Intro to Financial Independence and Retiring Early

In the summer of 2018, Tammy and I found ourselves with two sons, ages 20 and 22, entering the workforce. I sat down with each of them individually at different times to discuss their plans for work and ultimately their plans for retirement. Both expressed to me, independently, that they would like to retire early.

As my own parents continue to age and with the passing of Tammy’s parents last year, Tammy and I have had several conversations recently about retiring early ourselves. I love helping people buy, sell and invest in real estate as a real estate broker. I love running the local real estate investor group and teaching the real estate investing classes in Northern Colorado. I love writing books on real estate and investing topics. And, of all the things I do, I think I love coding the Real Estate Financial Planner™ software the most of all.

So, why even consider retiring early? Each of us have our own reasons for considering retiring early. I’ll only speak for me when I say there were a lot of little reasons, but mostly it was about my own mortality. As Tammy and I continue to have discussions, I suspect we will continue to do the work we’re passionate about and help people, but we might do it in a more balanced way as I will discuss later.

I will share with you a little about my own situation, so that when both of my sons expressed an interest in financial independence and retiring early, you can understand that it is a topic I have personally thought about a lot and one that I was eager to share what I believe I know with them.

This is my attempt to document my thoughts, opinions and analysis of certain models for achieving financial independence and retiring early for my sons. I will focus this book primarily on my oldest son, JC, and use numbers that are appropriate and germane for him. I do plan to write a follow up series for my second son as well with numbers more inline with a plan that is applicable to him.

Three things about JC’s numbers. First, he has given me permission to share, in rough terms, his personal financial info. Second, his numbers are remarkably close to national averages so they probably apply to a very large number of people that I imagine would be reading this. And third, if JC’s numbers are not close to yours, you can very easily use the Real Estate Financial Planner™ software to change the assumptions and run your own versions of the Scenarios I will be covering. By running your own numbers, you can see for yourself how the plans I am analyzing and discussing for my sons could be applied to your personal situation.

Over the next year, I hope to document and share a lot of my thoughts that will help my sons as they pursue their own plans to achieve financial independence and retire early. I will expand on the foundation of materials I have left for them and others on the Nomad™ real estate investing strategy and other real estate classes.

In this volume, I will tackle the basics including:

  • My core assumptions about his current situation and what financial independence and retiring early (FIRE) might look like for him
  • Safe withdrawal rates and cash flow from rental properties
  • Working for happiness
  • The role social security may play in planning for FIRE
  • A plethora of detailed analysis on numerous approaches on how to get to FIRE
  • A detailed discussion and examples of how inflation affects FIRE and several of the discussed plans

I would consider that information to be a good intro to financial independence and retiring early for both my sons and for others that are reading and interested in the topic.

Let’s begin by looking at some of the core assumptions of JC’s current situation and what financial independence and retiring early might look like for him.

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