I never have to pay into my retirement again!

How I never have to pay another penny for my retirement at 34 on a 30,000 per year salary. Financial Freedom. early retirement travel money real estate rentals investment fire money http://jessicacoaches.com/2017/03/never-pay-retirement-again/
How I never have to pay another penny for my retirement at 34 on a 30,000 per year salary. Financial Freedom. early retirement travel money real estate rentals investment fire money http://jessicacoaches.com/2017/03/never-pay-retirement-again/

That is right, if I decided to hold all my current investments and not pay another cent into my retirement, I could retire comfortably at 65.  What is my secret you may wonder?  Well, it isn’t a secret, this is a proven wealth building strategy that has been used for a very long time.  The only difference from then to now is it is easier to get into the game.

Here it is:  I have someone else investing in my retirement for me.

 

I am a real estate investor.  In particular a buy and hold rental property investor.  What this means is, I buy properties with the intention of keeping it forever, and renting it out to others.  Not only are my renters paying my mortgage, giving me more net worth every month by paying my principle down.   They are also giving me extra to set aside for rental management, repairs, and cash flow which can be used now for life or to get to that retirement faster.

 

If we just held everything we have now at our current rents we would have $3,700 dollars of monthly income at 64 which is when our longest mortgage finishes at.  This is a conservative estimate, paying for property management, capital expenses (big repairs averaged over time), and vacancies.  The best part, rent keeps up with inflation.  So $3,700 today will be the equivalent in the market in 2047.  Which for us would be a very comfortable lifestyle for us.

 

 

So how did a family on a 30,000 salary start real estate investing?  Houses are expensive!

 

Our six-part strategy to fast tracking our retirement:

 

1. Finding a property that needed fixing up and getting a good deal.

 

2. Choosing a property that had at least two units so we could live in one and rent the other out to help cover our costs. See:  House Hacking: Lets You Get Your Housing For Free

 

3. We leveraged ourselves with owner-occupied, low-downpayment, mortgages.   See:  How to Buy a Property With No or Low Money Down!

 

4. We lived in the unit we were renovating doing as much of the work ourselves as possible.  

 

5. We went slow.  This is not a story of buying four properties in one year.  We have been at this for six years and have three multi-unit properties.

 

6. We managed our money, we didn’t let our money manage us.  See: Are you tired of worrying about money?

 

 

Lessons from our first rental property:

 

-Don’t over improve the property for the area.  When you are living in something you tend to fix it up for you, don’t improve it to your standards, improve it to just above the average standard for a rental in your area.  You will be more worried about what renters will do to your property, and you just don’t get the money back.

 

-Rental properties are a numbers game.   Make sure you get all the data and give yourself a conservative cushion to make sure it will be a profitable rental after renovations.

 

-Separate the electricity between the units if it is not already done.  It is just so much more hassle to provide utilities included!

 

-It is better to jump in on something you think is good, than wait for perfect. Even though our first purchase was not the ideal purchase, it still built us wealth and taught us an innumerable amount of things.  It was better to jump in with some basic knowledge than procrastinating finding the perfect property.

 

Now, I don’t have to invest another penny in my retirement, but I am going to! A retirement age of 65 seems so far off and I think with dedication I am going to try to retire before my husband hits 40, which gives us….. just less than 2 years.  Think we can do it?

 

Do you have rental properties? Or are you wanting to get in the game?

My 5$ Yard Sale Table Transformation: Lessons in Frugality

My 5$ yard sale table transformation: lessons in frugality

Table refurbishing in steps. Prep, Tile, Finish.

I consider myself to be a frugal person. I make almost all my meals at home, and I try to buy used, I get water at restaurants and never get the most expensive thing on the menu, I even cloth diapered. I love the value. If I find a good deal, it makes whatever I get that much better to me. Take this table I found at a yard sale, I had been recently looking online at entry tables and found them very expensive for what you could get. I refused to waste my money when I am handy and have done a lot of little projects like this; I enjoy them. I knew I could buy all the pieces and would get it done rather than have an old broken table sitting in my garage for months till I threw it away. I also had a little mission:

Last fall I was sitting on my computer much like I am doing now, in a comfy house dress with bare feet, it was the middle of the day, and my kids were napping. I heard a clatter outside my house and stepped out onto my porch expecting to see a stray cat and instead stepped into the scene of a crime. There stood a man, he looked to be in his early 20s, but he could have been much older based on the wear on him, he had a black dolly next to him, and he was holding a package of the tiles we were using in our most recent remodel. Here is where I learned my instant reaction is to fight not flight. I started screaming and started after him. The minute he saw me, he yelled some obscenities and dropped a whole package of my beautiful tiles on the ground. I chased him barefoot into the street as he ran and jumped into a waiting truck and his accomplice peeled away. I got the license plate. Those broken tiles are the ones I used to mosaic my new table.

My table took quite a long time to build, getting materials, several stages of work, it likely was not a cost effective task, when factoring in time. Had I hired someone they likely could have done the job better than me. However the intangible benefits were strong, I made that table a symbol of lemons to lemonade, and I enjoyed the process and letting my children help. If anything it was a character building experience. Maybe I’ve got it wrong and I should be in the table refinishing business, and instead of being the first thing you see when you walk into my house I should sell it.


Money Strategies, what blend are you?

A penny saved is a penny earned:
Everyone has heard about how that 4$ coffee you buy every day adds up over the year to over a thousand dollars, right? I am all for this as long as you are only diverting things you can do without in your life, and saving for things that matter to you. Your time is money, so it needs to be factored into how much something is costing you to the get the benefits. If you can do something but would make more money doing something else, you are losing money doing something yourself. There was a time I got really into mom blog giveaways and sweepstakes. I just loved the free stuff I would get in the mail, however, after a few months of this I tallied up an average hours spent scouring for giveaways and entering them. Then I looked at the monetary amount of everything I won, including the things I would have never had bought if not for them being ‘free.’ After a little math, I found that I was working a 5$ an hour job. While not my wisest move in life, it was, however, fun winning prizes!

Spend money to make money:
There is truth in this statement, but it must be moderated. This statement is mostly used with the entrepreneurs. The catch is with any business ventures there are a lot of risks. The risk that the business does not work out or that you fizzle out before the idea even comes to fruition. I have had several business start-ups end up in a box in my storage. The main thing that will make your business succeed is you, try to scale yourself slowly up especially if you have never run your own business before. You don’t need to start out perfect or doing everything at once. Ease in, see if things you are spending are getting are getting returns, then move up.

Money does not matter to me:
There are those who just do not think about money all that much. This is, where the do what you love, and the money will come movements live. Money does not make you happy. Live in the now not in the future. I have to admit some of the best times of my life were those that I did things completely irresponsible just because I wanted too. In fact, in all my world travels I would say the poorer the people, the happier they were in general.

How to be Smart: When Everyone Wants Your Money!

road-sign-464653_960_720Now while some of us are not very aware of our inner caveman, advertisers and con men hone in on that instinct-driven part of your brain every day.  They know what conditions allow for you to make impulse decisions.  The first thing you need to understand is they want you being irresponsible. They want you to be in a state that will allow for you to make a decision right now, because they will likely lose you otherwise.

 

I believe that the majority of people are good.   However, separation from the consequences of your actions through the internet, people just doing their jobs for corrupt companies, and the fact that the bad guys tend to use the shotgun method when scamming people has made trickery an epidemic in our world.  We have to be careful out there! If you get a bad feeling in your gut about something, don’t do it!  If it involves your finances, talk to someone you trust about it first.
It is also important that you use a good anti-virus software that alerts you to suspicious pages and links.  I use Malwarebytes.  They have a free version which is great.

 


    1.  Scarcity: This deal is selling out now!!! 100 people are viewing this now! Only 5 left!  You will never see this price again! So very rare is it in this day of surplus that there is a limited amount of something.  The truth is that in our consumer driven culture you can usually find the same thing or an equivalent for an equal or cheaper price elsewhere.  They don’t have to put popular concert tickets on Sale for them to sell out.  Pay attention to what the prices of the item on sale are, because the item will be on sale again, or even permanently that way, keep track of things you are interested in.  Don’t buy things on an impulse, wait, 24 hours minimum, or do a quick internet search for similar services, and if you still think it is a good idea, buy it then. 

 

    1. Energy Saving: Get a free Gift card when you do X, Doorbusters! These have a broad range of how bad or good they are.  They range from we will sell your information, sign you up for several services, and it will still be nearly impossible to get that free item; to loss leaders where they give you something for free or cheap to get you in the door to make other purchases.  Be very wary of these when you do not see them through a reputable business, if you do decide to do them be ready for a high-pressure sale and at the very least to be tempted by other items.  There is a reason they are giving something away; they are getting more out of it.
    2. Interest Piquing: Something has happened to your credit card, You’ve been chosen for a free cruise, I’m going to talk for 10 minutes to get you invested without ever telling you what the title was about, Outlandish Headline: You Won’t Believe who died!  These range from benign trying to get your click on their link so they can get you to look at their stuff to very malicious information phishing to steal your identity.  If you get an email that seems questionable or unexpected, make sure to check the email address to see if it looks suspicious.  Do not click on any suspicious links!  Go directly to the website and check it that way.  (Malwarebytes helps with these.) For National Inquirer Style headlines, just go to google and search it rather than clicking the link to find out if it is just click bait.  For an unexpected phone call do not give them any information about yourself, ask them to identify the company they work for, their names, and why they are calling you.  Remember you can always call the institution directly if it seems suspicious.  

 

  1. Intimidation: High-Pressure Sales, Extortion! These are hard to know about unless you receive a warning from somewhere else.  If you are going to go into a sales environment, check reviews of the establishment.  If you are going to a new city, do some searches on the internet about what scams are prevalent in the area.  These are more common than you would think, especially in tourist areas.
  2. Predatory: Predatory scams take advantage of an individual’s weakness.  Predatory programs for the poor such as payday loans, auto title loans, or any high-interest loans for quick cash, they take advantage of their desperation.  For the elderly or other commonly isolated parties, a common scam is getting emotionally involved with the person for the purposes of leeching money.  Predatory scams often prey on people who are trusting or naive, if it involves you wiring money to someone, especially someone in another country, steer clear!