Tell our readers a little about yourself, your blog, and your early retirement.
I'm an Air Force veteran and now full time entrepreneur. Given that I'm 53 and the average retirement age according to Gallup is 66, I guess I FIRED 13 years early. You may be saying "What? I thought he was retired!" Ah, that's the joy of FIRE. Now I choose to spend part of that extra time as an entrepreneur. I don't frame that as "work."
In addition, my spouse and I have consistently volunteered over the years and plan to continue to volunteer in FIRE mode.
Tell me about the early days. How did you get started?
It's very important to have a plan to FIRE and not only that, but both spouses have to be on the same page. One of the practical things we did early on was sit down together once per quarter and review our monthly budget. Every dollar needed to be accounted for in order to achieve FIRE in the future. For example, we took vacations, but they were budgeted for and were not terribly expensive. We also had a weekly entertainment budget and having that number kept us on track. If you don't know where to begin, Dave Ramsey's book Total Money Makeover is an excellent place to get started.
In addition, there are three related financial elements that helped us achieve FIRE:
investing in the stock market early and often,
buying rental property
testing our entrepreneurial venture on the side while I had a full time job.
First, I graduated college with only $3000, which just about covered my first month's rent. From the outset we (make sure your spouse is on board!) committed to investing at least 10% of our gross into the market. At first I picked stocks, but realized I'd do just as well with an index fund. We ended up focusing on the Vanguard Total Stock Market Index Fund.
Second, we bought a house just about every place we moved then rented it out when we left. It's magical how tenants pay your mortgage and the equity just gradually builds, and builds, and builds. Both spouses need to have a certain amount of risk-tolerance to be landlords, though. When things break, it's no longer your home. It's just a business.
Third, I tried my hand at a woodworking business about 3 years from retirement to see if it was viable. We had a relatively big loss the first year because we invested heavily in tools. We had a narrow loss the second year, then turned a profit the third year. That third year I realized the business could scale and that it was viable. I highly recommend testing out your concept early to see if it's a good idea.
Those three elements together allowed us to FIRE.
What roadblocks did you hit along the way? Any mistakes we can learn from?
Two of the biggest gut punches were losing money on our first rental and also the stock market crash of 2008. As far as the rental, we had put all of our money at the time into 20% down on a condo in Los Angeles. We were able to rent it out when we left, but foundation issues developed because the condo was on the edge of a canyon. We ended up selling at a loss and lost our 20% down payment. We were back to square one. Lessons learned: do your due diligence on property and stay the course. Our other properties were much more successful. Which brings me to another lesson learned. The more properties you have, the more your risk is spread out as long as you have positive cash flow on each.
As far as the stock market, we "lost" 25% of our portfolio in 2008 and it was really tempting to cash some out before we "lost" even more. We doubled down and continued to invest. The market roared back and we regained everything and then some. Sometimes people think the market is risky, but over the long haul it always goes up.
What does your lifestyle look like? How were you able to save such a high percentage of your income?
It's important to start setting aside a significant portion of your gross income because once you start, you won't miss it. In addition, whenever there was a raise we invested half and used half to increase our standard of living. We are also pretty frugal. We don't buy new cars any more and our two cars are 15 years old. Cars are money pits; don't waste your money on new cars. We also go on vacations, but we budget for them over the course of the year.
Many of the things we like to do are free such as cross country skiing, cycling, and hiking. Living within our FIRE income has not been a challenge.
Have there been any unexpected negatives or issues you have had since retiring?
I don't know if I'd call it a negative, but one of the toughest things to grapple with is there is absolutely nothing holding you back from pursuing your dream. Sometimes we put ourselves in what Plato called a psychic prison of our own making. It can be tough to break out of that psychic prison and just let yourself go to pursue that vision for your life. I'm still working on that.
What books, tools, resources do you recommend to others?
I found Derek Sivers book Anything You Want to be very helpful. He talks about how entrepreneurs are creating a little universe and that they should think about what their vision is for that universe. For example, early on I had several requests for on-site work, but the more I thought about it the more I figured why should I trade one commute for another. I much prefer doing shop-based pieces. I deliver finished pieces occasionally, but typically the clients come to the shop to pick up their piece. Then I'm spending more time creating and less time driving around. Those types of things an entrepreneur should think about very early on before they get stuck in ruts they don't want to be in.
What's next for you?
I'm currently working on woodworking commissions and ramping up my volunteer work. Every day, I wake up when my body says it's ready to wake up, make a cup of coffee, make my wife some bacon, then plan my day. FIRE is incredible.