(GCC: The transition from “earning and saving” to retiring (early) and “spending” is daunting for many and terrifying for some. We analyze, examine, cross-examine, think, over think, and then analyze some more… So what happens when you ultimately pull the trigger? 3 years ago I provided some feedback* to Mr & Mrs NYC as they were going through these mental gymnastics. Now, let’s check in with them as they hit their 2-year and 3-year early retirement Anniversary, respectively, and see how they managed that transition and their Escape from New York. tldr: After reading their story, I’m super jealous. What a truly amazing and rewarding life!)
A few years ago, we were in our early 40’s, married with two cats, living in NYC, and working high-pressure jobs in careers where we achieved success but not much personal fulfillment. GCC performed a financial review for us and opened our eyes to an opportunity: if we sold our Manhattan condo and moved to a lower cost of living location, we could quit our jobs immediately and live off our savings — according to the math behind the 4% rule, at least.
(GCC: People read everything I’ve written about Real Estate and automatically assume that I believe owning real estate in any form is a terrible idea. That is understandable, but is only mostly true :) When consciously entered as a real business and with a compatible personality, rental real estate can be a capital friendly, cash flow friendly, and tax friendly path to Financial Independence. In fact, this is the approach I recommended to my own brother. Today, Coach Carson enhances our Never Pay Taxes Again series, paying no taxes with rental properties.)
Jeremy set the bar high for early retirees. While most of us aim to minimize or optimize our taxes, he wrote an article that took it to another level entirely. His crazy idea was to Never Pay Taxes Again!
After reading Jeremy’s article, I began to look more closely at my own tax returns. I realized that most years I also paid little or no income taxes. And it turns out I used the same core principles Jeremy explained, except I did it with real estate investing.
So, this is my turn to show how to never pay taxes again (or at least keep them to a minimum). I’ll build on the core principles you’ve learned from Jeremy. Then I’ll explain the nuances that make real estate both beneficial and challenging.
First Job: Money Model – “Like a kid in a toy store with 100 Euros and Daddy’s credit card”
(GCC: I recently asked Chief Mom Officer a very pointed question:
Winnie and I both grew up poor, and a big part of our money value system started from a place of deprivation. We ended up in the right place, but not in necessarily the healthiest way possible. Now we are raising our own family with an abundance of money and time… how to instill those same values about saving, delayed gratification, etc… in a positive and healthy way?
What recommendations would you make to families like ours? Today’s post is the answer.)
How do you teach kids the important lessons about money, especially if you didn’t grow up with a great parental example?
Teaching your children important money lessons can be tricky. I would know. As the mother of three boys, ranging in age from 14 down to 3, I’ve had a lot of experience with teaching kids of different ages the basics of smart money management.
(GCC: A few years ago at FinCon, I had a chat with a fiery young woman whose dream was to save just enough $ to leave the corporate world. “I’m going to front load 100% of my retirement savings and then just let it percolate while I pursue other interests.” I loved the idea and the gumption. Fast forward to today: mission accomplished!)
My name is Gwen. I’m 27 years old, and even if I never save another penny I will enjoy a comfortable standard retirement. How did I manage that? I’m glad you asked!
GCC: When we were planning our own early retirement we had the good fortune to meet with people who had already blazed that trail. It was insanely beneficial, and I told myself I would always pay it forward. So when this young Canadian couple emailed to ask if we could meet to share all of our best life secrets (not that we have any), of course we said yes. Fast forward a few years now, and they’ve gone from nascent early retirees with an abundance of vim and vigor into a full on Millennial Revolution.
“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover. –Mark Twain.”
This is the quote I copied into my final work e-mail. It was May 2015, I had given my notice, made up some bullshit excuse about taking a gap year to travel the world and “find myself”, and this was my sign-off to a company I’d given the last 9 years of my life to. But I wasn’t really quitting to travel the world for a year. I was walking out of the corporate world FOREVER.
At the age of 32, my husband and I were retiring with a Million dollar portfolio, enough by the 4% rule to sustain our $40K/year living expenses indefinitely.
But I didn’t tell my co-workers that. They’d find out about it more than a year later, on the front page of the country’s most read newspaper.
