Early Retirement: is it all it’s cracked up to be?

Early Retirement Cons Downsides FIRE Financial Independence http://jessicacoaches.com/2017/08/early-retirement-downsides/
Early Retirement Cons Downsides FIRE Financial Independence http://jessicacoaches.com/2017/08/early-retirement-downsides/

Early Retirement.  No doubt, you’ve seen the pictures with people doing leisurely activities, kicking back their alcoholic beverage of choice,

a gorgeous view of a Caribbean beach,

or even more simplistic, a person looking like they don’t have a care in the world.  

Ahh retirement, I want that now!

Why yes, I’m tired of trading my time for money!

Of course! I do want to spend more time with my loved ones!

Less stress and more time to nurture myself? Sign me up!

 

You might be delving into this world on the internet.  Everyone is talking about this, it even has a catchy acronym!  FIRE! After a quick search, you find endless blogs.  So many people are doing this.  I can too.  I just have to put my nose to the grindstone for a few years, and it can happen.

Related:  What is Your Financial Mindset? Are you FIREd up?

The Reality of Working to Retire Early.

But what does that look like?  Everything has cons.  If it were easy everyone would be retired right?  Is everyone not doing this just because they do not have the information?

Not to mention that if you are motivated enough to bust hump to retire early, it is unlikely all your days will be spent relaxing sipping pina coladas post retirement.  Likely you will just work on a different passion project.

It can be a marriage/relationship ruiner:

So you talk to your significant other about early retirement, they could be instantly wanting to know more, or they might just think you’re crazy.

Let’s spend close to nothing, get rid of everything we do not need, invest over 50% of our income for a few years so we can have freedom then.

Who wouldn’t be on board?

In fact, plenty of people do not want the intensity of early retirement.

They might have no desire to scrimp and save.

Their desire for consumer goods may just be greater than their desire for freedom.

Or perhaps, they just like their job and have no problems with working that to 65 or beyond.  They worked for a long time to get their position and have no desire to give it up.

Money is the biggest area of discord in relationships.  At the same time, working towards early retirement can be one of the most drastic monetary changes you can make in your life.  Those two things can spell trouble.

 

How much it changes your life depends on what your mindset and situation were like before starting on the path.

 

Even in the better outcomes, when you are both on the same page, it can be stressful on your relationship.  You tend to work a great deal more to achieve these things, doing side hustles, overtime at work, and financial research.  This means less time for your partner, and if you do not take care of your relationship, it can fall apart.

See:  Six Rules for a Successful Relationship

You can end up living for TOMORROW instead of today.

You know the old saying “Take time to smell the roses!” people who are working on early retirement sometimes have a hard time achieving this.

Things you want to spend time doing will fall by the wayside to be filled with all things money, figuring out how to save more, make more, and get the best return on investment.  Side hustles can become huge time-consuming endeavors.

This is all time you will not be spending on other things.  Many people while striving for early retirement decide to put their health or other things on the backburner because they plan to focus on it fully as soon as they are free and without a job.

When you have this big goal line ahead of you, sometimes you can put all our focus into getting there.  With early retirement, there is this shiny opulent goal of doing whatever I want.  If I just forgo eating out today or going on a trip this weekend it will get me closer to where I want to be.

 

Getting to Retirement can take a lot longer than you expect.

Unfortunately, the path to financial freedom can be a longer path than some blogs are advertising.  I have seen some boasting it only took them 3 years or headlines on how to have enough income to quit your job in a year.  Which can be done if you already are in a great starting place or you take some huge risks.

If you already have a great deal of debt that is not solvable by selling an asset, or if you are starting off with a low income earning potential.   It could take a lot longer.

For me, this is the 6th year of stressing myself out for the cause.   While we have taken some time to smell the roses, it has been to far and few between.  These years have taken a toll on us, and we go through periods of being utterly wiped out.  I just recently had a three-month turtle shell regrouping.  We are however close to that finish line.

See: I never have to pay into my retirement again!

 

Are you working on early retirement?  What have you had the hardest time with?

House Hacking: Lets You Get Your Housing For Free

This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎
This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎
This Hack lets you get your housing for free by having someone else pay for it, house hacking. investment, property, rental, rent, life, hacks, invest, fixer, upper, income, property http://jessicacoaches.com/2017/05/house-hacking/ ‎

No, this is not about marrying rich! This is a real solution to make living expenses more manageable, or even make money. And while this is not about getting a sweet sugar mama or daddy to pay your rent, it is having someone else pay for it.

Your renter.

What I’m talking about is commonly referred to as House Hacking. House hacking is when you buy a property with the intention of renting out units or rooms to people to pay for the property. The HGTV show Income Property often makes a reference to this when people are making a rental unit in their basements and such.

 

If you are in need of more immediate housing solutions, I would like to point you to https://portal.hud.gov/hudportal/HUD?src=/topics/rental_assistance

 

I have been house hacking for the last six years. What we do is purchase a home, we have a family, so we aim for multi-unit homes. We keep the property prices low as we don’t have a huge income and have lots of skills by buying fixer uppers, usually living in the unit we are fixing up. Right now we are living in a duplex, in the larger of the two units: a three bedroom two bathroom. The other unit is a two bedroom 1.5 which is completely separate is paying the entire mortgage. Pretty sweet right?

Related: How I never have to pay another penny for my retirement at age 34 on a 30,000 per year salary!

It gets better, once everything is fixed up we find a new property and do it all again, renting out the other property fully.

Examples of house Hacking situations:

–  Buy a 3 unit property, live in 1 and rent the other two out.
–  Get a large single family home with four bedrooms, you live in one bedroom and rent the others out.
–  Purchase a house with a guest house or basement that will function as a rental to help cut costs on your large residence.

Pros:

 

House Hacking allows for low-income investors to squeak into the investment property world. This is because the rental property will qualify for owner occupied loans with down payments of 3.5%-5% as long as it is four units or under.

Related: How to Buy a Property With No or Low Money Down!

It can lower your expenses, allowing you to save more money to invest in yourself. I do love it when other people pay my mortgage!

You are close to your tenants, so they tend to behave better, it is also convenient being your property manager allowing for more profits.

If you buy a fixer, you can live in a unit that needs to be fixed up and slowly do the renovations. No driving to the site. No lapse in rent during a renovation. Improve slowly, or by the room, as you have the money to do it, the only one who has to suffer a construction zone is you.

house hacking construction zone

Cons:

You will be living next to your tenants. For some, this can be awkward.

You may be giving up the privacy that having a whole lot between you and your adjoining neighbor provides.

Have you ever lived in a construction zone? While amazingly rewarding, there is nothing like building something to make you feel accomplished. It is stressful. There is always something to do.  In fact, that half done project might be right in front of you while you are trying to get some relaxation in. It also always tends to take longer than you expect!

 

Advice for first-time house hackers:

If you are going to get a fixer upper, and do the work yourself, try not to be too ambitious, stick to surface problems and properties that do not need to be gutted.

Get rid of your mortgage insurance by forcing appreciation with improvements. You can do this once you feel you have 20% equity. You can either refinance or try to get a reevaluation from your current lender, and they will likely want an appraisal.

Just because you are living in the home does not mean the numbers do not matter! Plan for possibly turning it into an investment property in its entirety. You still want a cash flowing property. When evaluating net income just use a fair market rent for the unit you will be living in.

 

Do you Have any experiences house hacking?  Would you recommend it?  Planning on trying it?

How to get an amazing deal on a car!

How to get an amazing deal on a car truck or vehicle schoolie school bus public auction budget frugal conversion foreclosure cheap find http://jessicacoaches.com/2017/05/how-to-get-an-amazing-deal-on-a-car/

 

How to get an amazing deal on a car truck or vehicle schoolie school bus public auction budget frugal conversion foreclosure cheap find http://jessicacoaches.com/2017/05/how-to-get-an-amazing-deal-on-a-car/

Financing a car is one of the biggest, most common, money mistakes people tend to make.  Not only does it come with a hefty monthly payment on a depreciable asset, where you will pay a ton in interest making that car cost way more then what you ‘paid.’  High priced, new, and/or financed cars need way more insurance on top of that.

 

Want to avoid wasting your money, like a boss, and get a great used car in cash for a deal?

 

I love value, and I love sharing the wealth even more.  Here is my list of how to get a smoking deal on an automobile, some I found on my own while others were followed up with the caveat of don’t tell anyone I don’t want the competition.  Ooops.  Why do they not want the competition? They are making money off of buying and selling cars, trucks, and other things this way.

 

 

General Information for researching a car’s worth before you bid or make an offer, these websites have used car sales as well, but if you’re looking for a deal look elsewhere:

 

Kelley Blue Bookhttps://www.kbb.com/
NADA Guides – http://www.nadaguides.com

 

 

 

Government Surplus.  The government sells a lot of stuff, usually in an auction format, they do so in different places depending on the state and the department selling the item.   There are many people whose sole business it is to swoop up deals and resell things on these sites.  Including many vehicles. Some are government vehicles which have aged out due to various reasons as a standard age or mileage retirement.  Government Vehicles have meticulous upkeep records and have been well maintained; they also tend to be upfront with conditions and known problems.  They also sell confiscations and insurance write-offs.  This is also the best place I have found to look for school buses, public buses, for conversions such as schoolies for you minimalists out there.

 

MuniciBid – https://municibid.com/

 

 

worldschooling

 

Lender Repossessions.  Many times a lender ends up with a vehicle that they do not want, just like home foreclosures and REOs, these exist for automobiles too.  I have found quite a few shady websites in regards to this option, so exercise caution.  I advise you to go directly to a local bank or credit union website or call them to find these deals in your area.

 

 

Local Live Auctions.  Sometimes people or companies do not want to deal with the headache of selling their used automobiles and turn to local automobile auction houses.  These can be a great place to get a steal on a  vehicle.  The ones that I have been to have a preview day where you can poke around all the cars and then a bidding day.  A quick google search in your area should help you locate some of these auction houses.   

 

 

 

Haggle or Scoop up a deal from an individual.  Do your research and watch for a deal to come up from the owner directly.  The pros to these are you can drive the car around and get it checked up by a mechanics shop before you make the leap if you want.  The con is not every individual is honest, try to play it by the facts.

 

Facebook Groups – Look for local swip swap, local swap meets, local marketplace.

 

How have your experiences been with using any of these methods? Do you have any I missed? Have you celebrated anyone’s smart choice lately?

 

What is Your Financial Mindset? Are you FIREd up?

what financial mindset are you, are you fired up, fire, attitude, early retire retirement financial independance

How are you doing?  Are you happy with your trajectory in life?  Are you worn out?  Are you bored?  Are you just going with the flow of life? Or are you on the opposite end?  Stuck overthinking everything.  Treading water.  Unable to effect the positive change you would like to see in your life?  Do you know what you want out of life? What do you actually need?

 

Wow!  That was a lot of questions! However, these are things you actually need to ask yourself every once in a while.  So you should really go through each one.  Get a pen and paper, or even just pull up a notepad.  If you are not doing it already, you should live purposefully.

 

A helpful way to go about it is to identify where you are now and where you want to be.  This diagram can give you an idea of where you at with your financial values.  What is the most important to you? Production? Security? Freedom?

 

 

Money Values Financial Mindsets FIRE Freedom Time Security Reliability Production remote worker independent contractor 9 to 5 job

Values:

Reliability/Security:  Financial security is an overarching theme.  They cannot afford to or do not to wish to take any risks on if they will have money coming in consistently.  They would prefer to know when and where the money is coming from then earn more with a chance of famine.

Time/Freedom: The most difficult to fit into a circle, because they are literally all over the place.  They will work but it generally has to be a thing they would choose to do regardless of pay.  Or, they will work in short stints and quit to do other things. They work to live, not live to work.

Production/Motivation: These people like to see results, be it a fat check or their name on a prestigious paper.   They tend to prefer situations where there is no cap on their growth.

 

So how many values are you actively working for right now? I tend to view it in a tier system, with only one value being worked towards being tier 1 right on up to tier 3.  Are you ready to move up or are you happy with where you are at?

 

 

So What is FIRE?

 
F– Financial I-Independance R-Retire E-Early

 

 

It is where the Venn Diagram of financial values meet:

 

  • You want to have security and know you will have the financial where with all to survive if you lost your ability to work today.  Not an ambiguous time in the future.
  • You want the freedom to do what you want today, While not giving up your future. Be it lounging on a beach or volunteering your time.
  • You value productivity and want to see results sooner rather than later.  You are looking forward to doing your passion project because you surely have several.

 

 

Okay, so it is all well and good to want all those things.  Some of you might say that seems kind of unrealistic, how would one even get there.  It is possible!  People are retiring early all the time, you could be one of them.  You don’t have to wait for the government or an employer to give you basic income to live off of, you can create one yourself.  And it does not have to take most of your life to create, the only limitation is you!

 

 

There are four parts to freedom-
– Earn More
– Need Less
– Use debt, don’t let it use you.
– Invest in yourself.

 

 

If this is a new concept to you or could use some honing in this category check out you should read this related article: Are you tired of worrying about money?

 

 

 

Wanna get there?

 

Habits of successful people who have reached or are working towards FIRE.

 

  • They absorb as much information as they can. (networking, books, podcasts, blogs)
  • They celebrate different milestones.  They view old inexpensive cars, or better yet no car as a sign that someone is successful instead of that shiny new car fresh off the lot.
  • They know that experiences are more valuable than things.
  • They believe in working hard today for a better tomorrow, and that it is a mission that never ends.
  • They take action.  They know things will never be perfect but do it anyways.
  • They surround themselves with other like-minded people and know that this can be the difference between the wind under your wings and a pair of concrete boots.

 

Are you FIREd up?  What are you working on right now?  Did I miss anything?

 

How to get a high paying job with no debt involved!

How to Get a High Paying Job No Debt Involved career, tuition, cash. scholarship, cheap, student, loans, university, money, budget http://jessicacoaches.com/2017/04/how-to-get-a-high-paying-job-with-no-debt-involved
How to Get a High Paying Job No Debt Involved career, tuition, cash. scholarship, cheap, student, loans, university, money, budget

I like options! When I graduated from High School I had pretty much been told you are going to languish away in a food services job or go to college for a four-year degree. I was also told there were three routes to do this, rich parents, debt, or scholarships. However, it turns out some food services jobs pay more than the job you might get after four years of studying.   There are also so many more options to get a good career and so many more routes to get you there without going into debt!

***Note: I am a strong proponent of the gap year, where a person travels for a year after high school so they get an idea how the world works and how they would like to fit into it.  It does not have to take a lot of money to travel.  If you are interested, check out: 9 Tricks to Make Travel Cheap!

High Paying Careers with Training Included

 

-Apprenticeship
Want to get paid to go to school? It is possible. Apprenticeships, often called the other 4-year degree are an oft-overlooked program. How it works: You start off as a paid apprentice in a field, you work a regular work under more advanced workers, slowly advancing, there is usually some course work they will provide, you advance in the program, usually gaining in wage and title until you are considered at Master. A good place to start is the United States Department of Labor or a simple google search of your area apprenticeship programs.
Not limited to:
Electrician: 60-70k a year
Lineman: 70-100k per year
Plumber: 50-60k per year

 

 

-Sales
Sales is a career path that does not take any education to enter, minus some states which regulate Real Estate Sales, but even that is small. The pro and con of it are all based on you and most of them are commission based. There is uncertainty in the beginning, and for some used to getting a steady paycheck, it can be a difficult adjustment. Once you get experience and a proven track record, you will always be able to find a job, some positions up the food chain even have base salaries plus commission.
Salesperson: 0 – ???k per year

-Become a Driver
While not in the highest earning income bracket, this is a very good wage for no experience and they often will pay for you to get your Commercial Drivers Licence so you can do the job.
School Bus Driver: 30 – 40k per year
Semi Driver: 30 – 65k per year
Heavy Equipment Driver: 50 – 70k per year

 

 

-Emergency Services
While these careers arguably deserve to be paid much more, they are a well-paid profession that requires no education with all training provided. There are also many unseen benefits to belonging to the emergency services groups that do not come in the form of salary.
Firefighter 30-80k per year
Police Officer 40-85k per year
Emergency Dispatcher 20-45k per year

-Start your own Business
The range in this is huge, from people never getting off the ground to people making millions. This is where the buck stops with you, so your motivation will determine if you fail or succeed. Some inexpensive ways to venture into owning your own business are a service based industry. You can freelance any skills you may already have like writing, designing, tutoring, or photography.
Business Owner 0 -???k per year

 

I want to go to school for **INSERT CAREER** but I don’t want to go into debt what are my options?!

***Note: Please make sure you will find the career worth it, many degrees today don’t really get you very far. Also make sure it is something you will enjoy, try to shadow or volunteer in your field to get a better perspective of what life would look like. For a Top 100 list of jobs factoring in more than just salary see: http://www.careerprofiles.info/top-100-careers.html

-Get a job at a university for free tuition
At many educational institutions if you or an immediate household member work a job eligible for benefits you get an education for free. Many large colleges have all sorts of entry-level jobs that are benefits eligible.

-Get a job that will pay for your education
Some companies have benefits of paying for their employees to get degrees in related fields. Make sure to check your benefits packages to see what you might be eligible for. There are also some companies that will pay off your debt with a commitment to work for them, again this is by the employer so make sure to look for it.
Monster.com 5 Top hospitals that will pay for your education
businessinsider.com Companies that will pay for your tuition

-Get a scholarship when you pledge to work for an underserved population
Medical professionals can get $50k or $120 in scholarships depending on the level needed if they make a commitment to work in an underserved community for two years. More info: https://nhsc.hrsa.gov/

 

-Scholarships
There are a ton of scholarships out there if you are willing to apply for them. Some are more complicated than others. More info: https://www.studentscholarships.org/

-Attend a school that will not charge you a tuition
Yes, they do exist. Some do this to promote specific occupations, religious teachings, or to offer free programs to low-income students. A great resource is: http://affordableschools.net/20-tuition-free-colleges/ however, it is an incomplete list, there are others. Make sure to check any schools you are interested in for programs they might have.

-Military
If you have served in the military or it is something that would interest you, there are programs for education assistance after you have served. See: http://www.benefits.va.gov/gibill

 

Did I miss any?  Have you been in any of these professions or used these techniques? Were they worth it?

What everyone should know about being a Realtor, from one.

What everyone should know about being a realtor, salesperson, agent, houses, sales, home, tucson, az, arizona, salary, education, information, expect http://jessicacoaches.com/2017/04/what-everyone-should-know-about-being-a-realtor-from-one/

Jessica Deratany a licensed Realtor with Tierra Antigua Realty.

I love real estate.  I listen to podcasts about real estate for fun.  When I have access to cable television I will choose HGTV, Income Property is, of course, my favorite! I love touring houses, especially the really old gross ones that can be transformed into something beautiful.  I have been involved in many complete renovations and even a new build.  I have become very skilled at most things it takes to renovate a home, construction, and design.  I love negotiating a deal.

Real Estate is kinda my thing.

So, I decided to get my Real Estate Agent License, the entry requirements seemed pretty low in Arizona, and we have some of the higher requirements in the US.  Minimum of 18 years old, 90 hours of licensure course, background check, and pass a state and school.   All in for the license I was looking at under $1000, for a career with unlimited earning potential what a steal!

 

real estate agent giving couple their dream home keys

 

So I enrolled in a local quality school.  It became very clear that with a few exceptions the bulk of the course was about legality.  I enjoyed learning all of it, but there was a theme throughout the course that troubled me.  Refer out most knowledge, do not give opinions on most things to avoid fault, and full disclosure of any facts you do get. (Which most often seemed to be in a huge page that people would skim because of so much legal talk.)

 

Okay, Okay, I get it, my knowledge about anything other than real estate sales and marketing should not be used in this.  I passed the test with ease.

 

Then I started looking for a brokerage to work for.  This was very eye opening; the big companies straight up wanted half of everything I made.  This was usually till I had paid them up to some cap which in our area was around $20,000.  I also had to pay for all my consumables, marketing, insurance, MLS Access, associations, and necessities.  I managed to find a more human, charitable, local brokerage company, Tierra Antigua, which didn’t seem like my wallet was their bottom line.  So they are out there! However, it had become very clear, very fast that I was now a walking milkshake and everyone had a straw.  

 

 

 

 

It got worse.

 

I was thrust into an environment that was all about how to close.  Everyone who spoke to me, save a few, just sounded like a predator talking about the kill.  Sales is an intense world.

 

So where did that leave me? A person who wants to tell people:

  • Buy a house that makes you money, and never to buy one that would not rent for a good chunk higher than your mortgage. See: 4 Ways Real Estate Investing Could be Making You Money Right Now!
  • Selling your home is costly, and if you’re hoping to make money and not just break even or lose money in real estate, you need to hold on to that house as long as possible if there has not been significant forced appreciation (Owner fixing the house), or market appreciation. (Your neighborhood prices are skyrocketing.)
  • That the big American dream home is an unhealthy obsession and provides a lower quality of life.
  • That signing an agreement with me locks you into a decision for a period of time, and I like choice?
  • That house while pretty on the surface could be a potential nightmare, for this, this, and that reason.

 

Honestly, if my being a Realtor were our main source of income, I would have a quit a while ago and used my Real Estate Salesperson Licence for one of the other many jobs it affords; or maybe sold out and hustled?  I am not a shark, nor do I fit in with them. Perhaps, if I felt more positively towards American consumerism, it would be a better fit for me.  Right now, I keep it to help friends, family, or maybe someone who wants be told what they need to hear instead of want.  But, sadly, they do not seem in high supply.   The access to the MLS is also a great perk, as we are investors ourselves, and it is an amazing tool.

 

 

What is your experience with Realtors?  If you are one, have you experienced the same thing?