The Action Plan

The Plan to be able to acquire more Coin is something I've thought long about. In order to have a solid plan, however, you need to know where you want to end up going. So what is the end destination for me?

The Dream: I want to be able to have complete time and money freedom by the time that I am 40 years old (weird to think about). To me, this means that my desires aren't shackled by the normal constraints of providing for my family and responsibility to work for someone else's Dream. Some other dreams that this time and money freedom will allow include: 1) creating a shelter for homeless veterans and other homeless people 2) being able to travel around the world with my wife 3) having time to write a classically epic Sci-Fi/Fantasy series, Brandon Sanderson style 4) develop other businesses to increase cash flow 5) invest all of my time in raising my children 6) serve other human beings in my Church and in my community and 7) be able to tithe $25K annually to my church.

In concrete figures, I want to have my primary residence paid in full ($156K), I want to have my vehicles paid in full (~$16K), and I want to pay off the student debt that my wife and I have accumulated ($85K at the time of writing this). Further, in order to be able to have time and money freedom, I will need to have a persistent cash flow to my business in the amount of $10K per month post taxes, equating to approximately $120K per year, post taxes. 

So altogether, I need to earn approximately $272K up front to satisfy the debts I've accumulate and I need to have systems and properties in place to meet my financial freedom number of $10K per month, post taxes. If I were to assume that each property I had cash flowed $300 month (after property management fees, PITI, repair costs, etc.), which seems a reasonable number based on research done on this site, than I will need to have 33.33 units cash flowing that figure consistently. Rounding up, and including a few more units for additional safety and conservative estimating, 40 units would seem to be a reasonable number of properties to own and rent for me to meet my financial freedom number. 

Further, I will also want to earn a lump sum of around $300K to pay off debts and other costs that will come up throughout the course of life, which will be earned by fix and flips. If plan my numbers on any property that I evaluate to have a minimum profit margin of $20K per house (after costs, fees, and taxes), I will need to fix and flip 15 homes at that margin to meet this goal. But, again for conservative estimating and safety margins, I think it would be wise to have a goal to fix and flip 18 homes at that minimum profit margin, allowing a buffer margin for mistakes, unforseen circumstances, and other unanticipated costs that would result

So, my goals broken down into more bite-size numbers: 40 units cash-flowing $300 per month and a lump sum of $300K generated through fix and flipping 18 properties.

That is totally doable by the time I am 40. SO doable.

I also plan to diversify my investment portfolio by investing in low cost index funds, a life insurance policy for my family members, stocks, and other types of paper investments. This revenue will not be included in the financial freedom number and nor will they be detailed as precisely up front because these investments haven't received any meaningful time and attention at this time. I will research each of these options so that I can have an idea of their costs and anticipated revenue to my monthly income figure. I am focused on the Real Estate aspect because I feel like that is the best point to start off with and because REI will give me the money to invest in these other strategies. 

The way I will begin The Plan is start off fix and flipping. I will detail that in the next post, as this blog is an additional way to record my business plan. I hope that it will be an insight into the mind of a RE Investor and how a plan comes together.