#44: My Fast Track To Financial Freedom

The Blueprint I Used That MIGHT Help You

January 03, 2024 • Estimated Reading Time: 10 minutes

One of the greatest benefits that come with financial freedom is the freedom to do what you want when you want. 

I’m going to explain later how I was able to achieve financial freedom faster than I initially planned. 

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Here’s a real-life example of financial freedom being exercised:

I just spent 2.5 weeks in Asia and I didn’t need to get permission from my employer.

Since I got out of the military and worked in consulting, I’ve never taken a full week off from work. This was due to utilization targets (how many hours I billed in the year), workload, and perception. Unfortunately, the last one was the biggest reason why I never took too many days off.

I was always rolling over vacation days to the following year because I didn’t want to let my team down and because not many people were taking that long of a vacation! I didn’t want to be the “odd” one.

If I were to take 2.5 weeks off from work, I’d have to be very careful with how it would impact ongoing work like making sure there is enough coverage on the team, creating a hand-off document for my team to use during my absence, and carefully messaging the time off so that it doesn’t trigger any alarms from leadership. How annoying..

I know I’m not the only one who felt this pressure. A lot of people would experience some sort of difficulty if they were to take two weeks off at once even with advanced notice.

Not having to be somewhere I hate for a set number of hours is one of the most freeing feelings.

The Fast Track To Financial Freedom

In a previous newsletter, I wrote about how traditional FIRE is flawed.

Traditional FIRE is building up a nest egg to have enough money invested to retire. Rather than slowly building a retirement fund, FIRErs do this at a higher level. They save as much as they can and invest as much as they can. While this method works, it’s inefficient for most people. 

If you enjoy your job, earn a high income, and don’t want to deal with additional stress factors, then the traditional FIRE path is probably great for you.

If you were like me (hated my job and couldn’t wait to do something new), let me explain how I was able to fast track towards financial freedom in stages:

Stage 1: SAVE SAVE SAVE

When I started my financial journey in January 2019, I was on the traditional path. I wanted to have $2,000,000 invested before I retired. I was trying to save as much money as I could by lowering my expenses. I even considered living in my car when I moved to Los Angeles just to save $1,300 a month (rent with a roommate). 

I realized that there was a limit to how much I can save without drastically affecting my quality of life. While I could have survived living in my car, it would be VERY inconvenient. I focused on increasing my income while maintaining a normal lifestyle.

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Stage 2: Increase Income

I already owned two rental properties (because that’s what rich people do, right?) so I decided to focus my efforts on real estate. 

I was also working to get a higher paying job. If I’m going to hate work, I might as well work somewhere that pays more, right? 

Any money outside of living expenses, my employer’s 401(k) match, and Roth IRA, I put into real estate and my taxable brokerage (for liquidity if I needed it for real estate). 

Stage 3: Focus on Cash Flow

Real estate helped increase my net worth significantly due to appreciation, but it didn’t change my day-to-day. I became a millionaire at age 29, but it didn’t change anything. I needed CASH FLOW.

You can read my post on why you should focus on cash flow.

My thinking was that if I already own real estate, I might as well leverage it to make more, right? 

I pivoted my strategy at the end of 2020 to focus on short term rentals. It was an easy transition since I already had three rentals and property management experience.

I bought my fourth rental in 2021 and I sold my first two rentals (over $325,000 in equity) in 2022 to buy two short term rentals. I gave up $400/month positive cash flow from these two long-term rentals to generate over $6,000/month in cash flow for two short term rentals. This move is what allowed me to gain lean financial freedom. 

Instead of building a $2 million nest egg to retire off of, I focused on cash flow to retire myself. 

In my point of view, it was easier to generate enough cash flow to cover my living costs through real estate than it was to build a $2M stock portfolio.

While I can’t blow money on luxury travel all the time, I am able to retire, but I have to be mindful of my spending, especially with short term rentals because it’s not as predictable as long-term rentals (but it’s more lucrative).

Stage 4: Lean FIRE

This is where I am now = Lean FIRE through cash flow!

Real estate gave me the foundation to pursue other passions, take more risk, and even explore new career options. 

My plan right now is to take a job that offers better work life balance even if it’s a pay cut because I don’t want to have to think about work when I’m off the clock nor work through dinner because a client wants a slide deck in the morning. I don’t need to love the job either. I just don't want to hate it! Plus, the income will really help me live very comfortably.

My personal time will be dedicated to my fiance, dog, and my other passions like content creation and operating a small business (gym).

Stage 5: REAL FIRE

This is the final stage of what I aspire to in my version of FIRE.

My other streams of income will provide an excess of income to allow me to completely quit a steady W-2 job.

I don’t plan to ever retire because you’ll never see me just relaxing at a beach. My dad retired a few years ago and he also couldn’t just sit at home so he still does some business with old customers from home and even volunteers at the local community center. This is quite common in Japan as well. A lot of taxi drivers are retirees who don’t want to sit at home.

The goal is for my passions to become my job.

Why I Chose This Fast Track Route

This plan isn’t for everyone. 

It made sense for me because I would’ve worked extra hard just to reach financial freedom sooner because I hated my job and I didn’t see a future in my career path. It was a means to an end. 

I chose real estate because it’s what I knew, but it doesn’t have to be real estate. It could be ANY business.

If what you’re doing works for you, that’s great! 

It didn’t work as quickly as I wanted it to for me. I only came to these realizations at the various stages because it didn’t make sense for my goals and I was willing to put in the work and take on the risks.

While I appreciate the FIRE concept and admit it’s a great starting point, the traditional FIRE route is just not the most efficient for everyone. 

If I continued on the traditional route, I would’ve had to work for another 5-10 years depending on how well the stock market performed. That’s 5-10 additional years that I would’ve had to endure work stress and long hours. Plus, that’s a lot of time I could’ve spent on my FIRE activities. 

If you’re struggling like I was in the beginning of my journey, I hope this was a bit eye-opening.

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