Happy Holidays

Happy Holidays! It has been a crazy year and I’m anxious for a fresh start in the next. I have been neglecting the blog because all of the travel, but I resolve to be much more active. Also the New Year is bringing my first property investment. I’m picking up a couple of acres in the mountains just outside of town, I’m hoping to build a place out there live in it a couple of years and flip it for a chunk of cash. This isn’t following with my original plan for commercial real estate, but with the market the way it is right now I needed to adapt. It has always been a little harder to get loans for commercial real estate and with the lending business the way it is it would make that loan very hard for me to get. So I’m going to turn to “traditional” forms of revenue until I have the cash to get the commercial busy going. I also just received a nice referral bonus for a real estate gig, so the real estate license is already beginning to pay off. Have a great New Year and if you are looking for a good realtor let me know.

On the road

Well phase one of my plan is almost complete, paying off my credit card so I have some real money to start investing. My blogging has suffered greatly with all of my recent travel, but that travel has also racked up some great over time that helped me pay off my credit card 2 months ahead of schedule. Well my credit card isn’t really paid off yet. I still have to get reimbursed for expenses for my last jaunt, but as soon as I am it is paid for.
I was going to throw up a new graph for my retirement goal but it looks pretty much the same. It won’t really be different until I make my first investment and figure out if I really start making any real kind of residual income. It is kind of sad being on so much travel and exercising so little. My best workout in the last two months was a power walk and sprint across SEATAC airport to make a flight. I need to focus more on diet and exercise on travel, but it is hard with the long hours, especially when you are happy about the long hours contributing to the retirement fund.
My real retirement accounts have been doing horrible lately, except for my gold, which is not nearly enough to save everything else. On the bright side I don’t stress too much over that since that is my retirement augment fund. But, I am really concerned with the amount of money the government is talking about sinking in to these failing industries. I wonder what we can really do fix the economy and the world. Are the two presidential candidates really much different? Will either one of them have enough power to affect any change even if they wanted to? I just hope they don’t try to change the no capital gains on homes law anytime soon, because that could put serious damper on my retirement schemes…
Finally I will leave a little pic of my recent adventures, while working up in Alaska a coworker and myself made it down to Valdez for a little fishing. It was beautiful out there, I really had no idea. We were on a fishing charter with two others and they each got a Silver Salmon (Coho) and my buddy got a little Ling Cod, which we had to throw back (about two feet too small to keep). I was really disappointed after spending a total of about 6 weeks up there I only wanted to do two things, catch a salmon and see the Northern Lights. I had dreams of catching half a dozen salmon, but then I found out another group of coworkers went down and it cost him $88 bucks to ship one home, It lessened my sense of loss. Then I found out you pretty much only see the Aurora in the winter I felt that was an alright sacrifice, not having to go back in the winter. But, who knows…

Chuggin' Along

I have been neglecting my blog lately, but retirement wise there just isn't much going on. I'm on the long stretch of paying my last credit card off and won't be able to make and real retirement progress until then. At this current rate, if I don't discover and must haves I need to charge, the card will be paid off by the end of the year. I did get a couple of books for my birthday which might help though. "Real Estate Investing for Dummies" and "Investing in Commercial Real Estate for Dummies", so I will thumb through those and see what I discover.
I'm kind of glad I don't have any schemes going on right now. I'm off for Alaska for the next three weeks for work and then off to Wyoming the next two after that. I would be excited if Alaska didn't only have three days without rain in July, but I'll try to get some fishing in on the weekends. If anybody knows some great sites to check out let me know, I'll be in the Fairbanks area. Look for pictures of my travels coming soon...

Up, Up and Away

On Saturday we headed up to the dunes by the Journal Pavilion to go on a tandem paraglide ride. I was a little adventure getting out there because many of the road was closed for shooting of the next terminator movie. It was a beautiful day but not much wind and not in the right direction for the site we were launching from. We only had time for two short rides; my brother was nice enough to let me have both of them. I think the most amazing part was how strong the winds were. It took three people to keep the big tandem wing anchored when a big gust blew. You launch by inflating your wing and then basically running off the side of a hill. The first time we launched we had to run quite a bit to get enough speed to launch, the second we barely got three steps before the wind picked us up and we were off! It was almost like a dream just running off a cliff and waiting for the wind to catch you from your fall, and before you know it you are soaring. The flights were very quick but super enjoyable, I think it was nice not having to worry about flying and just jumping on for the ride. I don’t think I have had enough exposure yet to decide it would be a worthwhile hobby. The only real issue is the amount of time, money and training required for the sport. The rigs are about $4000, training about $1500 there is annual maintenance for the equipment, not to mention the 4x4 I need to get around to these great launch sites… So needless to say I’m not quite hooked enough to make the investment, but I had a great time! Will, the owner of Mountain Flyers (http://www.mountainflyers.com) was great and I would highly recommend everyone to go out for a ride. Needless to say I have to be careful this fun doesn’t cut too much into my retirement plans. ;)

Rental House

Well there isn't much new going on. I'm just looking hard for some investment opportunities, but I'm stuck at this point with very little money to get into them. I saw this interesting site where you give this company $5000 and they give you a piece of junk house they fixed up with a renter. The basic principal is you refinance the house at new appraised price so you have 20% of the house already in equity making it possible to get the loan for 0 down. The margins are really low so I think that if anything happened to the place you would have to be out of pocket for expenses, but they do require you have enough liquid assets to carry 12 months of payments, so really you probably need at least 20 to start up. It was an interesting concept. http://www.bluemooncapital.com/ I think this company is actually making money hand over fist on the rehabbed properties, the fix-up costs and your $5000. It may be a better investment to buy stock in this company than to use their services.
My little brother is back from his adventures in the desert so hopefully I can put some of that rent money to good use paying down the last credit card, so I should have some investment capital soon. I'm trying to figure out the first investment right now, I'm really leaning towards a rental house to play with and leverage for capital on later commercial properties. Anybody know some crappy houses for sale in Abq? Let me know!

Bucket List

I was listening to an REI commercial on the radio today and they mentioned something about hiking 30 miles to the next campsite . This reminded me of the Appalachian Trail, which is something I would really like to do one day. Who gets to take off 3 months to do the trail? Retired people could! So I’m starting my to do list for retirement. I actually make a lot of lists in my life, because I can be easily distracted, it helps me stay on track. So here is the first draft. Maybe this can be an early start on my bucket list (great movie).
1. Visit Every National Park
2. Hike the Appalachian Trail
3. Get a helicopter pilot license
4. Catch up on my video gaming
5. Build a Cabin in the woods
6. Visit Ireland
7. Visit Australia
8. Visit Hawaii
9. Visit Egypt
10. Hike a glacier

Net Worth

I have been getting real friendly with Excel lately trying to figure out how reasonable this retirement goal is going to be and what areas I need to focus on the most. I have actually calculated out my estimated assets and debts for the next 20 years. The best part I found is that my money invested and amount I owe on the mortgage will be the same in 7 years. So, if paying off my mortgage was my only goal that would be great! The down side is it looks like I will only have about $290k in cash in 10 years and still owe 155k on the house. Right now at 20 years I have about 952k in investments.

The one thing that I didn't actually calculate is passive income. This is a little hard to undersand how much passive income I'm going to have when I have none now and I'm not sure what my first investment is going to be. But, this is the most important thing for me to track since that is what I’m basing the retirement one. I'm currently thinking about picking up a rental house, it will give me a good place to stick some money, it should be somewhat reasonable managing one house and will help me start on the path to positive pasive income. The housing market in many areas is great forbuyers right now, unfortunetly Abq is weird and hasn’t really gotten hit like most places. But, I’ll still be looking out for a good deal out there.

Finished step 1 and 2

After almost two months of ignoring my Xbox and straying away from my favorite beverage I have passed my Real Estate Exam. Now I can go get my license and become part of Albuquerque’s quickest growing profession. I made that up, but not really, there are a ton of Real Estate Agents here. I don’t know how these people actually make a living, you pretty much aren’t going to make a pay check for your first 3-6 months and all of the fees that are imposed on you by your broker can get ridiculous. Not to mention you end up putting in outrageous hours to keep your clients happy. I’m glad I don’t have to rely on it for income.

I also have paid off my big credit card whose balance at the beginning of the year was about $13000. Wow! Not really I just threw a sale of a motorcycle and a tax return at it, which makes it a lot easier.

Now I need to find a good 0% balance transfer for my landscaping Credit card, I actually found this interesting site that tells you how to make a profit on 0% interest offers http://www.fivecentnickel.com/2007/02/27/how-to-profit-from-0-balance-transfer-credit-card-offers/ and this may be a good time with all of the great rates on savings accounts. If I can focus on this guy I should be able to pay him off by the end of the year. Then I can pick up my first piece of income property if not sooner…

How to invest a million dollars?

I was doing the math today to figure out exactly how far away from retirement I really am, so I added a new element to the site so everyone could follow my progress. Unfortunately, I came to an unfortunate conclusion, I don't know if a million is enough?! So, with traditional safe investments I may make an APY of 5%, which would be about 50,000 a year. This should be enough to cover my estimated expenses, even with a kid (remember this would also include no mortgage). OOPS! What about taxes?

I figure now I need to make about $80000 a year pretax to cover my budget. Does this mean I need to save more money, or dip into the principal? I hope not, so my new task is find a way to make about 8% APY on my investment or have a passive income of about $6700 a month.

Since the way this plan has been evolving, commercial real estate has become a primary focus of my investment strategy. I think this passive income may be possible, but what that looks like in terms of real property value money wise is hard to say. If I had one good commercial investment and managed to pay it off I might make this on a property valued at less than a million.

The key to really making my strategy work is finding a good property management company to help me succeed. Managing one or two commercial properties or four or five residential units might be possible for one person. I think anything more would be ridiculous for a person with a full time job. So the trick will be finding a worthwhile property manager that won't cut in too much to the profit.

If you guys have any ideas on better ways to invest a million bucks once I have it let me know!

p.s. I'm going to take my real estate exam on the 18th, wish me luck!

The Retired Life

Alright so some people have wondered what I'm going to do when I retire at 40. Well, I see so many retirees out there that can't really enjoy their retirement because life has finally caught up with them. That was really one of my big drivers for wanting to retire when I was young. Of course retiring at 29 would be better than 39 in this respect, but I slacked too long.

My retirement days will probably look much like my weekends do now, but I definitely want to travel more. I'm pretty active, I like to hike, play sports and do yoga, so there will be more time for that. The one limitation in my life right now is having the time to get away and visit family and see the world. Last year we (my brother, my girlfriend and I) were able to get away for 10 days to Spain. But, that really isn't enough time to take everything in I figure another week or two would have been perfect to at least get the basic driving tour of all of the main cities and sites. As it is now, I feel like I going back not only because I really enjoyed it but I also feel like there are more sights I need to take in.

So how do you get to see all the great cities of the world on a fixed income? Well I just found this site yesterday and I think this guy is really on to something... http://www.happyflier.com basically this guy takes random trips around the country at cheap fairs, stacking up airline miles so he can afford the international trips he wants to go on. The more you travel the more miles you get (Silver, Gold, Platinum status). I think a mixture of this and miles credit cards could actually make these great trips more reasonable and realistic.

I have never been a person that had a problem keeping busy with something so I think, if that is my worst problem in 10 years I will be pretty well off!

The Blog Begins

This blog will document my journey towards retiring at 40. Why 40? Well since forever I had always had a goal for myself to retire at 29. I never was a big fan of working and I'm not one of those people that needs work to occupy their time, so this seemed like a great age to jump out of the Rat Race. Unfortunately, two months ago I realized that 29 was coming way too quickly (Aug '08) and there was little chance I would accomplish this goal, since I don't buy lottery tickets.

So I started a new goal and decided I would actually develop a plan to accomplish this goal. The new aspiration is to Retire at 39, for the blog we'll call it 40 to make it a nice round number. I did a little math and figured that if I had a house paid off, car paid off credit cards paid off I could retire with $500k in investments. For cost of living increases I would rely on my traditional retirement accounts (ROTH and 401ks) that I could tap at 59 or so. Then someone mentioned the cost of having kids, which I definitely hadn't considered. So I threw out the 500k idea and decided it would have to be closer to 1 million...

To make this goal I figured out the only way to do this in 10 years was to become a real estate tycoon. I'm not a particularly savvy investor so I decide I needed to get a good background in real estate, investing and tax law. So, where to start? Well first was pay off my credit cards and get rid of extra overhead in my life. With the help of a tax refund and the sale of my motorcycle, my credit card will be paid off in two months and then I will have to pay off my landscaping. From there I can move on to my mortgage and car.

The next step is the real estate background, so I'm currently working on my NM real estate license. I figured this would give me a great start on understanding real estate and would help save me commission on my future deals. In the next couple of weeks I plan on finishing my license and my realtor was kind enough to let me become my Qualified Broker. So with this the journey begins.