In the three years (!!!) since we started this journey to debt freedom and financial independence/early retirement, we spent a ton of time and energy on cutting expenses; our 2018 household budget is set and we’re OK with where we stand, so it’s time to shift our focus to increasing our income. Thus, growth is the theme for 2018.
Using The 12 Week Year as our framework, we established growth goals for ourselves, for which we’ll do quarterly updates.
Send V4 problems by March 23.
Currently, we’re sending V2 problems, which are easier than V4 problems.
Outlined on the fridge is a daily plan for chipping away at our goal — it’s a nice blend of stretching, cardio, and strength training. No need to wait for FIRE before we make a consistent, concerted effort to improve our health.
Serve 10 new customers by March 23.
In 2017, we worked hard to create systems and establish roles in our business to help us scale and also make it possible to sell in the future if we wish. Thus, I strive to meet more business owners, establish a better process for qualifying prospects, and leverage strategic partnerships.
Invest 3% of our FIRE goal in our brokerage account by March 23.
FIRE goal: to acquire $900,000 in our brokerage account to generate enough in dividends we can live off of
After much debate about funding our FIRE plan, we decided that not only are we not investing in real estate, we’re also not withdrawing from our tax-deferred retirement accounts by way of any strategy you’ve read about in the FIRE community. Instead, we’ll let our tax-deferred accounts grow until traditional retirement age. Doing this, however, means our net worth is basically zero and we have nothing in the way of passive income. Time to get serious about financial independence/early retirement!
Regarding our financial goals, we’ve established two lofty financial goals, one for each type of retirement.
For traditional retirement, we contribute 25% annually until we hit the $54,000 max in our SEP IRAs. As long as we’re actively earning, we will continue to contribute to our SEP IRAs. In theory, if we always have active income, we will always contribute to our tax-deferred retirement accounts. We won’t report on this goal.
For early retirement, we’re pressing on with our original date of May 18, 2019. We settled on dividend investing rather than real estate and just recently opened our taxable brokerage account; our financial goal for this quarter is to have 3% funded by March 23. Our FIRE goal is as lofty as it gets and there is no way that Garrett’s W-2 job alone will get us there. Growing our business and then selling a portion of it could, in theory, make it possible for us to hit our FIRE date. Or we could keep growing our biz. Regardless, this is lofty goal, a stretch goal, a HUGE goal.
What We Need to Achieve
Where we’ve been won’t get us where we want to go, so we’ve got to take it up a notch.
With a few days off at the end of 2017, we enjoyed unencumbered free time. We didn’t work on the biz. We didn’t dive into new projects. We drank caffe americano at home in our PJs.
All this free time made it clear that there was plenty of space and time available for the things we enjoy doing, including work for which we are paid.
Without changing anything about our current situation, we could coast to FIRE in roughly four years if we were to use the 25X rule/guideline as our benchmark. Garrett would be 40 and I wouldn’t be far behind.
To some degree, pursuing FIRE simply because of money means sacrificing valuable time, which we fear more than not having enough money. Instead of sacrificing those four years, could we change course, do work we love, and start traveling before we hit FIRE? Yes, we can. Should we? Maybe. Thus, we seek clarity as to what FIRE means to us.
We get so excited about starting new projects, so much so that we start several and don’t seem to have enough time to finish them. Continuing to work on our respective side hustles isn’t going to work today when what we seek is balance, so those will stay on the back burner until we achieve greater clarity.
At the moment, the plan is to continue living life as we had in 2017. Instead, we’re stripping away distractions and then leveraging time blocking. Time blocking will help us set up boundaries so that we have the focus we need, when we need it.
Finally, we have focus on what matters most: self-care. There’s nothing worse than packing so much activity into the day that we forget about dinner only to find ourselves scrambling at the last minute.
To achieve these goals, we need better habits. Establishing habits to help us achieve our goals has been at the back of my mind since Vicki at Make Smarter Decisions wrote about habits.
To bring this into our daily lives, we’ve time-blocked our day; our days are now divided into eighths. Every three-hour block is associated with one of our goals.
At the moment, three of those three-hour blocks are spent on sleep. 🙂
Upon waking, three more blocks are spent on work, which includes the time necessary to get out of bed and get ready for the day. Then, we have a block for self-care, so meals and fitness. Lastly, we have fun learning, reading, or spending time on our hobbies before bed.