Retirement Goals Reignited | 2016 Revisited
It’s time to jump back on the blogging train. This time for good! They say persistence is the key to success. I’m bound to be successful as long as I keep coming back right?
I think the last post I wrote was late November 2018 when I finished up a three day real estate conference in Milan. Reflecting back, I know how exciting the future looked and I have to say that the past 9 months haven’t disappointed. I’ll start with a quick recap of events for today. Next post, I’ll get back into the swing of things updating everyone in detail about the current projects that we are working on.
This year’s Recap
Many people aren’t aware, but 2018 was a year of challenges for our family. We have conquered most of our ailments and are moving forward with our real estate goals despite some unexpected losses.
Between December and April, I spent a lot of my time teaching English with VIPKID. Teaching one on one with over 1000 students in China has its ups and downs. The kids can be fun and interesting but at the same time it is physically draining. I know a few other teachers who have burnt out teaching online since then and I have to say, I understand how they feel. I still love the freedom of controlling my schedule and do feel blessed that I have the opportunity to work from home while living abroad.
April is where things become interesting… between kids in school, teaching English, and selling one of the properties, our time was pretty well spent. Moving onto May, we had a new arrival in the family! Lucas was born on May 23rd and has been a joy to be with. I suppose we were lucky, but he really is the easiest child we’ve had so far. After all the struggles from the previous year, I suppose we deserved it.
Current Status
As with tradition each time we have a new child, we have spent the summer in Apulia, Italy. (The heel of the boot) I still teach full time English classes while the kids play with my wife’s parents and in the evening we go to the beach almost daily.
As you may have noted this is more of a family update. Due to being silent for a decent period on this blog. I felt it appropriate to describe our families current situation. I mean all this work is for family after all. The older I get the more I reflect on past decisions and what I can learn from them. There is a certain level of urgency I feel regarding my real estate projects and our families future. I suppose that is normal. I suppose it is due to teaching people for years the need to prepare for retirement early on in life. Every day that passes can either be considered a missed opportunity or an advantage gained and I hope I can start recognizing all of the advantages that have arisen to my families benefit.
Currently, I am sitting in a DIY office in my in-laws living room with 30 minutes before my next English class. A 9 year-old Chinese student prepares across the world to communicate in a foreign tongue and I ponder how to improve my families happiness. In truth, I know the answer and am happy to implement it over the coming years.
Since I am reflecting, I think it is about time I redo my vow to reach Financial Independence and Retire Early.
My 2016 Pledge
In order for me, DauvO, to become a millionaire, I pledge to do the following:
10% income to Charity
Save 50% income
Max my IRA
Open and Max my SEP
Self-Direct majority of Retirement savings to Investment Properties
Buy and Hold 5 (auction) rental properties
Sell Properties after 5 years for non-taxable gain.
Create web/mobile app for passive income
Since it is over 3 years later, I thought I’d update the plan and reflect on what I have or have not accomplished.
10% income to Charity.
I am happy to report that I have been able to keep this goal! It doesn’t really improve my net worth, in fact it reduces it, but I believe that it also keeps my priorities aligned as I move forward.
Save 50% income
I think I need to modify this goal to state: “Use 50% savings towards cash flowing investments.”
If it was stated this way, I could say, Done, Done and Done! Cash alone doesn’t do anything, so saving 50% of my income is only step one to reaching Financial Independence. Sure it gives a lot of security having a giant nest egg under the mattress, but without investing it, Inflation actually would make it less valuable over time.
Max my IRA
FAIL.. Hard fail here. But to be honest, living in Italy and working for a Chinese company makes the whole tax thing a bit complex. I can for sure do better in this and as of today, ‘I Recommit myself!’ Especially since I’d like to invest my IRA differently soon.
Open and Max my SEP
Another FAIL… I don’t have a SEP established thought I should start taking advantage of this… Again the taxes situation of working abroad doesn’t work to my benefit at times. But excuses are excuses and I can do much better!
Self-Direct majority of Retirement savings to Investment Properties
Due to the total in my IRA, I have not moved forward with this and have chosen traditional investing in the meantime. As I maximize my IRA, this goal will become more easily attainable.
Buy and Hold 5 (auction) rental properties
This is obviously a work in progress. 3 years down the road, I own my personal home without a mortgage, and two cash-flowing rentals. As I mentioned above, we have sold one of the auction properties which I will explain in a future post. We are also looking to upgrade our home and rent out our current home which would bring us to 3 rental properties by the end of the year. Not too shabby! I’ve already got my sights set on a few options! Which one do you like?
Sell Properties after 5 years for non-taxable gain.
We’ve just reached the 5 year point on our first investment property. At this point we have to decide if the property is more valuable as a cash sum or cash flow. If we rent out our home we could use the monthly income to cover the mortgage of one of these next properties. It would be a major increase in standard of living without money exiting our pocket to cover the mortgage, however, it would require a cash deposit to secure the mortgage loan. …..or we could sell the property and pay cash for a less expensive property. What would you do?
Create web/mobile app for passive income
This one is an interesting goal… the summer after I wrote this, I dedicated a month to building an app. I reached a certain point and still have intentions to finish it, but I decided to focus on investing and use my earnings to pay someone to build it for me since I can only really dedicate myself to a few things at a time. I’d still love to build it myself, but right now it seems best to focus and really smash it out of the ballpark later on.
2019’s revision
Due to recent events, I’d also like to add goal # 9 and #10 which are crucial to achieving financial independence.
Study Financial Education daily
I think that this goes without explaining, but better I do. No matter if we choose to work in the financial industry or not, it is pertinent to have a good financial education. Last years stresses could have been avoided if my financial knowledge was greater and I choose to never experience this level of ignorance again. Recently, I’ve found some inspired Youtuber’s that are have been a great influence.
Only spend investment income when possible
Some of you may argue that if I have the possibility of achieving this then I am in reality “financially independent”. But what I intend with this goal is that outside of a fixed budget which is covered by my wife’s current income, if we choose to make a purchase that doesn’t create a positive cash flow, or in other words consume cash outside our typical budget, that we will only use income that was generated by one of our investments…If you read “Why the rich are getting richer” by Robert T Kiyosaki (This is an amazon affiliate link), you will find a perfect example of this.
That’s all for today
Overall I’d say my list is attainable and we’ve already made great strides in doing so. Before coming to Italy, I wouldn’t have been capable of imagining the experiences I’ve gained here. Here’s to another year of experience and hopefully leaps ahead in regards to our financial independency.
Quick side note: I discovered the Cash Flow Game is online now! Pretty interesting if you haven’t tried it, check it out! Better yet, let’s play together!
