying gift cards in discount ahead. Lowe’s gift cards come in off like 200$ gift card for 180$, we buy and use those for major expenses, with that start away 20$+off + Lowe’s credit card 5% off.
First time I came across early retirement was when I was in 11th standard. Due to health issues my mother took VRS. Back then I didn’t knew VRS is an abbreviation of voluntary retirement scheme ♀️
Financial independence for me means getting out of the rat race and choosing how you spend your time, choosing what job you do not based on salary but based on enjoyment and ultimately it means living the rest of the life free from the pressure of relying on a salary to pay the bill. Retire Early means for me to escape from that stressful life, relax, travel, learn and do something which I love and always wanted to try. Planning for FI- Our rule is No debts. If we cannot buy it cash then we will not buy it. 1) Planning and targeting - we did targeted for a number and decided to move down to the place immediately where we wanted to settle. Usually, experts say it’s 25x rule and 4% safe rule. 2) Emergency fund - Kept aside 6 months of salary as emergency funds for purely health-related, any other family emergencies. 3)Saving and Investing as Priority - Every year both of us Invested in 401k, IRA, HSA till it maxed out. Every month we targeted to save 70-75% from our take-home salary and invested in CD,real estate, stocks and index funds. 4) Earn more and side hustles - Earning more allowed us to increase savings and speed up our financial independence goals. We always had housemates in our house. we did house flips, both fast and slow flips, Airbnb’s, Freelance projects, Bounty/hackathons, rental properties. Sell and resell everything and anything on Facebook marketplace, Craigslist, eBay, etc. We negotiated salaries, being a bilingual and having certifications according to market trend helped to find better jobs and salary 5) Living below our means- We stay away from consumer culture and lived a minimalist life. Finding Ways to Keep big Expenses Low - Car - Initially we bought a certified second-hand car which fits in our budget and low maintenance cost and gives great mileage. Then a few years back we sold that car and got a PHEV for that we got a federal rebate+local rebate+employee discount Insurance - staying with the same insurance for more than 10 years and bundling car and home insurance helped us to get a good discount. Be it a car, insurance, internet or phone by negotiating and bundling helps to bring down the cost. Housing cost- as soon we married we bought a condo which was fitting in our savings and we moved in that saved us rent/mortgage. Finding Ways to Keep small Expenses Low- Because I believe little things add up like Giving haircuts at home for both DH and me. Strict monthly grocery and budget plans, grocery shopping hackings, Couponing and looking for deals on most of the things which helped to save so much. No memberships/subscriptions. Smarter ways to save electricity bill(in 2018 we shifted to complete solar power). Saying no to invitations from friends and coworkers to fancy restaurants. Even if we travel for work/trips we preferred to take home packed food. Using a bike to work most of the day. DH mostly worked from home or traveled. Only on rainy days, grocery shopping, airport pickup drops, or any other work we took out the car, and also my workplace was 2.9miles from home then back then. We always believed traveling to work for an hour on daily basis doesn’t make sense because we consume a lot of time, energy, gas, car life. 6) Credit card hacking and other - Our less likely to engage in expensive credit card behaviors and use it mainly as cash back/ reward points earner. We just use one credit card(boa) for everything like online/in-store/gas/restaurants/HOA/insurance which gives 3.75%+ cash back, Lowe’s credit card only for home improvement projects which give 5% off, boa travel card for any outside USA use and united for flights. We have the habit of paying credit card bills on weekly basis which helps to scan all the charges and find out any suspicious charges. Along with this we always maintain fixed amount in our bank account to take advantage of boa’s preferred rewards program benefits, we use cash back apps for every online purchases and also we purchase discounted gift cards for major expenses. 7)Take advantage of Company reimbursement programs- Most of the companies pay telephone bill reimbursements to full-time employees or on projects support teams. Both had the option to either go with the company paid separate phone or use our own existing phones we chose with our existing phones so our phone bills were covered by our companies. Yes of course there is extra work that comes with that. Reimbursement programs for education/certifications 8)Travel Fund - Instead of considering travel costs in the monthly budget, we kept aside some amount regularly solely for travel made us to calculate and plan easier 9)Other costs- Every alternate year either we visit India or in-laws visit us. And also since we live in Florida.Tourist place. We have family, friends visit us often so we plan our monthly budget ahead and buy gifts ahead whenever I see good deals. We learned to be mindful of where our money was going and spending wisely by evaluating whether something was a need or just a want also kept more money in our pocket. The bonus was it helped us stop accumulating more stuff and taught us to repurpose already owned items.
@Flyhigher - kudos to you and your spouse for having the foresight to plan this out and the discipline to follow through. Many of us start thinking about retirement only when we are in our early 40s. Everything you explained revolves around this! I’m impressed with your sustained effort. In a world where everyone is constantly upgrading their lifestyles, it’s refreshing to see someone who has the strength to say no. I nearly fell off my chair reading about your 75% income going into savings. I was thinking hard for a number to give my DD for her investment goals and 25-30% came to mind. I can see her balk when I ask for 30% to go into a savings account. Every step of the way, when we earned more, we just upgraded our lifestyle. I’m awed by your tenacity. It’s so hard to say no to all that glitter! May your tribe increase. Your post is worthy of multiple FPs. I thought you were one of those company owners who got lucky and retired. Your story is of hard work and determination, of putting it together painstakingly. Very very inspiring!!!
This is what the Financial Independence - Retirement Early (FIRE) scheme promotes. Live uber-frugal, save, and invest. Tough to do when you have a couple of kids you want to dress up, go places, and enjoy things you couldn't when you were a kid. @Flyhigher - is amazing. Yes a tribal increase would serve them right!! For me, good Frugal behavior comes up as a part of New Year's resolution every year, and then there is usually a valentine's day in mid Feb. that destroys the notion. We can blame the coconspirator, who'd remain unindicted. There is a danger of addiction when overdosed on frugal. For people who have retired not-so-early, they may find: two old people at home, no more "durables" to buy, taste in consumables had been whittled down too much to recover.. Children are out in the world, far enough away (& have their own washer and dryer), bodies too darn weak to gallivant as before (eating, drinking, shopping, traveling & etc.) the required minimum distribution from 401K/IRA is too much money to spend, when frittering money away had been trained out of the system.
Kudos to you, @Flyhigher. Financial independence and discipline to do it largely depends on not keeping up with Jonases. Those who love minimalist lifestyle and are happy with less material stuff can save and enjoy the worry free life. We have two kids who have been in daycares, we dress well, travel, eat healthy food, no roommates, and no extra hustles- and still have been saving 50-60%. Our rule has always been to live on one income so if one of us lose a job/ wants a break, we can still keep our lifestyle. In early 40s, we can retire if we want but as I said in my other post, just got tenured and would love to enjoy this next chapter in our careers. I feel like retired, when the career and passion combines, it doesn’t feel like work anyway!
Thank you for writing this! Congratulations on your retirement! Except for side hustles, housemates, AirBnB etc. , we do all this! We also live in a touristy city and guests/ gifts do add up- but again it’s fun to host family and friends. My husband is a foodie. We do go out with friends but not constantly upgrading our lifestyle helps with spending money on what we enjoy!
