Countdown to Financial Freedom

[EvanOkanagan]

I have this twitter account that I completely forgot about. If I Google my name it’s the 5th search result and I’ve only used it a few times. I stumbled upon it just recently though and it motivated me:




When I created this the only thing I possessed were dreams and ambition-- I was dead broke and had a bunch of student debt… Fast forward 6 years. I’m 29 years old and there are 262 days until my birthday!

Up to this point (there’s a small story in my below post, I wanted to make this a short intro though, feel free to read if you like) I’ve created enough monthly cashflow through rental properties to pay for all of my expenses. This could technically be called “financial freedom”, however, it doesn’t allow me the freedom to pay for other things like trips and other spending on myself…. I call the stage I’m at “financial independence”.

I’m posting in this thread to keep me accountable mostly, and also update on what I’m doing to achieve the next goal of Financial Freedom... before I hit my Dirty 30's!


262 Days to go:


BREAKDOWN:

Recurring Monthly Payments:

Cadillac: $652
Internet: $100
Gym: $53
Utilities: $100
Auto insurance: $135
Gas: $250/mo
Groceries: $340
Restaurants: $250
Other food & Drink: $200
Rent: $500/mo (I currently rent a condo in my city w/ my girlfriend for $1000/mo)
Bank Fees: $19.45

Overall Monthly Expenses: -$2,599.45

Monthly Cashflow: (I calculate this by adding up all my monthly rental income and subtracting monthly amounts for Mortgage, Taxes & Insurance. ) : $3,791

NET INCOME: (after what it costs for me to live an average month minus my expenses): $1,192/mo

My goal is to reach a net income of $3,000/mo. This would allow me to travel abroad (if I did go abroad I would have more money available due to not buying food, gas, etc where I live) or to or take a couple short trips every month if I desired.


THE PLAN:

MY plan is to minimize as many monthly recurring expenses I can and maximize my (mostly passive) income by buying more rental properties.

How?

My (slowlane?) job is as a Realtor in my city. I make quite a healthy income and will not take my foot off the pedal in this until I've reached my goal. I'll be focusing on earning as much income as I can as a Realtor, maximizing my income with my current rentals, and trying to minimize as much of my recurring payments as I can.

Won't be posting every week as I often get in the zone with work, will try to keep it updated though.

 

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[EvanOkanagan]

The year I made the Twitter account I was an employee at more than 10 jobs that I got hired and quit… I couldn’t work simply based on the hours I put in. I was huge into self-development books that other people my age couldn’t understand. Around this time I finally found a field I could hold down a job in—commissioned sales. I would make more as I improved myself more, and this was exciting.

When I first started on my “personal development” journey I had no idea how I was going to provide value and make my money, but financial freedom was the goal. Over the next few years alongside my sales jobs I would create several failed business ideas and even spend almost a whole year doing network marketing.

I kept trucking along with my sales jobs and self-development through books and seminars. The more I read and learned from mentors the more I improved. After a few years I started consistently earning over 100k/year doing commissioned sales. I got pretty good at selling in short time… a big part due to my constant yearning for development. I was breaking records in almost every sales job I took…

This got the attention of others. At a party, my good friends brother-- a big Real Estate investor & owner of a brokerage came up to me and asked me to do phone sales for his brokerage. I would need to quit my 100k+ job, spend a bunch of money to get my Real Estate license and start from 0 clients with no guarantee of earnings…. No thanks.

I kept thinking about it though…. I had read books on Real Estate investing and always wanted to own rental properties, but had no idea where to start…. This could be my shot…

So I took the plunge. I left my comfortable job with great income & full benefits and started from zero. I wanted to learn from the best, and the only way to do that was to be around them constantly.

--- I see this point in my life as the moment I started merging from the slowlane to the fastlane… I always had a fastlane mindset but I was only as good as my last sale and I wasn’t building anything that I could leverage with my sales gig…

Fast-forward a few short years later to today. I’m now a Senior Partner with the brokerage and selling consistently over $1m/month of Real estate and getting profit sharing. I’ve own 3 rental properties (with a total of 7 income streams) that now cover all of my ongoing monthly expenses and then some.

It all started with taking the big plunge… going into the unknown and uncomfortable and starting to hang around and learn from others who were where I wanted to be in life.

Anyways.... on to the progress!

 

[EvanOkanagan]

Alright so doing some basic brainstorming of my list I found a few areas that'll have a considerable impact on my net income.

1. GET RID OF CADDY. I hate paying my $650/mo car payment... for a guy who loves passive income, passive expenses are the enemy... especially when they're a liability. I'll be saving money to buy a used luxury sedan--in cash this time to avoid any monthly payments. This may be tricky as it's currently a lease so I'll need someone to take over my lease payments (+$652/mo)

2. LIVE FOR FREE. With my strong income over the last couple of years I'm able to buy a "primary residence" with only 5% downpayment as soon as I file my taxes next year. My current rent is actually quite low where I live at $500/mo. I plan to buy a house at the beginning of 2016....

Either a home with a basement suite, a full duplex/fourplex, or a house with a carriage house (2 houses on the same lot). Whatever I buy, I'll be living in the smaller/less updated of the suites so I can rent the large side out. I'm very familiar with the rental market in my city and I know I can buy and have the tenant cover both the mortgage and utilities with their rent when I pull the trigger on this. (+$700/mo)

3. BANK FEES. This is pretty minimal but I think the easiest thing I can do right now to improve my bottom line. I pay about $20/mo currently in my checking account fees. Another bank offered me lower fees. (+$14/mo)

Total Potential Increase to Net Income= $1,366/mo

New net income w/ cost cutting: $2,558/mo

This would be quite a large stride to my goal and can be somewhat easily achieved as long as I get my a$$ in gear.

 

[exclusives88]

Sounds like a expensive Cadillac. Is it a CTS-V?

I would get rid of this ASAP. Use lease trader and see if anyone would do a lease transfer. I just did this last week and the process was pretty straight forward. I now drive a 2005 mini cooper s. Cost me under $4k and it was worth every penny not having to make a monthly payment on a car.

Also looking forward to your thread as I am also the same age.

Edit: Where are you located?

 

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[Devin Out]

Can't wait to see where this thread ends up, great job so far Evan.

You mentioned a wake up call for you was finding that twitter account made by a younger you years ago, where you made the declaration that you would be financially free by 30. That's awesome that you found that and I can imagine what you thought to yourself when you revisited that statement made by the younger version of yourself. I'm turning 18 in a few months and I LOVE self development and developing others as well. Ever since a young age I always told myself "by 15 I'll have a cash generating business... By 16 I'll have a business... Scratch that, by 18 I'll have a business" which is somewhat along the same lines as what you told yourself. Now while I wasn't fully educated on anything business related back then, now I am and I share the same goals as you do.

So I have a few questions for you, hopefully you have a minute.

1) In order to focus on any business ventures I plan on living for free by making a down payment on a triplex this summer and renting out the other two rooms. Being in real estate, how does this usually work out for people? Does dealing with tenants outweigh the time cost of simply working a few days a week to pay for rent?

2) I feel that there is something to learn from everyone... So, just off the top of your head is there any "what not to do" advice for a young kid? Whether in the form of business, life, self development, etc.

3) Lastly, what are some self development habits that you practice?

If you can even answer one of these I'll be extremely thankful!

Thanks, and best of luck Even

 

[EvanOkanagan]

1) In order to focus on any business ventures I plan on living for free by making a down payment on a triplex this summer and renting out the other two rooms. Being in real estate, how does this usually work out for people? Does dealing with tenants outweigh the time cost of simply working a few days a week to pay for rent?

That's a great plan.

I used to hear horror stories about being a landlord and news articles of tenants completely trashing a house leaving the owner at an enormous loss. There's nothing exciting or interesting about a tenant who always pays his rent early or has done some improvements to the house and treated it as his own... The latter happens a lot more often than the nightmare tenant.

I spend about 1-2 hours per month managing my 7 rental units. Especially since you'll be living right next door to the tenants, the benefits far outweigh the negatives.

2) I feel that there is something to learn from everyone... So, just off the top of your head is there any "what not to do" advice for a young kid? Whether in the form of business, life, self development, etc.

What not to do?

Over-analyzing. I've got a friend who comes up with great ideas every few months, over-anaylzes and eventually talks himself out of it. The key to my success has been to listen to my mentors and ACT on their advice. There's a chance you might fail... but you'll learn much more from acting which will accelerate you to where you want to go.

3) Lastly, what are some self development habits that you practice?

The biggest one I've implemented is having an early morning routine. I took most of it from a book called "The Miracle Morning" by Hal Elrod.

Before I do anything in the day I'll do these things:

Meditate: for about 10-20 minutes to clear my head
Journal: This has been one of my biggest keys to the success I've had.. it's also pretty cool to look back to a year or two ago and see where you came from. Penzu.com is a cool online journal that's free and saves all your entries. Then on your yearly anniversary it'll send you an email what you wrote a year ago.
Reading: I typically read for 20-30 minutes a day for inspiration

Another self-development habit is doing a "weekly review". I took this from the book "Getting Things Done" by David Allen (strongly recommend this.. read and re-read this since I was about 19). It's basically taking everything you've done that week, your scheudle, all the ideas and everything that's in your head and putting it on paper once a week. On Saturday late morning I do this and if I miss it I feel a bit lost. Great way to set up your next week for success.

 

[EvanOkanagan]

Sounds like a expensive Cadillac. Is it a CTS-V?

I would get rid of this ASAP. Use lease trader and see if anyone would do a lease transfer. I just did this last week and the process was pretty straight forward. I now drive a 2005 mini cooper s. Cost me under $4k and it was worth every penny not having to make a monthly payment on a car.

Also looking forward to your thread as I am also the same age.

Edit: Where are you located?

A CTS-V would be at least double I would imagine! It's actually just a fully optioned ATS. I didn't have to put a deposit down which is likely why my payments are quite high.

I'm in BC, Canada

 

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[IrishSpring600]

Well?

 

[EvanOkanagan]

Well?

Haha! Thanks for bumping this. Have been grinding lately and forgot to update. Can't believe it's almost been a year! Since last post I've sold 2 of my under-performing rental properties which has lowered my cashflow but increased capital considerably. I've been allocating 75% of my income to my FFA (financial freedom account in my online banking) and now have quite a sizeable amount saved for the next investment with no bad debt (nothing but mortgages)

I haven't hit my Cashflow goal but I feel like I've made huge strides. I've lowered overall expenses and my cashflow has ultimately lowered due to selling off 2 rental properties.

However, I'm now thinking a lot bigger. Buying single family homes doesn't seem to excite me anymore-- I remember when purchasing my first few homes I felt so pumped up. I think that was because it was so out of my comfort zone that it made me feel alive.

I'm gearing towards an apartment complex purchase and this is looking very possible with my resources. It's out of my comfort zone definitely... but I feel like I need to make bigger moves to grow.

Update on my action steps:

1. GET RID OF CADDY. --FAIL. I've been advertising my car on classified websites but it looks like I'll have to run my lease out as there's been no bites.

What I have done: I set up one of my online bank accounts to allocate 5% of all income towards a slightly used Luxury SUV. When it comes time next September and my lease ends I should have most/all of the money needed to buy something with cash.

2. LIVE FOR FREE. -- SUCCESS. I've actually moved into one of my rental properties. I renovated the basement suite completely. It's a bright, open 2 bedroom + an office suite-- almost too deluxe for a basement but I did it to my specs.

Not only am I not paying $500 in rent, I actually make $730/mo while living for free here. Not bad!

3. BANK FEES -- FAIL. This was too much hassle and not worth the effort for the $14/mo it would've saved me. I have credit cards/LOC with this bank.