All ModelsTime to Lean FIRE vs Property ARV

Time to Lean FIRE vs Property ARV

Is it impossible to achieve financial independence (lean FIRE) in cities where home prices are higher?

The chart below compares how long it takes to achieve financial independence (lean FIRE) compared to the price of properties in that city (After Repair Value or ARV) utilizing the most basic Nomad™ real estate investing strategy.

It is important to realize a few things about the chart above which may NOT be obvious:

  • This is using the most basic Nomad™ real estate investing strategy of buying properties with 5% down, moving in, living there for at least a year, then converting them to rentals and moving into the next property. It does NOT include utilizing any of the property equity (which could totally change the results).
  • In more expensive markets that would require higher income to qualify to buy properties, the amount of money needed to be financially independent is higher. This is NOT a direct apples to apples comparison of achieving a fixed dollar amount per month.
  • The amount needed to be financially independent goes up with inflation over time. The longer it takes you to achieve lean FIRE the more you actually need to produce each month to be financially independent.
  • Not each city starts with the same amount of money... each one starts with 7% of the property value in their market saved. If that happens to be less than $10K, then we use $10K as a minimum.
  • Each person is saving $1,000 per month before they buy their first property. That means that people earning a smaller amount per month are saving a larger percentage of their income; people earning more are saving a smaller percentage of their income.
  • The amount they're saving each month changes after they buy a property to live in.
  • We do not include social security at all in the models.