Personal Finance

How I’m Using My Newfound Freedom After Retiring Early

Expertise: Landlording & Rental Properties, Personal Finance, Personal Development
32 Articles Written
taking-risks

Well, BiggerPockets, I did it.  Now what?

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Making “the jump” was incredibly scary and empowering at the same time—the only way I can describe my first month after officially cutting the cord is exhilarating. I knew I had the numbers. For an entire year, I could have lived financially independent (FI) just fine. Early retirement was mine if I wanted it, but I wasn’t ready yet.

I knew I had built up a nest egg to carry me through if ever needed it. What helped me was thinking that if something happened, I could always go back to work. And if I couldn’t go back to work, I could coast a year or so to figure out my next move.

How I Got Here

I've been fairly outspoken on discovering Mr. Money Mustache (MMM) who "retired" at 30. I say "retired" because he still works, but on his own terms! His real estate posts led me to BiggerPockets (which dominates any real estate-related search engine entry). I devoured any podcast or article I could find and found myself investing in real estate very soon after, in early 2015.

Four properties by the summer of 2017 quickly became seven, which quickly became 10. Then, I slowed down. Why? Because I reached FI and then some.

(Disclaimer: My portfolio isn’t 100 percent real estate, but without real estate, I may not have had the courage to make the jump. It’s hard to say.)

wealth-lesson

For Those of You Holding Back or Too Nervous…

I get it! It's scary. What made my transition easier (and likely even mentally possible for me) was creating bank accounts for what I called my "FI alternate world." I had all my investment money coming into a bank account outside my primary (primary being where my paychecks came in and bills went out). I only used money from the investment income to pay mortgage, bills, etc. After a year, I saw what was left (not much, but still more than I thought) and made the jump. What was left still more than covered the changes in lifestyle (health insurance mainly) that I would need to now pay for in full.

Related: The Surprisingly Simple “Secret” to Financial Freedom Most 9 to 5-ers Overlook

I did this for a year—a year of ups and downs, planned and unexpected expenses.

Reactions to Early Retirement

Others’ reactions were kind of surprising. For me, early retirement was about stopping the desperate need to push forward and plan out every detail of my life. Most people are very supportive, confused, and excited about it (to my face, anyway).

The number one question I got right after I stopped working was, “What are you going to do now?” And if I’m reading between the lines from some of those people, it’s, “How are you going to contribute to society now?”

What I’m Doing with My Newfound Freedom

Currently, I’m loving it. My phone provider has this buy one/get one movie ticket deal on Tuesdays. I don’t go to movies much, but I caught a matinee a few weeks ago (Spiderman for those wondering) for $2.50 a person. I rode my bike to get some groceries and tried a new recipe. All those things that weren’t a priority while working full-time are suddenly things I have time to do.

It’s still hard to get off my butt to do them sometimes, but most of the time it isn’t—because what else am I going to do?

There are random side effects to this vacation/new way of life/retirement. Leaving the house is sometimes a chore in itself if it isn’t for something you particularly want to do. I might think to myself, “I need to go all the way over there for an appointment?”

But at the end of the day, I may also think, “I’ve been home all day. I am really looking forward to some beers tonight with friends.” I’m able to live more in the moment.

real-net-worth

Worst-Case Scenarios

I made the plunge this summer after running through worst-case scenarios (rents go down, markets crash, healthcare costs increase, etc.) and realizing that I would still come out positive. If things got worse than that, I would still have a big enough nest egg to cover me for a few years before I started worrying. I’d be OK taking a few years of early vacation and rebuilding that egg if I needed to.

Related: Life Hacking in Pursuit of Financial Freedom: How I Add $1,500+/Mo to My Income

Not only that, but the real estate portion of my portfolio is diversified (as much as residential real estate can be, I suppose). I can rest easy knowing that if something affects my properties in one state, the other states may not be impacted.

It’s important to note that my real estate portfolio alone covers my mortgage and bills for the year, but my paper assets also contribute a good bit of income. This gives me peace of mind regarding exposure and risk.

Next Steps

Overall, living financially free for one month was pretty awesome—and seeing the fruits of my “FI alternate world” at the end of the year was even better. That’s ultimately what gave me the courage to make the jump.

Will I stay retired? Maybe not. Perhaps I’ll find a job that allows me to work remotely. I’m a hard worker and operate under the “achieve” schema. But for now, I’m going to spend some time on myself, develop my business, and soak in life without planning too far ahead. We’ll see where it takes me.

What would you do with a month of early retirement? If you’re in a similar position, what has your experience been?

Weigh in below!

A longtime writer and consumer of all things related to the FIRE (financial independence retire early) movement, Chris Prit went from working 50+ hours a week to less than 20 thanks to her real est...
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    Rob Sawyer Rental Property Investor from Syracuse, NY
    Replied about 3 years ago
    Congrats Sarah! Thanks for blogging about your experience and subsequent success! Although I’m not there yet, I’m working on it and look forward to learning more. Your story is inspirational so keep up the good work!
    Stephen Torti Investor from Providence, RI
    Replied about 3 years ago
    Congrats!!
    Philip J. Russell Accountant from Sacramento, California
    Replied about 3 years ago
    Congratulation Sarah and best wishes for continued success!
    Andrew Kougl from Chula Vista, California
    Replied about 3 years ago
    Congratulations! That’s what we all strive for. I’m beginning with a HELOC approach myself and wondering if you started out just putting 20 percent down or did you buy those first properties outright/pay them off before you bought more? A lot of people seem to take the route of buying many doors at $100-$200 cash flow per door to achieve FI, but with the number of properties it sounds like you took a different approach.
    Anthony Gayden Rental Property Investor from Omaha, NE
    Replied about 3 years ago
    Honestly, I never liked the financial advice from those who said that I should make just enough money to cover my living expenses and then I would be “financially independent”. To me that sounds like a fancy term for BROKE. If working hard at my full-time job and hustling hard on my real estate means that I am “dependent”, so be it. If I decide to exit from my full-time job it will be only so that I can dedicate the 60-70 hours a week I currently spend working at my job to my business instead.
    Austin Youmans Realtor from Vancouver, WA
    Replied about 1 year ago
    Congrats! I am right there with you figuring out what I will be doing next
    Leigh Guthrie from Washington D.C., Metro
    Replied about 1 year ago
    Excellent article! I'm motivated.