From Zero to FI in Less Than 2 Years|James and Emily from Rethink the Rat Race - a podcast by Cody of Fly to FI and Justin aka Saving Sherpa
from 2019-06-18T07:00:08
In today's episode, Cody and Justin are joined by James and Emily from Rethink the Rat Race who have one of the quickest journeys to financial independence you'll ever find.
Living in Huntsville, Alabama they find themselves in one of the best real estate markets in the country for rental properties. They took that opportunity and ran with it.In 2017 they bought their first rental property and two years later they hit their 11th property and are now ready to retire this summer!
Cody and Justin are both great friends with this duo and this is definitely a can't-miss episode.
So go take a listen, leave that 5-star review and give us some feedback!Episode Summary
James and Emily both had frugal backgrounds with James especially being on the really low end of the income spectrumThey met at a local community college and James got his college mostly paid for through financial aid
James ended up changing his major 4 times before eventually acquiring an associates degreeEmily wasn’t eligible for financial aid due to her Dad’s income but her parents did pay for her first two years
She ended up being able to pay off the final two years herself so they both graduated debt freeEmily would take a job starting at $60k and James was at $35k per year in Huntsville, Alabama
Even though they were in an affordable area with $95k of incomes, they weren’t saving a dimeThey said they were happy with there life but weren’t spending money intentionally but looking back they can see that they’re so much happier with their life now
James was at work one day and someone said they came across a website that had changed their lives which turned out to be Mr. Money MustacheJames immediately went all in and came home adjusting water heaters and laying down all these things they were going to cut from their lives...probably too aggressively he’ll admit
This was 2016 when they discovered this idea of financial independenceThey estimate they cut their expenses down to $35k the next year after discovering the topic and have since cut it to closer to $12k
Emily discusses how changing lifestyles can affect friend groups and social connectionsAfter cutting their expenses down as low as they could they looked to accelerate their path even more through real estate investing
We go over their processes in finding properties and getting them ready to rentYou’ll get a taste of James fantastic knack for negotiating
They bought their first property in Summer of 2017 and have since hit 11 propertiesMost of these units were had for under $50k and all of them bring in over 1% of the cost back via rent
Example: $50k house that brings in $500 is bringing in 1% every monthAll of the homes were bought using traditional mortgages
Now they have enough money cash flowing every month to cover over 2x their expensesThis has accelerated their path so fast that they’re now looking to retire in September
That’s a 2-year path to financial independence!On top of real estate, they’re also maxing out one 401k and both IRAs
Emily’s family owns a home in Cyprus that they plan on moving into this summer and doing some remodeling.Emily already has her EU citizenship and James is applying
They’re not 100% sure what long term future looks like but they’ll probably pick up some side hustles in Cyprus to stay busy and travel all over Europe
Key TakeawaysEveryone has advantages: Some people might not realize living in Huntsville, Alabama is a huge advantage for financial independence but James and Emily realized this advantage and maximized it
Leverage is crazy powerful: James and Emily aren't these crazy high-income earners but they now own 11 rental units in 2 years. That's all possible thanks to the leverage you get through mortgages
Not Knowing is Ok: James and Emily don't have the rest of their lives mapped out. But what 28 year old does?
Further episodes of The Financial Independence Show
Further podcasts by Cody of Fly to FI and Justin aka Saving Sherpa