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Posted about 4 years ago

The Journey To Financial Independence - A Few Life Hacks

I felt compelled to write a blog on Financial Independence (FI) and highlight a few of the “life hacks” that have had the biggest impact in my financial life. My hope is that you too can benefit from some of these strategies even if you choose not to pursue FI.


In the simplest terms, FI is achieved when your passive income (income you do not work for) is greater than your lifestyle expenses. It is a freedom of your time and an incredible luxury to have the option (not the obligation) to work. Financial Independence allows you to pursue the things most meaningful to you. For each person, this is different. FI can mean spending more time with family, starting a charity, traveling more, switching to an impactful/meaningful career, creating art and the list goes on. It has absolutely been worth a decade or so of forgoing many consumer trappings and pursuing FI.

P.S. - A huge shout out and dedication of this blog goes to my frugal parents who taught me one side of the FI coin…save, budget and live within your means. The other side of the coin, in case you’re wondering, pertains to investing, which was self-taught but we’ll get to that later…


For those looking for a simple straight-forward answer…here are the 4 steps to achieve Financial Independence:

#1 Earn as much income as possible, even if you have to start a side hustle

#2 Live on as little of your income as possible (for a short amount of time)

#3 Invest the difference into passive income investments

#4 Avoid debt (credit cards, student loans, car loans)

For those who would like to dive deeper, allow me to explain…


I was fortunate to earn a high income for several years while I started a real estate “side hustle”. Though I will point out, the work I chose was at the expense of exchanging my life for a paycheck. Literally…100 hour workweeks in the dead of winter…working outside in negative degree weather…far away from home. #Oilfield. I do not recommend exchanging your life for a paycheck; however, I do recommend that you seek to find YOUR highest and best-earning opportunity. Ideally doing something you enjoy or starting a side hustle for additional income (see step #1 above)

I learned over the years while pursuing several careers with salaries ranging from $15,000 a year to $150,000 a year, that people often set their lifestyle based upon whatever their income happens to be. As their income increases, so does their lifestyle. This is called “lifestyle inflation”. Don’t do it. In the oil industry, at the peak of my earning potential, many of my co-workers were living pretty high on life (paycheck to paycheck) whereas I was still living a lifestyle that might have looked more like that of a broke college student (…and saving 75% of my income). This high savings rate had a profound impact years later because I had invested these savings into passive income investments (see step #2 and #3) rather than spending it on lifestyle luxuries such as…


Instead of buying a new car, I’d buy a car in need of minor repairs that had been somewhat neglected. My parents actually bought my first car when I was 16…for $800. Sure, I didn’t win any popularity contests in high school for having the latest and greatest; in fact, my cars were often 10-15 years older than everyone else’s, but they were reliable, in good shape and cost $20k or $30k less than if I had to finance and insure a brand new one. In more recent years I’ve owned some luxury vehicles; a couple of Porsches, a Range Rover and a Lexus, but I’ve never paid more than $12,000 for a car, ever. P.S. avoid car loans whenever possible (see step #4). There are plenty of great/reliable vehicles out there for $5,000 or less.


Housing is a category where I saved a ton of money. First, I avoided college “dorm life” altogether and rented a fully furnished bedroom in a single-family house. My rent was around $450 a month and the room was offered as month-to-month without a lease. I later “upgraded” to a three-bedroom apartment and split the rent with 4 roommates, so I could live in a fancy “gated” community like a baller. I don’t think my rent went up during this phase, still $450 a month. After college, I bought my first owner-occupied home. It was a 2 bed 1 bath condo. The timing of this purchase was… ideal to say the least. I bought in 2009 as the real estate market and economy had just tanked. The government was offering an $8,000 tax credit for first-time homebuyers and you didn’t have to pay this money back! The condo I chose was a 1985, somewhat distressed, light fixer-upper listed for $103,000 and had previously sold for $165,000 just two years prior. I negotiated the price to $95,000 and I forked up $19,000 (20% down), minus the $8,000 tax credit = $11,000 to buy my first home. Shortly after furnishing the place with used furniture from Craigslist and garage sales (in good taste of course), I rented the spare bedroom out fully furnished for $600 a month. My mortgage payment was $641 a month. I had found a way to reduce my housing costs to $41 a month! I was on my way… Over the years I did many more “house hacking” strategies similar to this, by purchasing owner-occupied homes at a discount, renting out the spare rooms, fixing them up while living in them and then selling them two years later for a tax-free gain…legally. Yes, legally.


Would you pay $1,000,000 for a new Ford F-150? Would you pay $20,000 for a new refrigerator in your home? Of course not! Then why is it acceptable to pay 20x the price for food and coffee? Don’t get me wrong, I love coffee just as much as anyone else, but something I can make at home for 25 cents (or less), does not justify a $5 price tag when out in public. The same is true with certain restaurants. If I can make a healthy and tasty meal at home for $5 (or less) I am not going to spend 20x the price ($100) on dinner while out in public. Food and coffee can really add up over time. I saved SO much money over the years by paying close attention to food spending and being very choosey. I remember in college the food budget I created for myself was $2 a meal x 3 meals a day. Mind you, I was living on a part-time income of $10,000 a year. You certainly don’t need to take it as far as I did, but consider how much you’re spending on restaurants and coffee. Does the food and coffee really taste 20x better compared to a home-cooked meal or a Starbucks homebrew?


I paid for cable TV a short while, about 2 years in total. I “cut the cord” around 2011 and haven’t looked back. It’s not that I don’t like watching some TV, sports and movies, but the fact is you can likely find it online for free, stream it, pay $1-2 to rent a movie, or buy an OTA HD Antenna and enjoy free TV. When I add it up, I average less than $10 a month on these items. Compare that to $100 monthly cable bill or spending $20 to go to the movies, when you could have “movie night” at home for $2. It’s a choice.


You know what’s better than owning a boat? Knowing someone who owns a boat! I love that saying. Though I have not personally owned a boat or any similar type of “toy”, I have known quite a few friends and family members who have owned them. Sadly, I have never found a way to cheaply own these types of liabilities. Even if you were given a boat for free, the docking fees, registration, insurance, storage, maintenance and the requirement of owning a vehicle large enough to tow it often takes the fun right out of the sails. The same concept applies to RVs, second or third vehicles, motorcycles, jet skis, go-carts, you name it. I’m not against enjoying these luxuries, but it might make sense to rent vs own or even “pitch in for gas or food” and enjoy these with friends or family who insist on owning them.


On a final topic, this is one I feel deeply passionate about. Did you know Americans owe about 1.5 trillion in student loans? This debt crisis is a major contributor to delayed homeownership, historically low savings rates, and financial hardships many face today. It is also a major reason so many people are not pursuing a path to Financial Independence. They are trapped!

In my senior year of high school, like many students, I had no idea what I wanted to do with my life or career. I felt the societal pressure and noticed a negative stigma around not attending college, so I ended up attending to obtain an Associates Degree, but I was dead set against taking on any kind of debt early in life; that included student loans. I ended up obtaining a state-funded scholarship and attending a very inexpensive college to avoid taking on debt and graduated with a degree that has ultimately amounted to nothing in my working career. I got what I paid for I suppose. Another shout out to my parents for saving what they could for me to attend college! College just wasn’t my thing so I invested that money instead ;) My advice to high schoolers today is... if you have no idea what you want to pursue as a career, college is probably not the answer. At least not right now. Take a year off and travel or enter the workforce in a field that interests you, network and see what clicks. Avoid debt! P.S. this also includes credit card debt (see step #4).


I could literally write an entire book on the topic of investing, this has been my daily study for more than a decade, but for the purposes of this blog, I want to make it as simple as possible. Investing can seem overwhelming, intimidating and confusing depending on who you listen to, but here’s a simple way to think of it. There are two types of investing strategies “equity” and “income”. A couple examples of Equity Investing could include buying a stock at $10, hoping it goes to $15 and then selling it for a profit or buying a house for 100k and hoping to sell it for 150k. A couple examples of Income Investing could include buying a stock that distributes dividend income or buying a rental property and renting it out for cash flow AKA income.

In order to achieve Financial Independence, you need to focus mostly on income investing. The simple answer is to place your money into passive income investments and live off the cash flow (see step #3). I prefer real estate as my primary investment vehicle; you can also invest in high-dividend stocks, REITS, ETFs, bonds, annuities, CDs, notes, ATM machines, and the list goes on. But let’s keep it simple. I have roughly 80% of my investable portfolio in cash-flowing real estate. More specifically, I started investing in single-family homes in 2009 and later changed my approach around 2015 to invest in real estate syndications. A real estate syndication is an investment where several investors “pool” their money together in order to purchase a large piece of real estate like a 300-unit apartment building for example. Then each investor becomes a partial owner of the apartment building and shares in the cashflow and any equity upside as the community is improved, rents are raised to market level, and then the property is sold a few years later. The reason I prefer these “value-add” apartment syndications is that they literally require NONE of your time or effort and there is a lot less speculation involved when compared to stock market investing or flipping homes. Syndications are completely passive and professionally managed by experienced teams, not by you. I tend to invest in deals that offer monthly cash flow distributions (income) as well as participation in the equity upside upon the sale. Historically speaking (2015-2020), these types of investments have yielded double-digit returns in my portfolio and apartments generally perform much better in recessions when compared to single-family homes or the stock market overall. *Note: Being a passive investor is critical. When I owned single-family rental homes, it was more like a part-time job and a part-time investment. Keep this in mind if you goal is the scale your portfolio; you will likely find yourself being a professional landlord. In my experience, there were always issues and I did not enjoy managing tenants, fixing toilets, applying for loans, stressing about late rent and losing receipts for tax write-offs, just to name a few…


Financial Independence is simply a choice. It doesn’t have to be complicated, but it does take some time and effort if you aspire to achieve this goal. So the real question is… what is your time worth? If you could retire at 45 vs 65 or even 60 instead of 65, what are those years of your life worth? Are you willing to create a budget and cut spending in some areas of your life? Are you willing to learn a new investing approach? Are you willing to pick up a book and learn a new concept? Are you willing to start a side hustle?

There’s lots of talk in the early retirement world about delayed gratification, but you really don’t have to delay all that much, my wife and I just go about things differently. We drink great coffee, we drive a luxury vehicle, we eat healthy meals, we travel domestically and internationally multiple times per year, we live in a downtown neighborhood overlooking the city. But to turn all this into a low-cost lifestyle, it requires being willing to learn some new skills, focusing on passive income and thinking outside the box.

To Your Success

Travis Watts

Comments (4)

  1. Great Article! Well done @Travis Watts

  2. Love this prospective.  I'm living since if this but need to brush up on the rest.  ----Great article.  

    Robin in Texas

  3. A good overview. Thanks, Travis!

    1. Thank you Nathan. Appreciated