But what about everything between 33 and 20???
Yep… We’ve done a TERRIBLE job of keeping up with this blog, AND the initial reason we set out to use it was to keep a very accurate log of our progress towards FI/Early Retirement as a building block to better understanding our own expenses (When you have roughly 25x your annual expenses you are generally considered “Lean FI”). Well, life gets in the way I suppose. The good thing is that although we are not doing a very good job of documenting it, we ARE doing a good job of CRUSHING IT! Our goals shift slightly as we daydream about what we want to do with our short lives, but we nevertheless are making great progress towards our end goal of financial independence, which will give us maximum flexibility to allow us to do nearly anything with our time within reason.
The Juicy Updates
We haven’t officially launched our new business in Africa, but we will share those details when the official launch happens… Needless to say, we are pretty excited about it! Rory has been back to Africa twice, and spent a total of 6 weeks there since we last posted a blog, in part continuing operations with his existing business, and also using the opportunity to do the necessary leg work and development required to further establish the on the ground piece of the future business.
Let’s see… We took a few weeks and went to Mexico (Rory’s first time… weird, right?) to a tiny island that is increasingly popular (and we see why) called Holbox, located a few hours from Cancun off the Yucatan Peninsula. Rory ate an impressive quantity of street tacos in the week we were there. What did we do while there? AS LITTLE AS POSSIBLE! Well, we did what we always seem to do. We read personal finance and philosophy books, listened to music, drank cocktails on the beach, and strategized/daydreamed about the future when those lazy days on the beach are no longer a short-term escape from the daily stress of work, but the reality of our day to day lives.
We just got back from a cruise! We went on the Carnival Breeze, leaving from Galveston, Texas. It was 7 days, and visited Islands in Mexico, Belize, and Honduras… We didn’t get off the boat at any of the locations, instead we spent our time relaxing onboard with all the extra space… Kristen had already been to all 3 locations, and Rory was happy to get away from the crowds for a few days, knowing these were all locations that would be visited in the future via slow travel anyway. The verdict is out on whether or not we like cruising. There were aspects we liked, and aspects we didn’t. We are however, willing to acknowledge that going on the Carnival Breeze during spring break was likely something that would create an unfair and unfavorable bias towards cruises. Maybe a European one would be more to our liking? We would love to hear feedback from people who would also rather have some quiet space to relax in a pool without spring break kids than have unlimited “hairy chest competitions”.
Okay Okay Okay… Finances
In 2017 we managed to each max out our employee contributions for our 401k/403b’s, ($18,000 each) and we each contributed $5500 to a Traditional IRA, which we later converted to Roth IRA’s, thus giving us no current year tax benefit, but moving those funds to what, in theory, should be tax free growth for life. We also put about $10,000 into our post-tax Index fund, but later shifted our mindset on contributing so much to this in the next few years, instead we have decided to focus on long-term rental income (buy/hold/rent strategy). We are hoping from a risk standpoint this will take the place of us ever feeling the need to purchase bonds, AND create much of our needed cash flow into early retirement.
If you remember from our early blogs, we already have two rental properties that we share with Rory’s business partner, in one of his businesses, and a third that we own solely, but rent through that business. Nearing the end of 2017, we purchased another property personally. A 2-unit duplex. It’s a bit of a fixer-upper, but the total purchase price was $65,000, and it required about $10,000 to get caught up on some much-needed care in order to keep the rental prices the same or ideally raise them in the future. The location is great. Our total income from this has been $1,800/monthly (to us personally), and this is mostly AFTER expenses due to the structuring with the business lease.
Yep… We’re slumlords now 🙂
We are also closing on a second duplex in a few weeks, this one is a bit more expensive ($120,000) but needs nothing major done to it, and commands almost $2000/month income combined between the two doors due to its proximity to the University. (We anticipate the yearly NET income from this to be in the $8-10k range)
Both of these properties will be kept in our personal portfolio. The $65,000 property will be rented through one of our businesses, but the other will be outsourced to a local property management company. We are aggressively paying off these properties as part of our current strategy towards FI. We are pretty proud of ourselves in having paid off more than half of the borrowed $65,000 for the first property already.
Based on our current strategy (Which may change due to market changes etc.) we are anticipating acquiring another rental property by the end of 2018. Fingers crossed.
We promise to eventually do a real estate blog detailing our strategy as I’m sure people will have questions on why we shifted towards this, and how we plan to make it all work, how much we are leveraging etc. more on that another day.