Financial independence

Good evening,

I’m a IT professional that makes around 150k a year. I own a 3 family property that grosses 69k a year. I’m trying to build a plan towards financial independence in 4 years. I have 33k in revolving debt and 124k in non mortgage debt including student loans and the revolving debt I mentioned above. I’m currently renting with a roommate while renting out my 3 family to help live below my means. I know I just shared a lot but I would like some help in putting together a plan to become financially independent in 4 years. Any help would be appreciated. Thanks!

Nice dude! That’s a great income, and love that you already have an investment property and are living below your means. Do you have any cash? How much do you have invested outside of that rental property?

I have 19k in 401k
16k in a retirement fund from an old job
7k in cash

The rental property has anywhere from 70-80k equity.

Well, you might not love this answer, but the first thing I would do is go HAM on that debt. You have a big income, but your net worth is currently about -$50K. People with negative net worths don’t get to retire. They get to slave away at jobs and make payments to the bank.

With $150K/year of income and living frugally, you should be able to knock out that debt in around two years if you throw EVERYTHING at it? Once you’re debt free, THEN you use your awesome income to start plowing money into investing.

Is your property cash flow positive? I don’t think retiring in 4 years is in the cards, but retiring very young may be if you go at this hard!

Try using this investment calculator with a 7% rate of return and inflation unchecked. But you’ll probably need to add 2 years to your age since you gotta get out of debt first!

Yes it’s cash flow positive. $761 dollars which is after property management fees etc.

Which debt would you start with first? I’m guessing revolving debt?

I’m a fan of the snowball method. Sort all your debts smallest to largest. Pay the minimums on everything then ATTACK the smallest with a vengeance. Once that one is gone, you have an entire debt out of your life and you can use that payment you were making PLUS all the extra payments you were throwing at the small debt to attack the next smallest. It starts to “snowball” as debts disappear.

Here’s an instagram post on it:

Awesome, thanks for the tips!

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