The Journey Back To Financial Independence
In the second half of 2023, a significant shift impacted our passive income, causing our household to lose its financial independence after holding it since 2012. The journey now is to regain financial independence by the end of 2027. This involves restoring the ~$150,000 in passive income lost due to selling stocks and bonds to purchase our new home. This move will bring our passive income back to ~$380,000, allowing us to avoid needing to work. Despite the challenges ahead, I am excited for this journey, akin to the anticipation before embarking on a great vacation.
The Journey Back To Financial Independence: Stage One
The initial step towards regaining financial independence is to feel financially secure again. Feeling rich goes beyond material wealth and is crucial to one’s financial well-being. A lapse in my 30/30/3 home-buying rule led to a period of financial insecurity, accompanied by heightened anxiety and stress. However, a surprise real estate capital distribution in early 2024 provided relief, enabling us to navigate unforeseen financial demands.
To further enhance liquidity, we trimmed our expenses, including reducing food, transportation, and entertainment costs. Investing wisely and maintaining liquidity with the remaining capital boosted our financial security.
The Journey Back To Financial Independence: Stage Two
The next step involved deciding whether to sell or rent out our old home. A bullish outlook on the San Francisco real estate market led to the decision to rent out the property, despite the added responsibility. Securing tenants brought financial relief, with the rental income easing the burden of mortgage payments and taxes.
Latest Estimated Passive Income: $275,000
Following the completion of stages one and two, our passive income rebounded to ~$275,000. Yet, to achieve financial independence, an additional $75,000 in gross passive income is required. This necessitates accumulating new capital by exploring various avenues.
The Final Stage Of Getting Back To Financial Independence
The final stage poses the greatest challenge, requiring substantial new capital accumulation. Potential strategies include pursuing high-paying jobs, writing bestselling books, engaging in business deals, or relying on market performance. Each approach presents unique opportunities and risks, illustrating the complexities of the journey towards financial independence.
Embracing the process of regaining financial independence with enthusiasm and determination, I aim to make the most of this new challenge. Balancing financial goals with personal fulfillment, while staying resilient in the face of uncertainties, is key to navigating this path.
Going To Have Fun With My New FI Challenge
Approaching this journey with a sense of excitement and opportunity, I look forward to the road ahead with optimism. Balancing financial ambitions with personal fulfillment, I aim to enjoy the process and appreciate the journey, much like embarking on a thrilling adventure. As uncertainties unfold and opportunities arise, I remain committed to pursuing financial independence with resilience and enthusiasm.
Reader Questions
Where are you in your financial independence journey? What strategies are you employing to achieve your FI goals? Share your thoughts and experiences as we navigate the path towards financial freedom together.
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