Our Progress towards FI Revealed!

Since creating this site to track our FI journey, I always wanted to share our progress towards our goal to be financially independent.  I keep having this internal debate on how to present the data, should I put report our actual net worth?  Screenshot personal capital?  Include our home equity in the numbers?  This leads to procrastination and I am now doing this three months later than I originally intended.

At some point I have to make a decision and put down something/anything!  I track my net worth a couple of different ways, the easiest and most automatic way is to use personal capital.  You can login to your PC account as often as you want and watch your progress.  I also have net worth spreadsheet from the madfientist on which you basically transcribe your account values from PC to come up with the same number.  I did that for the first 6 months of the year and then stopped.  I think I got a little bit lazy but I do think there is value into typing the numbers in a spreadsheet so that you can really think about it and compare the fluctuations to what is going on in your financial life.  There is definitely power in that and I might start doing it again in 2018.

For a few years now, I also track our FI date progress through the laboratory on the madfientist website.  It is a wonderful and simple web app in which you enter three simple pieces of information, your spending, savings and net worth each month.  My favorite feature is that it gives you an FI countdown.  You can in turn compare that date to what you are expecting.

https://lab.madfientist.com/sign_up

The goal that we have had in mind for the last two years is that we would be able to be financially independent sometimes during the year 2030. I know 2030, a full twelve years away!  I am not sure there are many FI bloggers out there with an FI data as far out as us.  A lot of the big guys I follow were either already retired or were able to do it in under 5 years from the time they decided to do so.  But I do believe in the power of writing down your goals and tracking them.  I am sure there is a scientific term for it but something magical happens when you write down your goals.  You tend to reach them first of all and in many cases, surpass them.  I imagine it is due to the fact that we are typically conservative in nature.

I am still trying to figure out on how to report our spending, budget or net worth each month but for now I am going to settle with a simple screenshot straight out of the laboratory.  This will be my starting point and I can improve as we go along.

As mentioned above our goal is to be financially independent by 2030 but as you can see above, the math says that it will be more towards the end of 2031. Oh no! Time to start freaking out!  As you can see we still have plenty of time to rectify the path as we go.  Real life isn’t a spreadsheet either, my better half may stop working when we have more children for example but that also decreases expenses as we would be able to pull our daughter from daycare.  For now I try to forecast one year at a time.  We are also getting ready to rent our first duplex and I have not yet figured out how to include that revenue in the laboratory and it may not be possible.

In conclusion, I strongly encourage you to sign up for the laboratory and find out your own FI Countdown!

The Path to Buying our First Rental Property

About a year ago I started reading and learning a little bit about real estate.  I think one of the blogs that first got me interested in the topic was Afford Anything  from Paula Pant.  By that time we were already doing our investing towards financial independence mainly through our 401Ks and other post-tax accounts.  But this was one of the first times that I came across an FI blogger that achieved financial indepence through rental properties.  I then came across a podcast from Brandon at MadFientist where he interviewed Josh Dorkin from BiggerPockets.  Therefore I started going down that rabbit hole and  listened to a lot of their podcasts as well as learning about the different real estate strategies discussed.  Flipping did not attract me because we already both work 40+hour jobs and we have a toddler so time is limited.  Wholesaling is marketing intensive and I don’t exactly understand the steps involved.  But I did find rental properties intriguing for a few reasons.  I like the idea that you actually own real estate, the tax benefits, maybe some appreciation but above all the cashflow.  Like I mentioned we have a toddler and we’d like to spend more time with her.  My wife is not in love with her current job and has a bad commute to deal with each day.  Therefore I brought up the idea of rental properties to my wife with the goal of building a little bit of cashflow so she could cut back on her hours.  We love the idea of starting this business together and it can fit easily into our financial independence plan.  Often rental property income is referred as “Passive”  but we understand that it won’t completely be especially since we plan on managing it ourselves.

I can’t remember which episode of the BiggerPockets podcasts I heard this from, but someone said the best thing you can do is to buy that first property and gain an education  That resonated with me and was determined to get our first deal done in 2017 if the right deal came along.  We had been saving a little bit of cash the last few years in case an opportunity came up.  Every once in a while I would doubt our decision, why not apply that chunk of money to our own mortgage or simply buy more index funds.  It’s about the timing for us, we are at a point in our lives where we either needed to do this now or wait 2 or 3 more years.

Fast forward a bit and we actually acquired our first duplex earlier this month.  I plan on documenting the process as much as possible since we are completely new to this and hopefully we can help someone else in a similar situation.  I will update the blog with the rehab cost and time spent to get the property to market.  I will also share what our expected returns are and how that will compare to the actual number once rented each month.

Now back to you, let me know if there are anything in particular you would like to know.  Let me know in the comment section and I will help any way I can.

Does the world need another personal finance blog?

How does this work?  I type in some stuff in the computer and people will read it?!  Well maybe.

What is my main motivation behind launching this site?

This is mainly a diary for me.  I do love reading other personal finance blogs and follow along their progress and sometimes adventures.  I am planning on using this site to catalog our own progress and share some of our experiments.  I think it will be very cool to look back years from now and see where we were and see how we got to be where we are (good or bad).

Learning new skills.  I am blown away by some of the quality articles out there and by the writing skills of their author.  I am an engineer by trade which means I am barely good at writing technical reports and that’s it.  I do hope to develop some writing skills through this diary but I won’t hold myself to any particular standards otherwise I know I will never take the time to add content out of fear and embarrassment.  Besides writing, I am excited to learn how to build a website and other associated tasks.

A place to collect my favorite content.  I will also use this as my little hub for all my favorite contents including blogs, books, articles, how-to.

What else?

I likely won’t have any original ideas.  What do I mean by that?  Let’s be honest, anything you ever wanted to learn about finances is already out there and not hard to find with a little bit of research.  The information was also readily available before the internet existed!  But what I can do is share what I am doing and review what’s working and what is not.  Personal finance is just that, personal!

Accountability.  Basic human psychology tells us that we are more likely to stick to goals if we share them with others or write them down.  Well I don’t know if anyone else will be reading this but at least I am writing them down.  I do love the community that’s out there and follow many people already.  Sadly as you may know this isn’t a topic that excites your family and friends.

To answer the question of this post:

No! Another personal finance blog is not necessary. But but but….. There is a lot of misinformation and misconceptions when it comes to money in this country.  This could be a whole topic for another post!  Therefore I do believe that it can’t hurt to show yet another example of a family being intentional with their money decisions.  This might sound cheesy, but I do hope to enlighten a few people that might stumble on this blog and simply spark an interest in them to look further into financial independence.

That does it fore me!  I guess this is my first official “blog post”.  I feel like balloons and fireworks should be blowing up on my screen right now! No?!