Financial Independence Forks in the Road

I love talking about Financial Independence and the dream of early retirement.  Here at Even Steven Money the dream has become a journey with steps being taken to the final destination or like one of my previous posts, the Early Retirement Blueprint towards building the dream house.  I am a strong believer in multiple streams of income as stated in my ER Blueprint, similar to Financial Samurai except my current goal is not $200,000 in passive income, although he does make a pretty strong argument that this is the correct amount for living in San Francisco.  My goal of reaching Financial Independence is less than 5 years away and while it’s easy to see a cloud in the sky, it’s more difficult to know where that cloud will end up. Which brings me to my morning walk to the park with my dog Angel and my beautiful wife Mrs. Even Steven.  We know that our plan is to declare Financial Independence and have the financial freedom to choose our next adventure, but there is so many forks in the road that come up along the way, how do we know which way to turn?

My original blueprint made a simple assumption, Even Steven Money would live in Chicago until both rental properties were completely paid off and then look to move to Florida, closer to Mrs. ESM family and the opportunity to enjoy nice weather in the winter, and no state tax.  Moving back to Florida would create an extra stream of rental income, which would offset or equal any property we would rent or buy in the Sunshine State.  Along the way we will reach certain milestones that deserve a visit back to the ER Blueprint.  We recently hit a milestone with my final payment to my student loans and a fork in the road occurred.  Many roads are available as my decision to payoff personal debt, mortgage, or invest needed a decision.  These options were all in the Blueprint, so nothing to get to worked up about as all roads were still part of the plan, despite that fork in the road.

The next milestone is December 2016, this is the month our Florida rental property will be officially paid off, this lies a Paul Bunyan sized fork in the road and one that we continue to discuss as time goes on.  The first fork starts January 1, 2017 and the roads are plenty.  Here a few of the roads we can choose:

  • Stay on the same road and move right to the next rental property and pay off this property (original plan, OP)
  • Take a small break from paying off debt and then proceed with the OP
  • Take a small break and pile up cash like the Great Depression is coming
  • Take a small break and pile up cash for a house in Florida***
  • Take a small break and save up for a European vacation, it’s our reward for paying off the house so quickly and then back to the OP
  • Divert from the OP and take all income that was being allocated to the property and move to investments to create a larger stream of secondary income, choosing to reap the rewards of the market and the low interest rate with our current mortgage

As you can see we have many options to take beginning in 2017 and very similar to my decision with my next step after paying off my student loans, these options do not divert from the Blueprint very much, with a small exception that leads to the Paul Bunyan sized fork in the road.  Which as you may have guessed it is piling up cash for house in Florida.  Piling up the cash in 2017 does not concern me since it is part of many of the plans and the only value we would be losing would be from the interest repayment of the mortgage or any investment income this would create, since it is a small amount of time, I can look out of the window for a few moments while this occurs, just not to long.

The Paul Bunyan sized fork in the road begins with the fact that I made a promise to revisit our plan in 2017 and give serious consideration to moving back to Florida.  A few things would need to happen for me to feel comfortable with this move, but as a wise man once said “Happy wife, happy life”. Here is what would be 100% necessary for us to move in 2017:

  • Florida home would need to be paid off with a extra comfortable emergency fund
  • Obtain job(s) equal or greater than our current positions or obtain permission from our current employer to work from home…… in Florida
  • If income is equal or greater, understand that it is not necessary for the other individual to work, rather any additional income would be a bonus

In the case for moving to Florida, the house situation could also face multiple paths including:

  • Moving in to the rental home recently paid off (not ideal since we would be giving up rental income)
  • Moving in with Mrs. Even Steven’s family, living close to rent free until we finish up the FI plan or make the decision to rent/buy our next property, this could be as little as 6 months and as much as 2.5 years
  • Renting for a year or more would give us the chance to look for a property that would fit our needs in ER, checking out neighborhoods, prices, and any other forks in the road we need to consider (in-law suite for my parents, multi-unit for more passive income, etc)
  • Purchasing a home is probably Mrs. ESM #1 choice and my least favorite.  While I think buying a home will be in the cards in the future, I do not want to move Day 1 into a new home, I want options and I see this move immediately tying our hands for travel and also locks us into our current location for the foreseeable future.  I think FI is a time to be flexible and this move takes away some of our flexibility and freedom we are fighting for.

What scares me is the amount of forks in the road that we can see ahead.  I know that staying in Chicago for the next 5 years makes those forks in the road easier to manage, but I also know Mrs. Even Steven looks forward to the day she can share more time with her family and have warm weather year round.   In a perfect world we would just move up our FI date to early 2017 and make the move in 2018 when we have a road directly in front of us that says “Early Retirement Ahead”.  With any plan you are bound to face bumps in the road and a time when you can go left or right, honestly I look forward to make financial decisions that affect our long term financial plan as long as we are making them together with the same goal in mind.

 

Have you faced a fork in the road on your journey to Financial Independence?  Do you see one coming up ahead?

27 Responses to “Financial Independence Forks in the Road

  • My original logo idea was a road sign that says Early Retirement Ahead. I like how you think!

    The benefits of high cash flow are having lots of options and possibilities. I think that is a good thing.
    Vawt recently posted…A Budget FailMy Profile

    • EvenStevenMoney
      1 year ago

      Haha, love the title! Having cash flow options might be the answer to many of these potential forks in the road, agreed.

  • Free cash flow is one of the most important items in everyone’s financial life. Cash flow gives you options when opportunities or unexpected difficulties show up. I’m a fan of the way you think out your short-term future to anticipate the different scenarios you can take.
    Thias @It Pays Dividends recently posted…It Pays Dividends: The BeginningMy Profile

    • EvenStevenMoney
      1 year ago

      Thanks Thias. Cash flow does have a certain way of helping in one’s financial life, short or long term.

  • It really cool to see you think through the next steps of your FI blueprint since paying off your student loans.

    What’s nice about blueprints is that it provides a framework of thinking, and not an ultimatum. Every plan needs some room for flexibility when priorities and goals change.

    I actually plan to make a slight change to my 7 year mortgage payoff goal. The the 7 year time frame for the execution of the plan itself. Instead of locking up all that extra money into the mortgage, I am going to open up a separate account and start stacking the extra payments in there.

    It will be like your option above “pile up cash like the Great Depression is coming.”

    Looking forward to reading about how you decide to proceed forward.

    Cheers
    Dominic @ Gen Y Finance Guy recently posted…Quick 2015 Mid-Year ReviewMy Profile

    • EvenStevenMoney
      1 year ago

      I’m just as interested to see what type of account you put your stacking extra payments in, especially if it’s for the anticipated 7 years. Agreed on the blueprint that it is more of a framework that can be developed into your specifications.

  • Florida sounds like a good bet! I love that they don’t have state income taxes. The sunshine state tax here in California of 10-13% is just such an arse kicking!

    It’s just so hard to move once you’re used to the quality of life here.

    If I make double I make now, I think I will finally make the move.
    Financial Samurai recently posted…It’s Virtually Impossible To Escape The Allure Of MoneyMy Profile

    • EvenStevenMoney
      1 year ago

      Just based on taxes alone, I 100% agree, Cook County and Chicago is brutal as it sounds like California is as well. I wonder if you would move to a tax free state or just out of California in general, well when you make double I guess I’ll find out;)

  • I like the multiple scenarios spelled out, and I would go with the European vacation reward option. Then get back to the OP or pay off the other house. That would free up the payments towards it, and help buffer any income changes in 2017 whether you stay or move.
    I’m interested to see how it pans out though.
    Mr. SSC recently posted…Forever In Blue Jeans? Done!My Profile

    • EvenStevenMoney
      1 year ago

      I don’t mind the European vacation option one bit, just slows us down a couple months as you probably know, FI and ER are not very fond of this move;) The only way paying down the house would free up payments is if we paid ahead on the mortgage, which we do not plan to do, the payments would still go to principal, I suppose if we refinanced that could free up payments.

  • I definitely don’t think you should buy a place prior to moving to Florida. House hunting is a headache even when you live in the same state. Give yourselves some breathing room by renting or living with family. That’ll give you some time to settle on a good place, rather than compromising too much because you want *somewhere* to move in.

    As for the European trip, you just have to decide whether it would refresh you for the final push or stress you out because the money could go to your early retirement goal.
    Abigail @ I Pick Up Pennies recently posted…New number, who dis?My Profile

    • EvenStevenMoney
      1 year ago

      I love the advice about the house and couldn’t agree more, please talk with Mrs. Even Steven for me:)

      Good thoughts on the European trip, I wonder if a 2-3 month hit to our ER goal would stress me out, good question.

  • Those are high quality problems to have. I’m enjoying watching the journey.
    Adam @ AdamChudy.com recently posted…How to Graduate College Debt Free – Part 6. Financial AidMy Profile

  • Isn’t great that there are so many options for you that you can choose from? That’s the power of becoming financially independent. Will be interesting to see what you do.
    Tawcan recently posted…Instilling financial responsibility in kidsMy Profile

    • EvenStevenMoney
      1 year ago

      You are right it is great, I should be looking at this from that point of view and see that I have come so far to have such great options available. Thanks Tawcan!

  • I’m with you on not buying a house so quickly if you moved to FL. When you’re not familiar with an area, I think it’s better to rent first to see the lay of the land before making such a big financial commitment. Five years is pretty quick, but I guess if you can “work from home” then going to a state with no income tax makes sense. I think that moving to a lower cost of living area for me would make financial independence much more REAL but being that both my family and my wife’s family live in the NYC area…it makes it hard to leave. Being that we plan on staying, I’m forced to be more aggressive so focusing on using leverage by buying more rental property rather than paying them off.
    Andrew@LivingRichCheaply recently posted…I’m Frugal…Now What?My Profile

    • EvenStevenMoney
      1 year ago

      Certainly practicing a little geographic arbitrage can help the FI Date be that much sooner. Leverage and property always make me a little nervous, but I know exactly what you mean to get to that point where the rental property income will be equal or greater than your expenses.

  • I think its so funny when we look at our plans, and think, “oh shit, I’m a different person now than I was a year ago,” as if the changes are so unexpected.

    We did something similar when we moved down to Raleigh for my husband to start his PhD work. I thought I would be happy to work for a few more years while he went to school, but it turns out that I want to be home with my son sooner rather than later. Now, that’s the goal we’re working towards.

    • EvenStevenMoney
      1 year ago

      Certainly goals and feelings change especially as you are thrust into a new situation. It may be the same plan but the scenario feels very real when you are standing right in the situation.

  • I think you cant go wrong with any of your options although some will slow down your eventual goal. I kind of like the europe option!! 😉 Only because I love travelling.

    I have my own fork in the road coming up as well although I dont know if it qualifies as a fork in the road. Marriage and Kids are in the horizon and I see this probably happening next year. I mean Im happy about it and want to do it but I know this will really slow down my aggressive goal to reach financial freedom early.

    I guess Ill just cross that path when it comes for now.

    Looking forward to seeing how it plays out for you.
    cashflowdiaries recently posted…Top 8 FREE Real Estate Investing BooksMy Profile

    • EvenStevenMoney
      1 year ago

      Marriage was a life changing event for me, it made me such a better person marrying Mrs. Even Steven. I believe it put all my good quality traits out in front and left many of my bad ones behind, I hope it does the same for you:)

  • I’m with you on the multiple streams of income. I personally believe in this for a few reasons:

    1) If you have a job, it can always go away – you don’t have control
    2) When one stream decreases another usually increases – I have seen this several times over the last 8 years of earning money from many different areas
    3) It just gives you a sense that your monthly income isn’t “all or nothing” or dependent on a single stream

    Good idea on Florida…I wish I could get away from state tax. California is T-O-U-G-H….but San Diego is a nice place to live….even with the “sunshine tax”.
    Jason recently posted…Burial, Funeral and Final Expense Insurance ExplainedMy Profile

    • EvenStevenMoney
      1 year ago

      I’m 100% with you with multiple streams of income, my early retirement blue print points to getting a catalyst like real estate, etc and moving on from there of course your job is really the start of it all.

      I can’t argue with you very much on California, especially San Diego, but if it were a state tax war, I would win, hands down!

  • Good luck with your decisions — we recommend NOT moving in with your inlaws. LOL

    Our financial fork in the road right now is deciding how much to allot to prepaying our mortgage vs to our index funds that will sustain us in early retirement. For our own peace of mind, we want the house paid off already, but we know that the better decision on paper is to put as much as possible into investments. Fortunately, it’s not an all-or-nothing decision, rather it’s one we make a little bit at a time, month by month.

    • EvenStevenMoney
      1 year ago

      Very good point on both accounts! The in-laws and the all or nothing approach. Only thing that I do better with is an intense focus which does lean towards an all or nothing approach, but I’m looking to balance that out as time goes on.

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