DINKS FI Before 40

Meet Sal and Marie

Summary: DINKs make 10 year plan to reach FI before age 40

Current FI Phase at time of interview (March 2022): Reached FID! Quit full-time W2 jobs. Now working remotely part time/freelance for fun, focusing more time on sleep, health, fitness, and spending time traveling to visit with family and friends, and checking out cool places domestically and internationally for fun

FI Strategies Used:

• Traditional 401k with match in Index Funds

• Turnkey real estate

• Index funds for Taxable Accounts

• Dividends

• Syndicated Funds in Self Storage and Mobile Home Parks

Special Sauce that made a Big Difference: Fortunate to hit 2 timeframes when low interest rates and appreciation on rentals allowed for cash-out refinances of RE portfolio, which we used to purchase additional properties

One Liner Advice: You can reach Financial Independence at any time and at any level of income, depending on your lifestyle and spending

How We Did It!

The Details (as told by Sal & Marie)

Year 0

Both of us were ambitious professional individual contributors in Corporate America, well established in the working world with 6+ years under our belt. Officially DINKs - Dual Income, No Kids. We’ve been told we actually were DILDOs - Dual Income, Little Dog Owners, which is also true!

At this point we were smart with our money (no credit card debt), but not strategic. We did easy things like contribute to our 401k to get a match at work, but also still had student loans, car payments, and frivolous spending habits like going to Target every weekend (and buying things whether we needed them or not) when we were bored.

We recognized our personal desire to reach Financial Independence before the “traditional retirement age” but also knew we did not want to have to sacrifice too many day-to-day conveniences to get there.

Highlights:

• Bought primary residence

  • 30 year fixed mortgage

  • 20% down from savings

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Comfortable but thrifty spending habits

  • Our norms are Gap clothes, Ikea furniture, Target household goods, and one overseas vacation a year-ish

• SAVINGS RATE: 33%

Year 1

We did a dive deep on education. Start listening to podcasts, reading books, scouring websites, and talking to people to understand how Passive Income can get you out of the rat race sooner (particular interest in Turnkey Real Estate investing).

Using the basic finance concepts that we were learning, we started tracking our spending, built an emergency fund, and started paying off all remaining consumer debt - car loans, student loans.

Highlights:

• Pay off student loans and car loans

• Build emergency fund

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 39%

Year 2

Decided to take the plunge and bought 3 out-of-state turnkey rental properties

Highlights:

• Bought 3 turnkey rental properties

  • Start making positive monthly passive cashflow

• Kept 401k contributions high enough to get company match

• ROTH IRA contributions

• Created separate emergency fund for Real Estate investments

• Got new job with salary increase, no change in spending/budget

• SAVINGS RATE: 53%

Year 3

Felt overwhelmed and inexperienced, and seriously thought of selling our 3 turnkey properties and getting out of the RE business.

Met with other investors to talk about the ups and downs of RE, were reinvigorated, and bought 2 more properties!

Highlights:

• Bought 2 more turnkey rental properties

• Kept 401k contributions enough to get company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 55%

Personal Note on INCOME & SPENDING - As our income increased over the years, our spending did not. This is how the savings rate increased dramatically

Year 4

Kept an eye on interest rates and the housing market and realized our house had appreciated in value enough that we could pull a fair amount of cash out of our Primary Residence and buy more investment properties to give us more passive cashflow.

Highlights:

• Cash-out Refinanced Primary Residence

• Bought 5 more turnkey rental properties

• Kept 401k contributions high enough to get company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 61%

Year 5

Time to make life-altering changes to execute the FIRE plan. We decided to sell our Primary Residence and used the proceeds to buy more investment properties to give us more passive cashflow. We also decided to adopt a more minimalist lifestyle, moving into a studio apartment and trying to only keep or buy possessions that brought us joy!

Highlights:

• Bought 10 more turnkey rental properties

• Cut expenses! (moved into studio apartment)

• Kept 401k contributions high enough to get company match

• ROTH IRA contributions

• Pursued promotion with salary increase, no change in spending/budget

• SAVINGS RATE: 68%

Year 6

Highlights:

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 66%

Year 7

At this point we were ready to shake things up. We were experienced investors now enough to know it was time to sell two underperforming properties in our portfolio. We also had the personal desire to pursue different jobs and relocate.

Highlights:

• Sold two underperforming turnkey properties

• Pursued (arguably undesirable - but we loved it) expat jobs with overseas benefits packages to increase take-home pay and provide the opportunity for a new life “adventure” together

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Got new jobs with salary increases and overseas benefits packages, no change in spending/budget

• SAVINGS RATE: 79%

Year 8

Highlights:

• Expat jobs with overseas benefits packages, increased take-home pay and opportunities for life “adventures”

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Pursued promotion with salary increase, no change in spending/budget

• SAVINGS RATE: 81%

Year 9

Highlights:

• Expat jobs with overseas benefits packages, increased take-home pay and opportunities for life “adventures”

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 82%

Year 10

Kept an eye on interest rates and the housing market and realized many of our properties had appreciated in value enough that we could pull cash out and refinance. This allowed us to buy more investment properties to give us more passive cashflow.

With this number of investments, we realized we had met our Passive Income targets for FIRE. While we were still enjoying the life “adventures” that working overseas provided, we were missing time with family and friends at home that could not be made up.

While it is hard to walk away from good paying jobs with golden handcuffs (like overseas benefits), it’s time to live the FIRE life we have been planning for all these years…

Highlights:

• Expat jobs with overseas benefits packages, increased take-home pay and opportunities for life “adventures”

• Cash-out Refinanced entire RE portfolio

• Bought 7 more turnkey rental properties

• Maxed out 401k contributions and got company match

• ROTH IRA contributions

• Modest salary increases, no change in spending/budget

• SAVINGS RATE: 82%

• REACHED TARGET FIRE NUMBERS!

Final Thoughts from Sal & Marie:

While this summary of the execution of our 10 year FIRE plan may seem straight forward and easily summarized in a series of bullets, we do not want to downplay the amount of discipline, dedication, effort, ambition, sleepless nights, tears, angst, doubt, frustration, and joy that we experienced along the way. If you’re already on this journey, you know how that feels. And yes, it’s worth it!!