Good morning this is a guest post from Dee, she is a personal finance enthusiast and blogger who is working hard to live a frugal lifestyle, ditch debt, and create multiple streams of income. She hopes to inspire others to achieve their financial goals by doing the same and writes about the journey on her blog, Color Me Frugal. Follow her on twitter @ColorMeFrugal, Like Color Me Frugal on Facebook, and be sure to check out her blog over at www.color-me-frugal.com. Let me know if you would like to guest post on RFI.
Over at Make Money Your Way Martin of Studenomics will lists down few scenarios where you need to just get out from your freelancing clients.
Our journey to financial independence started in 2010. Well, we had dreams long before that, but 2010 was the year that we got clear about our goals and wrote them down. Looking back, it seems to me that this was when the journey started because this was when we realized that we had a clear destination.
My hubby and I have been together for over ten years now (married eight years). When we first started dating, we lived in a small town near a low mountain range. Oh how we loved those mountains. We rode mountain bikes and hiked alongside mountain streams in the summer and we rented snowmobiles in the winter. It became our special place. We got engaged at a small lodge in the mountains, and a year later we got married in the foothills.
Unfortunately we had to move for our jobs after two years in our little town. Even after we left, we thought of how much we missed it. In 2010 our objective became clear: we wanted to get back to those mountains. We wanted to purchase a small piece of land near the bike trails (which became snowmobile trails in the winter). We would build a home, and some day we would teach our children to ride bikes on those trails. That would be our forever home, in our special place.
Just one problem: it is difficult to find work in our chosen fields there. Well, it would be easier for my hubby, but nearly impossible for me. What to do about this? Give up the dream? No way. This was when we realized that we needed multiple streams of income in order to make our dreams come true. We needed income from multiple sources so that even if I never found a “real job” there or hubby only worked part-time, we could still live our dream. We needed to become financially independent.
We wrote this goal down in 2010, which was when it became real for us. We decided that purchasing rental real estate would be a good way to begin to make this dream come true. In April of 2011 we purchased our first rental property. Unfortunately the process of getting approved for a mortgage was a nightmare. Because we knew exactly where we were going to end up- in our little town near the mountains- we thought it only made sense to purchase our rental real estate there. Unfortunately we lived about 20 hours away from the town at that point, and banks did not seem to understand why exactly we felt this made sense. After hours and hours of paperwork and phone calls, we finally got approved and were able to close on the property. Our first rental property! It has been providing us with a nice source of cash flow since 2011. We love that little house, and a close friend has been the property manager since we don’t live there right now.
But one rental property alone does not a dream of financial independence make, as we quickly realized. We have also been aggressively contributing to our retirement accounts, maxing out both our 401(k) s and Roth IRAs every year. We have both done a little bit of work outside of our regular jobs over the years, so we started SEP IRAs and maxed those out as well. We quickly realized that our expenses needed to be far lower than our income in order to meet our savings and investment goals, so we cut expenses and arranged it so that every single one of my paychecks went straight into our savings account- that’s been the case for about five years now. We also pull some of hubby’s check into savings every month. This savings account is where we draw from when we need to put a down payment on a property- we now have three homes, two of which are being rented. We are currently working to aggressively pay off the mortgage on the small home we are living in right now, which will become a rental in the future; our goal is that when we move out it will be paid off and every single dollar that tenants pay in rent will go into our pockets rather than towards a mortgage.
The journey has not always been smooth. A couple years ago it became apparent that our dream of having children was not happening. So fertility treatments began, and with them came hefty price tags. But thankfully we already had some pretty aggressive savings habits and were able to cover costs by drawing from our savings. We are now pursuing adoption, which is also an expensive adventure, but one that we are very much looking forward to. This has impacted our ability to purchase more rental properties, but it has also forced us to become more creative and find other ways to cut expenses and explore other avenues of income such as blogging. I have also discovered that I love blogging, and the awesome thing about it is that you can do it anywhere- even in small towns near beloved mountains.
So while we have not reached our goal of financial independence or gotten back to our mountains yet, we feel that we are well on our way. We do not have an estimate of how long it will take us to get there, as there are still a million unknowns at this point (the largest of which is that we don’t know how much more we will be spending on our dream of having a family). But we have hope, and we have plans, and we have determination. We will get there.
This post was featured on the Carnival of Money Pros, thank you!