The New Surplus

Well my garden is in full swing. My composting worm population has tripled. I’ve explored a lot of my new hometown on my bicycle. I’ve been playing quite a bit on the guitar lately. And I’ve been seeing a lot of my friends and family. Plus my tenants are all doing well with no complaints to hear of.

The quiet life suits me. Though it is a bit dull and uninspiring when it comes to blogging material.

The good news for my readers though is that I’ve accepted a job offer, set to commence in just a couple of weeks. So I should have plenty to complain about very shortly. My job search only lasted about six weeks. And it consisted of a few different tactics including talking with my old school buddies to see about opportunities at the places they’ve been working at for about a year now since graduation. Also in taking advantage of both my law school and undergrad alumni job boards. – Checking out the typical job search sites. And mentioning to all my friends and family members whenever I would visit them that I was back on the job market just in case they may have heard of anything suitable. I was fairly selective about it and after sending in maybe 15 resumés I wound up attending four job interviews and receiving two offers, though one interview went very well just a few weeks ago and I was told I should “definitely expect a call within a couple of weeks,” but that was three weeks ago now so whatever.

I wound up accepting an offer for, what I think will be, a fairly low stress position at a local satellite office of a Boston-based non-profit organization. I picked it mostly because it’s a short commute, has a kind of quirky/casual office environment that I think I won’t mind too much, and there’s no expectations to ever put in more than 40 hrs/week.

Interestingly enough, my nearly twelve month break from both school and work wasn’t even brought up in one interview, and for the others, when I explained I was a real estate investor and spent some time rehabbing a place, plus took a month-long trip to Africa, suddenly we were talking about the real estate market and Ghana instead my resumé gap.

I’ve decided I’m going to keep working until at least the following goals have been reached, in order of priority:

1. I buy two more rental properties with cash (bringing my total to 4).

2. My BF, and likely future spouse, has 4 properties of his own. It won’t be any fun for me to quit my job if my partner is still limited to 4 weeks of vacation a year. He’s on the road to buying his first place this winter with all cash. I told him I’d contribute 50% towards his 2nd property to speed things along. And he has great credit and a long work history so the plan after that is for him to take out a home equity loan on one of his first two properties in order to purchase two more. So we would each have four rentals bringing in money. Which, incidentally, means that the day we marry will likely also be the day we enter the millionaires’ club given our potential combined net worth.

3. I rehab a house and offer to sell it to some close friends of mine, a married couple, at a discount, something over my costs but below market rate. They’re great people that have grown up in some difficult circumstances and have had limited help from their families and I want to help give them a leg up. But if they refuse the offer or it doesn’t work out I would just sell the place at market price to whoever.

4. I buy/build a bunch of stuff (or at least have the money set aside for it). On the list right now: An alternative energy vehicle, rebuild the 2-car garage at our house that wasn’t really built right the first time, a grid-connected solar pv array, a small in-ground pool, and a nice second-hand RV.

 

I could quit after reaching goal #1 and then just use passive income to finance the other 3 goals. But that would stretch things out over the better part of a decade whereas, if I worked, it could all be done in less than two years. Which, so long as I don’t absolutely hate my job, I’d prefer to do.

So, for the last several months I’ve been living off of passive income from rentals. And my income has exceeded my expenses by about $500/month. Now, with this job starting up, my income will exceed my expenses by about $5,000/month. So I should be able to save up for a couple of more $25k houses fairly quickly. And when I start collecting rent on those I’ll be looking at closer to a $7,000/month surplus. Which makes the prospect of reaching goals 2,3 and 4 seem fairly trivial.

That’s part of the power of being FI. All my expenses are already covered by my rental income so I can save 100% of my earnings from my labor.

I know just from reading my own archives that my plans often adapt as circumstances change, so who knows how closely I’ll stick to this particular path. But working my way down it can only lead to good things, so I’m not going to worry about that.

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7 Comments

  1. lurker
    Posted July 2, 2013 at 10:57 am | Permalink

    completely impressive, as usual….hope the job is fun or at least delivers good blogging material. welcome back to the working world!

  2. Posted July 2, 2013 at 12:19 pm | Permalink

    When you get married you’ll be in a position like my wife and I–DINKs, dual income no kids, so together your net worth trajectory gets even steeper.

    Man, I wish there were $25K houses to buy around here. It would be a blast to work on them.

  3. Posted July 2, 2013 at 1:48 pm | Permalink

    I love your goals! The goal of helping some friends with a property is particularly cool. All the best in achieving those quickly and enjoying life in the meantime, as I’m sure you will.

  4. Spoonman
    Posted July 4, 2013 at 1:38 am | Permalink

    It’s really awesome that your passive income exceeds your expenses by $500/mo. It sounds like you have a nice path forward.

  5. Tim
    Posted July 24, 2013 at 6:08 pm | Permalink

    I just read all your archives, and they are very inspirational. Thanks for letting me share the journey. Whether you know this or not your writing portrays you as very optimistic which I find refreshing.

  6. alapolo
    Posted July 27, 2013 at 11:04 am | Permalink

    Hi again, I just had to leave a comment and say that you’re awesome. All luck in achieving the goals which I’m sure you’ll manage in your sleep.

    Thanks to much inspiration gotten from this website I’ve now moved to the countryside, set up a vermicompost (it’s in the early phases), gotten full control over my economy and I’m also brewing beer. I just thought I’d let you know, since, as said, this blog has definitely been at the very top for inspiration in my quest to ditch 40-hour weeks in preference of alarm clock-less living in harmony with a few animals.

    Thanks again, hope your summer is as good as here, all the best from Norway!

  7. Posted July 29, 2013 at 10:04 am | Permalink

    This is great! First time to your site and congrats on the new position and I like how you not only have goals but the plan to achieve those goals. Finding a 25k home here in FL is like finding a needle in a hay stack. How are you finding those homes and do they need full rehab?