Author

A few things that will be big in the economy 10 years from now

Becoming a blogger allowed me to open my horizons at many levels. Last month I rebranded my blog, with a new logo and a theme. I also ordered a promo video for the blog on Fiverr. It got me thinking… My blog became a (very small) business and I find myself outsourcing a few things to cheap freelancers all over the world. I talked to many online entrepreneurs this month, and they all told me the same: online businesses can be great and their potential is definitely augmented by freelance online marketplace platforms, such as Fiverr and Upwork.

I feel that if we had to hire somebody full time (or a regular freelancer, for that matter), the vast majority of us would refrain from starting a (online) business. The setup costs would simply be too high. Online businesses enable us to get access to very cheap labor, without having to compromise quality. Do you want to hire an expert for a one-off job without having permanent costs? Fiverr-alike platforms enable you to do just that. On top of that, you can find pretty much every type of service offered on this kind of platforms.

More and more people value flexibility in their jobs. 20 years ago, no company would allow you to start “until 10am” and work from home “a few times a month”. Companies have learned that people want flexibility, and offer them just that. On top of that, it’s now known to increase productivity (and working time and productivity are two very different things…). At the same time, more and more people decided to start their own businesses. As for Fiverr-alike platforms, the majority of people work there to make some extra bucks at the end of the month, but you also find many people making a living off of it.

There are many advantages to this type of platforms. First, they enable you to get in touch with people from all over the world (meaning every kind of market). In some markets, $100 is enough money to live on the entire month. No wonder they only charge $5 for 3 hours of their skills. Second, they allow you to outsource without having to hire. Yes, regular freelancers did that before Fiverr came about, but they were certainly in your market and you didn’t have the full spectrum of skills that Fiverr offers.

Environment

I honestly think that we’ll quickly migrate to an environment where the main workforce of businesses is outsourced online. Both having a business and trading your time for dollars is becoming more and more deprecated. I think we’ll witness a stellar growth of these platforms (in terms of customers and providers) in the next years. Personally, I see myself as a big client of these platforms as I grow my online businesses.

I should also say that after blogging I realized that the only institutions I will ever work for are universities. I will not consider working for a company ever again because I now understand the game. The main point is that companies pay you a fraction of what you generate every month. You’re happy with your salary, the benefits and what not. They don’t want to lose you, so they will increase your salary every now and then just to keep you motivated – most increases are actually ridiculous, BTW.

At the same time, because of your pay, the bank will lend you money so you can buy a home and turn your dreams into reality. You’re officially in the rat race. You need that paycheck at the end of the month, you’ve got a mortgage to pay. And kids to feed. You’re stuck. They make more money with you, so they increase your salary once again, by a tiny amount. It motivates you for that year. And this goes on and on and on like a hamster on a wheel. If we stop to think about it, we’ll realize that this strategy will prevent most of us from setting ourselves free. People get themselves more and more into the rat race as their salary increases. Companies will adjust the salary with fine detail: they want people to think they are getting rich, but they can’t let that happen – otherwise they leave.

Machine learning

A final note on machine learning, because it will be very big, in my opinion. Some visionaries do now believe that art degrees will be more valuable in 10 years from now on. I think this says a lot about it. In particular, I believe that many algorithms will have a lot of machine learning and AI components. My particular opinion is that online algorithms are rapidly moving that way.

At the same time, I think that mass tech gadgets will continue to steadily evolve over the next years. In particular, I believe that there will be a huge progress on smartphones and drones.

Virtual – real world interaction

We can’t deny it. Social media has really become the thing of the past 10 years. It has been happening so fast that it is actually difficult to realize how big social media got. Pinterest has launched about 7 years ago. As of February 2017, it had 150 million active users. Not many companies get so big so fast, with… about 800 employees. Also launched about 7 years ago, Instagram has now 600 million monthly visitors. It is happening, whether we realize it or now. I happen to think that there will be a lot of room for growth in the interaction with social media – we have way too many people using it to not capitalize on that.

At the same time, I think that mass tech gadgets will continue to steadily evolve over the next years. In particular, I believe that there will be a huge progress on smartphones and drones and the economy will revolve around mass tech and its usage in the real world. It will also increase mobility. I am not only talking about Uber and Uber-alike companies that will come about but mobility from every angle. Apps will definitely be the body of mobility of many things we thought were only possible to do or experience in one particular location.

Again, virtually everyone uses smartphones now and everyone has experienced some of their potentials. The money is where people are at. I have no doubt that smartphones will become way more sophisticated and have way more impact in our lives.

Sustainable transportation

As a Tesla lover and believer, I can’t really avoid this one. I believe that electric cars will take over in the next years. Actually, they won’t take over because they are eco-friendly or anything of that sort, if you ask me. I think Tesla is a magical company which is going to make electric cars more beautiful (this is already done, really 🙂 ), faster, safer and cheaper (well, most of this is already true). The model 3 will probably be the game changer and I do believe that Tesla will achieve all this with the profit made on the model 3. OK, but ain’t most of this already happening?

Yes, but what if I told you that I believe that the car technology we have right now will soon migrate to airplanes? Have you thought about the actual reason why Elon Musk – the greatest – has invested in electric cars (Tesla), rockets (Space X) and Solar panels (Solar city) all at the same time? Synergies…

What do you think will become big in the next 10 years? Let me know!

Lifestyle, Planning,

Salary vs hourly: benefits, pros and cons, and taxes

Since I started working, I was always salaried (or had a grant). Now that I decided to completely change my life (and if you’re in that transition period, check out this awesome book), this old question popped up and I found myself thinking about it. As I said before, I was offered a part-time research position (in the form of a grant), which I took. This is the most unscientific graph of history, which shows that I will devote as much time to this blog as I do to my new job:

As I define the number of hours I work every week, it is somewhat comparable to being an hourly employee. I decided to address this “Salary vs hourly” question in a broader context, using my own situation as a reference. Let us first go through the pros and cons associated with this question.

Salary Pros

I have been a salaried employee my entire professional life, so I know this position very well.

There are usually way more benefits in salaried positions, such as unemployment benefits, sick leaves and what not. On top of that, as you develop a relationship with your employer, you are also allowed to take some time off, work from home and leave earlier. In Germany, it is common that most employees leave earlier on Fridays too. In Portugal, working from home is becoming more and more of a trend.
Vacation and bonuses. While in Europe it has been more and more common to structure each employee’s salary such that bonuses are included, in the US most employees who receive bonuses are those working in sales or are managers. In most cases, bonuses programs are based on the performance of each employee, which means that higher productivity may translate into a higher salary in this case.
Stability. I know that most salary positions among my friends tend to be way longer than hourly positions. This is one of the most important questions of the salary vs hourly debate, in my opinion.

Salary Cons

For most positions, the hourly rate you end up getting earning may not be that attractive. Especially if you end up working more than the default 160 monthly hours. In my own case, I ended up doing that and I actually figured that I worked upwards to 220 hours, which meant that my salary came out at $10 per hour.
The flexibility that you have sometimes is compensated by not really knowing when you are done for the day. Usually, your tasks are part of monthly or yearly goals, so if deadlines come about, you may end up leaving way later. I feel that this is way more common in Portugal and Canada than Germany, where people tend to follow more standard working schedules.

Hourly Pros

Some of my previous co-workers were hourly workers, and I’ve got to talk to them often about this topic, and so I think that I know what are the main pros and cons of this position. At the same time, I must say that this is way more common in the US and Canada than in Europe (both Portugal and Germany).

Set hours. Maybe you’re like me and like to define your entire schedule for the day. It helps greatly to have set hours.
Overtime paid really well. You may end up earning 2.5x your hourly rate. If you are requested a lot, and you are willing to work your but off, it may be a great way to save some big bucks.
Increased earnings potential. If you work by the hour, chances are that you can work more time and optimize your working schedule. I actually think of hourly as you being your own boss and renting your time out. You can choose the companies that pay you well.

Hourly Cons

Thorough, stressful documentation of your working time. If you spend 5 minutes more at lunch time or leaving a few minutes after 5pm, it won’t go unnoticed. If you are looking for a not-so-stressful position, this salary vs hourly debate should become much simpler because of this.
Lack of career progression. While this is not a universal true, it is usually the salaried employees that get the most important positions.
Lack of status and creditworthiness before a bank. At least in the environments I know, banks tend to lend you money more easily if you have a salary.

If you are given the option to decide between salary vs hourly, consider the pros and cons for both positions. You’re the best person to decide what fits you the better. Either way, chase your dreams.

Other sources on this subject:

Books, Real Estate,

The best free Real Estate Investing books (update)

As I promised before, this blog will talk more about Real Estate investing than any other type of investment. This post brings you free real estate books that you can download and read right away. These free real estate investing books are the best real estate books I personally know for free. If you have suggestions of more free real estate books or real estate investing books that one can download in PDF or to the Kindle app, please send me an e-mail with them. Note that the real estate books I report on this page may at some point become paid books, so always check if the final price is $0. Even if they are not, I will keep them here, because there is always the chance of them becoming free again. I will update this page as time often, with more books. Last update: April 14th, 2017

As a real estate investor, I understand that some basic questions for experienced landlords may be a true hustle for beginners in real estate investing. For example, when I bought my very first home, I didn’t know where I could dump a couch or where to get rid of an old mattress. Fortunately, I read a free book explaining where to haul stuff, from couches to mattresses. This may sound like real basic knowledge to you, but believe me, it can be a pain in the ass if it is the first time you do that.

The good news is that there is a ton of free information and real estate books online these days, so there is no need to be scammed anymore. Plus, most real estate books focus on the underlying principles of Real Estate Investing, so you can learn from them regardless where you invest. I have compiled great FREE real estate investing books. You may need a Kindle app to read them, which you can download from here. You can also download these books in PDF and read them on your reader. With the Kindle app, you can read books on your desktop or smartphone.

While my own book also revolves around Real Estate, it is not free. I decided to compile these real estate books and real estate investing books so you can start learning for free. Download the PDFs and start learning!

In the following, I compile a few FREE amazon real estate books and real estate investing books you should get your hands on…

How to be a Real Estate Investor , by Phil Pustejovsky (Affiliate link). Phil was really one of inspiration sources when I started to invest in Real Estate. I probably watched every single video on his Youtube channel. You can check him out here. In this book, Phil provides a general overview of real estate investing, and excellent guidelines to start investing in Real Estate. It also covers the pros and cons of real estate investing, according to Phil’s personal experience. This book costs $9.97 on Amazon (as of March 2017), but Phil is giving it away for free through a website of his, Freedom Mentor. Just request your copy on this web page.
Hip Hop 2 Homeowners, by Jay Morrison (Affiliate link). Jay is another of my references when it comes to Real Estate Investing. In this book, Jay reports a fantastic journey, from a criminal career to a Real Estate mogul. He also comments on fixing credit and legal ways to increase your credit score super fast. Throughout the book, Jay reports on his rise, fall and rebirth into the expert he became. His book sells for $12.95 on Amazon (as of March 2017) but Jay is or has offered his book for free from his website. Jay Morrison also has a (very inspiring) YouTube channel, which I also recommend for anyone interested in pursuing a career in real estate.
The Ultimate Beginner’s Guide to Real Estate Investing, by Joshua Dorkin and Brandon Turner from BiggerPockets (Affiliate link). This book provides a few rules of thumb to follow when investing in Real Estate. Although it is a pitch for you to get on the Bigger Pockets forum – in my opinion the best forum on REI out there – it does a great job of introducing you to REI. It touches on several different topics of REI, although it is based on high level (not in-depth) topics. There are a lot of references to BiggerPockets, the authors’ site, which complement the information provided by the book. For me, it was too focused on single family homes, as I like to invest in multi-units, which is the core of my real estate investment strategy.
Realty Riches for Cowardsby Ryan Scott (Affiliate link). I like this book because it offers a very concise way to start investing in real estate. Ryan Scott actually comes from a very poor upbringing and supported his college costs by investing and managing real estate. Ryan has over fifty years of experience in owning and managing real estate, so this book can be great for you if you follow this very same route. He walks you through the entire process, from selecting the area to invest in and manage the property. This is all presented under a philosophy of investing and making money with real estate.
Instant Experience For Real Estate Agentsby David Thyfault (Affiliate link). I chose this book because of two reasons. First, it is one of the longest books you can find for free (since it has over 70k words!). Secondly, it has more to do with Real Estate agents, which are, in my view, actually a crucial part of Real Estate investing; you gotta be good friends with agents to get good deals, that’s my experience. I learned a lot from the great lessons and the true stories of this book, which I immediately used to my favor to close deals.

How to Flip a House as a Real Estate Investor (Affiliate link). This is the only free book I know that is entirely dedicated to flipping homes and the problems around that. It also covers topics such as building your own team, finding wholesale buyers and motivated sellers (my favorite) and negotiation.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers (Affiliate link).
Speaking of how to find motivated sellers, there you go: a book on that. It also does a good job defining ideal cash buyers, which may be good if you’re looking to flip and sell. I also liked the fact that it goes over the section 8 landlord topic and goes heavy into marketing, which I liked a lot. It is not a book for experienced in investors, in my opinion, but I must say that I learned a lot of different buying and selling scenarios that I didn’t know prior to reading this book.
No BS Real Estate Investing, by Preston Ely (Affiliate link). This book revolves around how to wholesale, as the author explains the methods he uses himself to wholesale. I like books that go through strategies that the author uses himself, like this one. As these are a little but unconventional approaches, in my option, it is certainly read also because of that.
50 Simple Secrets To Be A Happy Real Estate Investor, by John Fedro (Affiliate
link). Very digestible book that is valuable for any person who wants to start investing in Real Estate. I would call this a mindset book, because it teaches more about how to fame your mind that actually the technical details of real estate investing. I think that Fedro has done a nice wrap up, in the sense that you can thumb through the book and still get the main points and ideas. Took me less than an hour to read this one.

The Ultimate Real Estate Investing Blueprint: How to Quit Your Job in 19 Weeks or Less, by eBookIt (Affiliate link). Short read on the “Blueprint” to REI, as defined by the author. While certainly enough for you to get started with REI, it is another book that you should read, given that it is free. There are a few terms that you should be used to, so I won’t recommend this to be your first REI book, but rather one of the latest free books you read. It does a great job explaining how one can connect and profit from connecting buyers and sellers together. You should expect to learn a few methods including investing in real estate with no money down. I won’t say it is a great book, but if you’re looking for free options you may indeed learn something from it, and therefore it is worth a try.

Real Estate Investing Made Easy by Brian Haskins (Affiliate link). This book is a great read for people looking to start wholesaling on the side. It does a good job providing info on wholesaling as general tips to become a better investor. I have followed Brian’s podcasts and I’ve learned a great deal from them, so I decided to read the book. I think that there are many interesting actionable tips for everyone trying to start in REI.

I am a classic, aggressive buy and hold real estate investor. To this day, I have read about a myriad of strategies of and information about real estate investing. I understand that, for the majority of people out there, it is very difficult to get started. In my opinion, if you are serious about investing in Real Estate, your best option is to read a lot. Just read as much as you can about investing in real estate. My absolute first recommendation is free real estate books and real estate investing books.

When I started with real estate investing (REI), I felt for some “guru courses” which cost me a lot of money and didn’t really helped me much. What I think its important is to understand the principles behind real estate and real estate investing, other than the specifics of a given market. I invest in Portugal, and having learned the specifics of mortgages and taxes didn’t really help me much when investing in Portugal. Real estate investing books can be great for you to read regardless where you invest, but be cautious to filter out the information depending where and how you invest.

Let me know what you think of these real estate books if you ever read them. I am also eager to know more free real estate books and real estate investing books, to add to this list (other than these, which I already know), or other types of investing. If you shoot me a message with such books (please let me know, for any books you send, whether they are available for free in PDF), I can publish new lists just like this one. In fact, I am looking for free books on stock investing right now. You may also want to check out the section of paid books, which I remodeled this month, and my own book, which I published this month.

Real Estate,

How to evaluate an investment rental property with the (simple) 7 year rule

Looking for rental properties can be a very stressful and frustrating thing, especially when investors try to evaluate a rental property. Most investors I know, tend to over-complicate or look for the unicorn that never happens. Most successful RE investors look at rental properties in a very simple way and look for very simple attributes. I have also learned to do that, and I consider that it was the key to finding great deals.

Before you proceed, let me tell you that you can have very different strategies in real estate investing. In my opinion, the most determining factors for choosing the most appropriate methods for evaluating a rental property include:

The bank lending you money to buy vs buying and renovating a property;
Aiming at a cash flow vs an appreciation portfolio;

In the following, I will tell you how I evaluate a rental property. I assume I can only borrow money to buy a property (and not renovate). In addition, I assume I am looking for high cash flow deals (and discard appreciation all along).

The main numbers to evaluate a rental property – it’s actually simple math!

I’ve seen lots of investors doing crazy when it came to evaluating a rental property. I actually read someone’s comment on MMM forum which referred to a book called “how to evaluate real estate investments”. This guy spent hours and hours reading a book that supposedly helps to evaluate a rental property. I was shocked… I’ve got 10 units with awesome ROIs and I’ve never spent any money reading books on evaluating real properties…

My general thumb rule is: if you’re spending more than 5 minutes determining whether a rental property is a good deal, you’re doing it wrong. I personally look at two or three numbers and that is it. Below you will find my entire rationale when assessing a deal.

Really important stuff you can’t drop the ball on

In my opinion, the most important things when evaluating a rental property include: 1) knowing exactly all the expenses that the previous owner had with the property, 2) knowing exactly how much money you’ll spend, should you need to renovate it, and add 15% to that just in case and 3) knowing that the current rents are not overvalued.

Where I spent my time when I want to evaluate a rental property

First things first. If I am to buy a property, I first try to find a few properties (say 3-5) that look interesting before going further.

Assuming I already found 5 properties that look like good deals, I move on to the next phase and ask a few questions:

Is the current owner a motivated seller? (I need to be truthful with you – you won’t know this every time)
How much money would I have to spend to build this property, and how does it compare to the listing price?
Assuming there are already some tenants, would they stay if raised the rent by 10%? Do they have any personal relationship with the current owner?
Assuming there are no tenants, at what price point (in terms of rent) would I need to go to rent the unit in 1 day?
Because of hidden costs, the renovation of the property will be 50% higher than the quote I’ve got. Is it still a good deal?

OK, now, let us start filtering the properties…

I only work with very motivated sellers. If the properties are on the market for less than 6 months, I won’t even inquire the real estate agent.
I only look at properties that would cost me about 5-10 times more to build than the listing price. This is why I look at multi-unit properties. Single unit properties almost never follow this.
I would try everything to get to talk to the current tenants – you need to check whether this is legal in your country and you definitely need the approval of the current owner and the real estate agent. Do not do try to talk to the tenants without letting them know!
I would go to a different real estate company, say that I may have that property in the next months and ask for an honest opinion regarding how much the property could rent for!
I always get two to three quotes on the renovation of the property.

OK, now I am down to 1 or 2 properties. It’s negotiation time…

But wait… what defines a good deal?

This makes me get back to the original question of whether you are aiming at finding a cash flow or an appreciation property. I follow a free cash flow investment model, so I always look at cash flow deals. That is what the following rules pertain to.

It must be paid in up to 7 years

As a cash flow guy, I look forward to getting my capital back as soon as possible, and that is what I think of when investing. How much time will it take for me to get my capital back?

The math is actually quite simple. I (under) estimate the gross monthly income of the property. If 4 or fewer years of similar income pay off the property, I assume it is a good deal. The rest of the time (until 7 years) would pay for property expenses and taxes.

The beauty of this rule is that I use it regardless I borrow money from the bank (in which case I ignore the interest and assume the initial cost and the full price) or not. Of course that, in the case you borrow money, if you buy a property for 100k and 7 * 12 * rental income = 100k, you won’t have it paid in 7 years because you gotta pay interest. However, the rule will still indicate you whether the deal is a good one!

Let us look at my real estate properties and apply the same rationale:

RP#1: Bought all cash, from a very motivated seller. I knew I would never be able to get my investment back in 7 years with this property, but this investment was a slightly different one. Being a 1-unit property, I knew it was very liquid. I bought it so much underprice that my initial idea was to flip it, sell it off and move onto the next property. I ended up renting it out. As tenants are leaving this property next month, I may sell it for a nice profit and acquire another multi-unit.

RP#2: Borrowed money. Paid €41000 (closing costs included) to buy it. Currently, the gross yearly rent income is €6060. It passes the 7-year rule.

RP#3: Borrowed money. Paid €36500 (closing costs included) and spent about €30000 renovating it. Currently, the gross yearly rent income is €5700 but I project it to be €11200 without renovating it further (as I have free units which I will rent out in the next months). It passes well the 7-year rule and in fact is better than 6 years.

Summary

I keep things when evaluating rental properties and real estate investments. Of course that you can even take expensive courses that explain how to evaluate a rental property, but in my opinion, the math should stay simple.

I use the 7-year rule, regardless I borrow money to buy the property or not. This rule basically means that a good deal generates the full paid price in 7 years or less. It has worked very well for me since I started to using it and it definitely keeps things simple and efficient. Focus your time on other things that matter, such as finding motivated sellers (who will sell off their properties at huge discounts) and determining whether the current rents are sustainable. Have a few contractors look at the property and tell you whether there is something you missed. Keep the math simple.

Happy hunting!

Daily life, Planning,

Financial freedom – what is it, what is necessary to get it and why I want it

I have covered the topic “financial freedom” in detail in my book “My strategy to retire early” but today I want to go over on a few angles of this topic.

What is financial freedom?

For me, financial freedom means that you attain a certain level of wealth that you don’t need to work for money anymore. This can be achieved in various ways. You can win the lottery. You can inherit more money you’ll ever spend. Maybe even sell the company you’ve built from the ground up and get a nice exit. Or you can do what I am doing: save aggressively, invest wisely, and ultimately build a nest egg that pays you enough money to live off.

If you ask people whether they want to be financially free, most will say yes. However, they lose site of this by putting other things first. Most people get themselves into huge debt for a home and a car (not to mention college debt). Others keep using their credit cards to buy stuff they really don’t need, just to have a spike of excitement (I will not even call it happiness) when they buy it.

If you want to achieve financial freedom, you will have to adopt a whole new set of rules for your life and eventually become a different person. And to truly do and embrace that, you’ll have to assess whether this is a true priority in your life. Otherwise, my experience is that it won’t work. Ask yourself questions like “am I OK with living off of 30% of my salary for 10 years?”. Or “am I strong enough to make my own meals and coffee (instead of going out) every day?”. I can’t tell you exactly what it will take for you to become financially free. However, questions like these will give you a good idea of what it really takes.

What is necessary in order to achieve financial freedom?

Piling up money is probably not the best strategy to attain financial freedom. Technically, you can achieve financial freedom if you pile up enough money to live off of, but this is a very hard way to do it. It is simply extremely difficult to pile enough money to live off of, for the rest of your life. To start off, inflation will remove transactional value of your money every single year. The idea is to save and invest, and make more money on your saved and invested money. Think of it as buying your own salary by pieces, if that makes sense. There is one especially popular chart in the ER community that works magically well:

(taken from familymoneyplan.com)

The chart basically represents a trade-off of how much you save and how many years it will take you to retire. For example, if you save 70% of your salary, it will take you about 10 years to retire. Interestingly enough, this works regardless you make 300k or 30k! The key idea is that you can live off a certain amount and you have to build a nest egg that will pay you that amount every year (ideally you want to grow it a little just to be on the safe side). Of course that this means that two people living off of 300k and 30k will have very different annual spending figures.

I like to think about in a slightly different way. To live comfortably well in Portugal, I will need a net “salary” of about €20k/year (as of April 2017). In order to net 20k from my investments, assuming a 8% return rate and 2% inflation, I would need a portfolio of about €333k. Now, let us consider a more conservative return rate, of 6,5%, and 3,5% average inflation. This means that I will net 3% of my portfolio, every year. To get €20k net per year in these conditions, my portfolio would have to be at €670k. This is, in fact, my first goal.

Having children changes things a little bit. If I were to have one child, I would have to increase my living costs by $1000/mo. With a return rate of 6,5%, and a 3,5% inflation rate, I would need a little bit more than one million bucks to net 32k/year.

Why do I want to achieve financial freedom?

If you follow my blog of you have read my book, you know that I want to retire because I have the Chronic fatigue syndrome and sometimes I just drag myself to the office. But even if I were absolutely healthy, I think I would trying to retire as well.

Whether you want to achieve financial freedom is up to you. Look deep inside and find out if you really wanna do that. Even if you already know you want to achieve financial freedom, looking deep down for the actual reasons will give you strength to fight. And boy, this is one heck of a hard road!

How do I imagine my financial freedom?

Just because I plan to retire early it doesn’t mean I will stop working. As I said, what I really want is to be able to do whatever I want, whenever I want. Maybe surprisingly for some, I love to work. In fact, most of my time is spent working on stuff I love. If you didn’t achieve financial freedom yet, you won’t be able to work on what you want. You will have to work for money. This may come in the form of a boss or your own business, but there are many things you must do even when you don’t feel like it. And that is the whole point of financial freedom. Here are some examples of stuff I will do after I achieve financial freedom:

Blogging. I’ve always loved to write, but blogging is a lot more than writing. If we consider the tasks underlying a blog, writing is one of the smallest tasks of a blogger. Content creation involves much more than simply writing. But content creation is not even the bulk of one blogger’s tasks. I want From cents to retirement to become a reference for personal finances and early retirement. In order to turn a blog into a reference, you need to work very hard.
Going into nature way more often. I love to hike (especially in not so popular wood trails), find hidden lakes and waterfalls and what not.
Working out more often. Between 2010 and 2012, I used to workout 3 times a week every week. My shape was amazing. I ended up giving up of that due to lack of time.
Write more books. I wish I had the time to write two books every year.
Give back to the community. I plan to help those in need, especially those with CFS.
Coaching other people. I have a few clients right now (I have a partner who is generous enough to send some clients over), and I coach a few friends. However, I would like to coach and help people on a much more broader scale.

If you liked this post, then I recommend you to check out the resources down below.

Ben Davis

More resources on financial freedom:

Blog, Planning, SEO,

Another quarter, new hard goals for the blog!

You know what I like the most? A hard challenge. I’ve bought myself one with this SEO story, really.

So the story goes that I didn’t rank for anything on Google, even if I had the best keywords. I’d work very hard to find the best keywords and be left on the 4th page of Google. Can you relate? Yes, I know, it sucks! As a result, I told myself I would not let this happen much longer, and I started a crazy SEO experiment (check out the first part here). The SEO experiment will include several parts, and cover various angles of SEO, from backlink building to social media. Of course, I had to start off with backlink building because despite what all other metrics may impact your rankings, backlinks are still the most important one.

Although I’ve been successfully executing most tasks, I failed most deadlines of the end goals I had defined. I said that I expected 10%-15% of traffic from organic search, but I am still at 7%… so something was wrong.

Looking at the backlink profile that I have built, you’ll see it is not the best one. I clearly made a mistake building so many nofollow links, as this generated a bad link profile. I committed myself to fix this ASAP and I am ready to make it right.

I’ve got a new challenge now, and I am publically assuming that I am in the SEO business now!

For now, let’s have a look at my ugly stats. I am still comparing myself to the competitor I used in the first part of the SEO experiment – once I beat him, I will progressively compare myself to stronger competitors:

vs my competitor:

Yes, he got me. However, according to my estimates, I think that I can beat him by the end of this quarter, assuming he continues to grow at the same pace! Keep in mind that this guy is blogging for over two years whereas I just crossed the 1-year mark.

I can’t ensure dates on when to show my PA and my DA because Moz is not keeping the updates on the announced dates. I am not sure when they will be released. Let us now look at the rest of the stats.

As of March 24th, I had 5.420 backlinks:

Not only I don’t have many backlinks, as my ratio of follow/nofollow backlinks absolutely sucks:

My trust flow is 7, my citation flow is 17, making both of them well below average. This low number of backlinks (especially follow backlinks) translates in very little organic traffic from search engines:

The reason why I have been increasing my traffic from search engines isn’t that much connected to the number of backlinks I built so far. It has primarily to do with the fact that I managed to rank for many keywords with low competition. Keep in mind that most SEO tools estimate your traffic based on the volumes of the keywords you rank for. So very high-volume keywords may actually lead the tool to think that you’re getting a lot of traffic, even if you rank 20th!

BTW – this is really me – I am never truly happy with the results I achieve as I always want more and more. I expect to hit the points above to reach 2000 by the end of this quarter as I expect to increase by at least 100% every month (meaning, for the worst case scenario, 400 by April, 800 by May and 1600 by June).

Clearly, my long-term efforts didn’t pay off so far. However, I am aware that I have chosen the hardest approach there is. Great keyword research won’t do the trick unless I increment my number of follow links substantially. I need to change this.

So, I am calling myself out and as always I am going big… I am setting the bar high for this quarter, and boy, I will do everything in my power to crush it!

The Goals

Goal 0: Fix my link profile

Drastically sanitize my link profile and have more follow links than nofollow links in the long term.

Goal 1: Increase my traffic from organic search to 20%

As I said, I failed my goals until now, in terms of traffic from search engines. I thought I would be at 15% and I am still at 7%. This time, I will play a little bit more conservative and aim at achieving 20% (instead of 50%, which is what I had planned to be in the beginning of the year). I am confident I will reach and cross this mark, but I’ll play conservative, as I said. Either way, this is enough time for SEO to take on, so I won’t have any excuses.

Goal 2: Reach 3000 subscribers and 6.000 likes on Facebook

Another bar I set very high – 6.000 subscribers until the end of the year. I think that it will be easier than Facebook’s goal of 25.000 likes, but a hard nut to crack, still.

There is not much secrecy on what it takes to increase the number of subscribers, as far as I know. Have awesome content and get your blog out there for people to visit it. Those who really like your content will subscribe. I will consider using more techniques – such as giving away small (yet valuable) e-books, but not in this quarter. What I will do is to guest post a lot, as I said, and hope that I bring a lot of targetted viewers who like my site and subscribe.

I am now on Facebook, Twitter, and Pinterest (if you haven’t followed yet, please do). In this quarter, I need to ridiculously increase the number of likes/followers to meet my goals for the year (which I only set for Facebook – 25.000 likes). Maybe I set the bar ridiculously high for Facebook but I prefer to go big and fail then go small and win. This quarter, I will use a few tricks I have been learning!

Most people say that social media platforms are not that relevant for SEO. I agree that they are not that tightly connected (even though social signals are part of Google’s ranking metrics for sure!). However, I feel it is a great way to disseminate my material and get the word out – which may get me some organic backlinks (and views, obviously). I do have a solid strategy to increase my facebook likes substantially, but I won’t reveal it before testing it. I will detail everything on my next SEO experiment update.

Goal 3: Publish every Monday, Wednesday, and Friday

I have been accomplishing this week after week and I am confident I will not fail in the entire quarter. I try to schedule myself out for 2-4 weeks and that is the trick, really.

The strategy

So, in order to accomplish these goals, here’s what my strategy will revolve around…

Build more high-quality dofollow backlinks

Right now, most of my backlinks are nofollow. Although I’ve nailed it at keyword research, I need to dramatically increase my PA and DA for the keywords to work.

As I said before, nofollow backlinks are great for various reasons, but they won’t help with SEO. Plus, I believe that Google assesses the dofollow:nofollow ratio and penalizes sites with a bad ratio. That is my case (at least the bad ratio part – not sure I am being penalized), as I showed you above. So, the first thing is to build lots of dofollow links, and revert the situation. But there is more… my trust ratio and my DA are so bad I shouldn’t even be showing them. This means that I need links from highly trusted / high DA sources. In essence, I need lots of guest posts on great blogs. Guest posts are not the only way to increase backlinks from high DA sources, but as I don’t have my name out there yet (because I haven’t been guest posting enough, which means low DA, which means that very few new readers come to my blog) I don’t have many organic backlinks yet. See the catch 22? Me to! So…

Task no. 1: Write at least 40 guest posts and generate at least 80 backlinks

The key is to seek and find high DA sites that will accept a guest post from me. Sites with lower DA won’t help in the rankings, and guest posts do take a lot of time (at least for me – I like awesomeness), so I need to have a time-efficient MO. At this point, I feel confident that From Cents To Retirement has a lot of great content and I won’t have problems in getting the guest posts I am looking for. I will write 40 guest posts this quarter, which will generate 80 backlinks (at 2 links a pop, on average). 40 guest posts in the quarter mean one guest post at ever 2.25 days. Feasible? I am not sure yet but I will try my very best to do this. I am not starting from scratch, though, as I arranged some guest posts in March. I will aim at publishing 14 guest posts per month, in the next 3 months.

Interviews are a quicker way to get backlinks and exposure. I prefer to guest post than to give interviews, although I love to host interviews with other bloggers on From Cents To Retirement. I will give some interviews (instead of writing guest posts) depending on my schedule and preferences of the hosts.

As I said, I expect 80 backlinks from this experiment (an average of 2 links per posts). This will definitely be the hardest (and most time-consuming) task in the entire experiment. Although, I believe it will be the most profitable one – or at least the one with most impact.

Task no. 2: Legally “steal” competitor backlinks

On top of that, and just to make sure I attain my goal, I will also use other strategies to get bloggers linking to my site. In particular, I will test one strategy (of 3) per month. I am sticking to whatever generates 10 links a month! From this, I expect 20 backlinks for the quarter, thus reaching 100 dofollow backlinks in 3 months.

The idea is quite simple: spy on my competitors and go after the same links. I have done this in the past, successfully, for nofollow links! Now I will go after dofollow links (a much harder task, obviously), but I also have better tools and more experience now. Dofollows are much more complicated because they depend on the will of the admins of the sites where you’re looking to get a link from.

Of course that with so many guest posts, I will start to put my name out there and that will generate views and (hopefully) some organic backlinks, as people find my content. However, I won’t rely on that as a means to generate backlinks. On top of that, I can ensure you that I will publish 3 posts per week despite I have to allocate most of my time to write guest posts.

This is it, let us see how I do in the next quarter. As you can see, I could not be more transparent about this. I am working hard and I will work harder and above all more efficiently in the next quarter. Wish me luck!

Ben

online income report income diary report how to make money online

Reports,

March 2017 (Online Income: $208.58)

Welcome to my income diary. If you wonder how do websites make money and how to make money with a website, you may find my reports useful.

I release reports on my online income every month. In 2017, I am projected to make $15k on online income.

I’ve received many e-mails concerning this matter. Most people ask me “What can I do to start a side online business?” or “What can I do to make a few hundred bucks at the end of the month”? First, know that I offer consulting services for this, on 1:1 consultations. Either way, let me hash out a general recipe here:

0) Choose a niche. Many people choose niches based on keyword search. I highly recommend people to blog about what they are passionate about instead. If you add value, any niche will work out for you.

1) Set up a website. I host my website on Bluehost, which I highly recommend. For one, its cheap, two is highly reliable. If you are interested in starting a blog of your own, I created a tutorial here, to help you start off.

2) Blog. A lot. You may have noticed that I’ve posted twice in the month, on specific months when I started From cents to Retirement. Doesn’t work. It won’t tie people in, it won’t please search engines and your blog will rapidly be forgotten. Note that I am not saying “publish crap”. Do not, if you expect to have loyal fans and grow. But do not forget to publish.

3) Promote your blog. A big part of having your blog out there for people to see is through high-quality posts – eventually, people will share. Promoting your blog will not only get it out there faster but deeper. Promoting your blog can be very hard, but its necessary.

4) Monetize. Adsense is an option. I like Amazon a lot. If you offer consultancy services, as I do, you need to show you can do it yourself first, but clients will pop up eventually.

So, how did I make $208.58 this month? First, the breakdown:

Bluehost : $100
Affiliate marketing : $35.88
My book : $45.36 (I set the price of the book to $1 as a special offer to my subscribers)
Consultancy fees : $0 (turned down some work, because I was really busy with other projects)
Google adsense : $2.34
Paid surveys : $25

Total : $208.58

Disclaimer: the BlueHost and the Amazon links are affiliate links, which means that I get commissions if you buy products or services through them. The amounts reported above are before any fees, taxes or expenses. I can’t say exactly how much I will net from this.

Note that although I am commited to release my income diary and help those who want to know how to make money with a blog, if they and blogging for money, my primarily focus is not to make money.

Expenses

This month, I had considerable expenses with the re-branding of the blog:

New template for site : $49
Programmer : $50 (eventually I had another programmer helping me out, but as he is my personal friend, I am not sure how I will pay him)
Promo video : $20

Total : $119

These expenses are pretty much 1-time expenses and now I don’t expect to spend money on the blog until the end of the year.

Views

I changed my strategy pertaining to traffic. Although I’ve proven in the past that I can send a lot of traffic to the blog (see the traffic in Sep-Dec in the picture below), in I am not interested in doing that anymore. Yes, that does convert some people into loyal readers, it does increase the number of subscribers and followers (not to mention that I make way more money that way). However, not only that takes most of my time (which I could invest in producing awesome content for my blog) as the traffic falls immediately if I stop using those channels.

I am now interested in building a sustainable platform that grows steadily and organically, as I am confident that I have now enough valuable content for that. To do that, there are a few things I am focusing on: the site authority (PA and DA), high-quality referrals and growing my social media accounts.

This month, my traffic was pretty similar to that of February, totaling about 21k views. SEO is yet to take off (which now makes sense to me – I need 3 months of hard work to start seeing good results from that – I will talk a lot about this on Friday) and I’ve had increased traffic from referrals even though I haven’t been featured on any major site yet. Now, I did expect to drive a lot of traffic in a “sustainable way” but it didn’t happen. I know what went wrong and I will correct that in the future, when I use the same strategy.

and the number of sessions:

Once again, I have 50% new and 50% returning visitors and the bouncing has decreased to 71.46% (I am killing it on organic searches, as I have bounding rates of up to 43%!). The blog theme is now much more user-friendly and I do expect to decrease my bouncing rate even more.

My Alexa rank is still good, and I haven’t had a big penalty for “losing” the December stats (although you can clearly see the drop at the end of the month) – Alexa is based on the 3 previous months. Let us see how it will come out next month.

Social Media

Last month, my Facebook page grew by 31 likes (an increase of about 8%). This month, I used many other techniques and I was able to grow it by 99 likes – to 530 likes – an increase of about 23%. This is more exciting because if I continued to grow my facebook page at 23% compound, I’d have 3415 likes by the end of the year. Yes, this is still nothing compared to my goal of 25.000 likes, but I will use some tricks to increase it and I am finally considering using some Facebook ads to put some gasoline in the process. Social media will be the cornerstone of part II of my crazy SEO experiment (check out part I here), and I expect a massive increase of likes.

As I said before, I am not keeping track of Pinterest, and I will hire a VA to take care of it for me.

The subscriber count grew from 900 to 938, wich means an increase of about 4%. I know exactly why I had a smaller increase than last month – I sent two many newsletters and I had a lot of unsubscriptions. I am still convinced that the goal of reaching 6000 subscribers until the end of the year is achievable because I have a few tricks that I will use.

Goals for March 2017:

Release my book. DONE!
Increase the number of likes on my Facebook page to 750. FAIL. (I was to partner with a SM company, which didn’t happen yet)
Increase the number of blog subscribers to 1100. FAIL. (I expected to drive a lot of traffic to the blog, which didn’t happen)
Reach at least 50k views on my blog. FAIL. (same as above)
Make about $500 online. FAIL. (a direct consequence of not driving enough traffic)

Goals till April 30th:

Increase the number of likes on my Facebook page to 700.
Increase the number of blog subscribers to 1100.
Increase the number of followers on Twitter to 200.
Write at least 14 guest posts (check out the post on Friday to know why…)
Reach at least 40k views on my blog.
Make about $400 online.

In the meantime, let me know if this information is useful to you in the comment section down below.

Your biggest fan,
Ben Davis

Reports,

March 2017 (247344.39€)

My current worth is €247344.39 (36.92% of my first goal – €670K).

And after 12 months of steady increases in my net worth, another (minor) decrease this month. And guess what, April will probably suffer even more.

Why another net worth decrease?

Same reason as last month… RP#3 continues to demand cash cash cash!!!! As I’ve been saying, I estimate the bleeding will only stop in May, when the renovation is over. I am confident that this property will yield nice money in the next 10 years, without me to worry much about it.

I still have 2 free units but I am not worried that they will stay vacant for another month or 2. I realized that I’ve been micromanaging this property. When you acquire more wealth, you tend to manage things in a more macro perspective, and that is what I am doing right now.

Rental income

The rental income for April will be €1225, which is the highest I’ve achieved in my lifetime (in May I will move to RP#1, and so the rental income will decrease to €950/mo, unless I rent another unit of RP#3 in the meantime). In September, one of my leasing contracts increases automatically by €50/mo, and so, if nothing changes, the overall rental income would be €1000/mo at that point + whatever I can get from the units that are not rented out yet. If I rent them, I may well hit €1500/mo of rental income. This money will entirely be used to grow the real estate business (in particular, renovate the other units in RP#3) to keep increasing it.

Online income

My online income isn’t yet anywhere I estimated it would be at this point, but I will comment on this in the online income report/income diary.

My Real estate business

My Real Estate business had to be suspended for 2 weeks, as the Real Estate license we were given had some kind of problem. It will be re-issued. Not sure how much money I will make in 2017.

Goals for March

The goals I had for March were clearly missed, not only because I have been sick for two weeks, as I also decided to change my strategy at the beginning of the month. However, I am comfortable with the results I had.

Make at least $300 online and promote the blog. (this will be explained in the online income report)
Read two books. FAIL (as I invested a lot of time re-branding the blog, creating content and working on the SEO)
Complete the renovation of the first part of RP#3. DONE! The bleeding will now stop. This is finally over (it took well over 4 months). I will publish a post on this, eventually.

My goals for April (does not include the goals for the blog – those follow in the income diary):

Make at least $500 online and continue to promote the blog aggressively (details in the income diary).
Read two books.
Rent out another unit.

As you know, I was also offered a part-time research position, which fits my current situation very well. I signed the contract last week and I am excited to do this – it will give me the time I need to work on my projects while making some monies and continue to do some research. The contract will last for 12 months.

Ben

Planning,

The role of geographic arbitrage in early retirement

Roundups,

Roundup #1 – A brainstorm with Early Retirement and Money experts

My blog turned one year old this month. I would like to thank you for being part of this project. It has been truly amazing to create and keep this blog. To mark this beautiful date, I promised 3 surprises. The first surprise was the publication of my book: “My strategy to retire early“. The second surprise was the re-brand of the blog, which included a brand new template, which I have been promising for a while. The third surprise was up in the air… until today! So, without further due, here it is…

It is my pleasure to bring you a roundup with top bloggers on Early Retirement, Real Estate, Stocks, Investing in general and Making Money online. This would not have been possible without my guests, who I profusely thank. I was lucky that I was able to gather amazing people, who actually inspired me to start From Cents to Retirement, one year ago. They are:

Cody Shirk @ www.codyshirk.com – Cody Shirk is an international investor who focuses on a variety of different areas including stocks, private equity, and real estate. He believes that the best opportunities are found where few are willing to look. Through travel, exploring, and extensive research he sources his deals and then writes about them – all for free – at www.codyshirk.com.

Ben Reynolds @ www.suredividend.com – Ben Reynolds runs Sure Dividend. Sure Dividend is a newsletter and site that has everything you need to build your high-quality dividend growth portfolio. Ben is an advocate of long-term, low-cost investing into great businesses with shareholder friendly managements trading at fair or better prices. You can access hundreds of free articles on Sure Dividend’s archives page.

Juan Pablo @ www.100percentfinanced.com – Juan Pablo graduated college with no job, no money, and bad credit. However, he had a burning desire to become an investor. Later as a 9-to-5’er, he maximized his spare time to make himself wealthy. He not only improved his finances; but learned and practiced real estate. Today, he is a successful real estate investor & online entrepreneur. He now teaches others how to duplicate his efforts, and too, reach Financial Freedom.

FireCracker Revolution @ – www.millennial-revolution.com is Canada’s youngest retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC’s On the Money has garnered 4.5 Million views.

Mindy Jensen @ BiggerPockets.com. Mindy Jensen is the Community Manager for BiggerPockets.com, the Real Estate Social Network. She’s flipped more homes than she cares to remember, but is always looking for the next ugly duckling to turn into a swan.

PoF @ PhysicianOnFIRE.com -The Physician on FIRE is an American anesthesiologist, family man, and supposed outdoors enthusiast who spends way too much time indoors. He reached financial independence at age 39, and is planning to retire early within the next couple years in his early-to-mid forties.

J Money @ BudgetsAreSexy.com and Rockstarfinance.com – J. Money is an award winning blogger, consultant, experimenter, and daddy. With over nine years building communities online, Jay’s projects have reached 20+ million views and are routinely featured in the media. He’s best known for the personal finance blog, BudgetsAreSexy.com, as well as his curation site – RockstarFinance.com. He loves coffee, hip-hop, and collecting coins, and is on a mission to make personal finance UNboring.

Michelle Schroeder-Gardner @ Making Sense of Cents – On her blog, Michelle teaches readers how to save money, how to make extra money, and more. She currently earns over $100,000 a month through her business while traveling full-time in an RV with her husband and two dogs.

Mr. 1500 @ 1500days.com – Mr. 1500 writes about frugal living, investing, early retirement and dinosaurs on his blog, 1500 Days. When not wedged behind the screen of his MacBook, he can be found enjoying the mountains of Colorado with his family and friends.

and myself, Benjamin Davis @ From cents to retirement – Ben Davis started to work towards his early retirement in 2013, when he was diagnosed with the Chronic Fatigue Syndrome (CFS/ME). He didn’t let the disease beat him, and he started to work on his financial IQ, reading over 100 books on investment and personal finance. He later developed a particular interest in Real Estate. In 4 years, he grew his portfolio to a quarter of a million dollars, composed of 10 rental units, stocks, and a few other investments. Recently, he published his book “My strategy to retire early”, which details his strategy to retire by the time he turns 33.

This roundup is mainly about Early Retirement, and the fundamental questions underpinning it. I wanted to identify the main challenges and difficulties some early retirees have faced throughout their journey. At the same time, I wanted this roundup to be a starting reference for those who are just about to start their journey and are looking for answers to fundamental questions about retiring early. The answers ended up covering many aspects of investing and making money, which I find extremely valuable.

I started the roundup by asking Cody from Cody Shirk.com three fundamental questions pertaining to retiring early:

1 – What do you think is the most common reason for people to want to retire early?

“Freedom. That’s why people want to retire early.

Think about it… why do people want to retire early? Is it because they want to sit on the couch all day long and watch TV?

No.

People want to retire so they can achieve freedom from whatever job is shackling their life.

We’ve all been in that situation where we have this obligation to just go through the motions. Whether it’s school or a job, we have to show up and do things we don’t want to do. We do this because we know we are working toward a goal – retirement.

But, that’s just the story we’ve been given: Go to school, work hard, and then someday you might get released to pursue what you actually want to do. Some day you’ll get freedom.

So, we equate the word “retire” as freedom. That’s why so many people want early retirement.

Think about that. Seems crazy.

On one hand, it’s amazing that we are living in a world where freedom is obtainable. It’s like no other time in history. We are very lucky.

But, on the other hand, we’ve made this story up of how we actually achieve freedom. Do a bunch of stuff (school and/or work) that we don’t like, then we’ll eventually be rewarded with retirement – also known as freedom.

What if we could do things that we actually like AND have freedom? That’s what early retirement is.”

2 – Why do you think that only a small fraction of people end up trying to retire early… or even accomplishing it?

“Fear. That’s why only a small fraction of people actually end up achieving early retirement (freedom).

You see, the whole retirement game plan is pretty straight forward. Get a job, stash money away every month like a squirrel preparing for winter… then after thirty or forty years, you can break into your stash and live the life you’ve always wanted.

That process seems safe and comfortable. That’s what most people do, and there’s comfort in the crowd.

Heck, that’s what we’re taught in school. Our governments even set up specific tax incentive programs to support this process. There are all kinds of savings plans (401k, IRA, deferred compensation, etc.) that encourage this retirement strategy.

In fact, there is an implied penalty if you do not play along with this game. (The penalty being that your money is not treated favorably in regards to taxes if you do not save through a retirement program.)

So, the idea of retiring early and going against the crowd seems scary. People are fearful to go against what everyone else is doing.

Humans are pack animals. We tend to follow one another, for better or worse. We are easily influenced by the thoughts and emotions of others.

If you look at any successful business person, investor, or really anyone who has achieved success, then you’ll find that they took a unique path. They did not follow the crowd. They pursued a goal on a lonely road and didn’t get much support along the way.

That’s scary.”

3 – When did you become financially independent and what were, in your view, the determinant factors for that?

“Probably around the age of 28. And the only reason why I got there was because of extreme frugality, discipline, and consistency.

I got an actual job, worked as much as I could, saved as much money as I could, and invested as much as I could.

However, I don’t like the term ‘financially independent.’ Yes, it’s true that I don’t have to worry about going in and punching the clock at a job anymore… but it’s not like I just kick back all day long and drink beers.

I’m probably working harder now than I ever have. It’s within my personality to always be working on something.

I’m motivated to create and achieve new goals every day. I have long term dreams that I would like to accomplish and I always keep those ideas on my radar.

If you were to look at anyone who has been significantly successful, you’ll find someone who is highly motivated. It’s not like once you reach a certain “number” you just kick back and relax. You stay at it. You want it. You crave it.”

Cody’s answers make total sense to me. I second his words on the desire of freedom being the number one reason for people to want to retire early, and fear being the main reason why most people do not retire early. And as I’ve said many times on my blog, I envision my “early retirement” as a full-time job, just like it is for Cody. Every time I interacted with Cody we seemed to agree on most topics, even the most controversial ones.

I then asked Ben from Sure Dividend, who I regard as a guru of stock investing, the following questions, which pertain to the role of stocks in early retirement strategies.

4 – Stocks seem to be a popular investment tool among those who retired early. What core principles should prospective early retirees know about stock investing?

“Above all, potential early retirees should think of investing in the stock market as buying pieces of real businesses (because that’s what it is), not a form of speculation or gambling. Having a ‘business owner mindset’ helps to reduce the likelihood of selling just because the price declines. If you are able to hold great businesses for the long run, you will very likely generate strong total returns and compound your money.”

5 – What would be, in your opinion, the best advantage of stock investing in comparison to other investments?

“The stock market is a unique wealth building tool. If you look at the long-term average return from home price appreciation, it’s around 1% or 2% a year. Gold is even less. Bonds aren’t much better. Investing in the S&P 500 has compounded wealth at around 9% a year over the long run. The phenomenal wealth building potential of stock investing – without the use of dangerous leverage – helps it stand out from other asset classes.”

6 – As of February 2017, is it a good time to invest in the stock market or can you see a crash coming?

“No one can predict the future. We have been in a bull market since 2009. Interest rates are near all time lows. Will there be another recession/market correction? Absolutely. Will it be in 3 months, or 5 years? I have no idea. The stock market is not a monolithic block. It is made up of thousands of individual businesses. Some of these businesses have strong competitive advantages, shareholder friendly managements, and trade at fair or better prices – regardless of the overall market price. I believe it makes sense to buy great businesses when they trade at fair or better prices regardless of where the overall market is. You can do that now.“

I can see a lot “of Warren Buffet” in Ben’s words, especially in the last questions when he says that it makes sense to buy great businesses at fair prices. Thanks for sharing your knowledge Ben!

As a Real Estate investor, I had to bring in Real Estate experts, because I really wanted to know what they had to say about Real Estate in the context of early retirement, as REI is perhaps less popular than stocks. I asked Juan Pablo from 100percentfinanced.com the following:

7 – You retired from the corporate world. Would you still go the Real Estate route if you started your Early Retirement journey all over again?

“Absolutely. Real estate investing, especially multifamily real estate investing, is the fastest way to financial freedom. Leverage is the name of the game. If a bank (mortgage company) is willing to lend me 80% of the money to buy a property that’ll put money in my pocket, then that’ll be a great way for me to retire from a corporate job. Plus, you can use business funding to fund the remaining 20%. As long as these wonderful people called tenants continue to pay their rent, then I’ll continue to buy a property 100 Percent Financed being that they’ll be paying off the debt, the property expenses, vacancy and maintenance reserves, as well as my personal living expenses. Real estate investing taught me so much about business, personal finances, using leverage, as well as how to use creative financing. Real estate investing not only helped me quit my 9 to 5 at the ripe age of 30 years old, it also opened the door to other opportunities, such as speaking engagements, books, eBooks, and online business. Sure, real estate may have it’s downsides (tenants not paying rents, toilets breaking, and taxes increasing), but just like everything in life, it definitely has its upsides (income, depreciation expense, growing equity, appreciation, and the ability to use leverage.)”

8 – To those thinking about going through the Real Estate route, what are the most important things and tools they should know of?

“Getting started in real estate investing is similar to embarking on a road trip. You pull out your GPS and you enter your starting point, your ending point, and then the GPS will calculate three routes for you to take (shortest route, fastest route, and cheapest route). Before you started your engines, you know exactly where you are, where you need to go, and how to get there. You should take the same approach with real estate investing. Complete your Personal Financial Statement (PFS) to find your own starting point (financially speaking), then determine your final destination (how many rentals you need to hold in your portfolio). Last, determine who quickly or cheaply you want to get to financial freedom. If you need a PFS or a roadmap to help get you where you want to go, then visit my blog www.100percentfinanced.com.”

I definitely agree with Juan Pablo that leverage is the name of the game, and what it makes REI so attractive in comparison to other types of investments. Next up was Mr. 1500, who is on the verge or retirement.

9 – What is, in your view, the most crucial factor in retiring early: earn, save or invest?

“Earn. Earn! EARN!!! Live a frugal life and always keep your spending at the same level regardless of what your bonus is, but hustle like crazy to maximize your investment accounts. If you’re a young professional, come in early and leave late. Figure out creative solutions to problems. Volunteer for the hard work. Keep notes of your achievements and remind your boss of your hard work when it’s time for your annual review. If your job doesn’t have room for advancement, seek side hustles. Drive for Uber on your downtime. Rent a spare room in your home. Buy a duplex, rent out half and get a roommate. And save all of that surplus money!”

10 – Rent or own a home? Why?

“I like owning, but only if I know I can make money from the home. My favorite strategy is to buy the ugliest home in the best neighborhood that I can afford. I then fix it up while I live in the home. This is referred to as a live-in flip. If you live in the home for two years, you probably won’t incur any capital gains. I used this strategy to get my nest egg rolling.”

I absolutely second Mr. 1500 on the side hustles and maximizing your earnings, to retire early! I too think it makes more sense to focus our time on getting a few extra hundred bucks and putting them to work, whenever we can.

I then asked another already retired fellow, FireCracker Revolution from Millennial Revolution, a few other questions which could help those trying to retire early.

11 – What is your preferred type of investment? Why?

“Not a damned house, that’s for sure.

A big part of our site Millennial-Revolution is about pushing back on the idea beaten into most Millennials that a house is the best investment ever because housing is supposedly “safe” and housing only ever goes up, up, up.

Here’s why housing doesn’t work when it comes to retiring early. At best, housing is a wealth trap. What most Millennials do is get themselves up to their necks in debt, buy the most expensive house they can afford, and then spend 25 years shoveling money into paying off that mortgage while convincing themselves that they’re getting richer because their house value is going up. But then, when it comes time to sell and cash out, they just buy an even more expensive house. So money goes into housing, but then it never comes back out.

And that’s the best case scenario. Worst case, houses become a money pit. Everyone who talks about how great housing is always includes the line “excluding taxes, maintenance, and other costs for simplicity.” This is what I call real-estate math, which can magically make shitty investment sound awesome. But when you actually peel back the curtain on those costs, you realize that all the real estate commissions, property taxes, maintenance, utilities, and all that stuff actually eat up most of your gains. We did an analysis on our blog (http://www.millennial-revolution.com/rent/leverage-friend-enemy/) where we actually broke down how much it costs to own a house and were flabbergasted to realize that even in a house that increased in value by almost $125k over 3 years, 95% of the gain got eaten up by these hidden costs. Houses do make money. Just not for you.

Instead, the investments that do work are low-cost Index ETFs. These are Exchange Traded Funds that, rather than own 1 or 2 companies, own every company within the entire stock market. As a result, Index ETFs can never effectively go to zero (since that would involve ALL companies going bankrupt at once), and over time track the long-term performance of Indexes like the S&P 500, which over 10-15 year periods have never lost money and have averaged over 10% annualized gain.

The trick with ETF investing is that because there are so many ETFs out there, investing seems scary and complicated compared to buying a house. But the truth is, investing is actually pretty simple. Which is why we run a weekly Workshop on our blog where we actually walk people through the process of constructing an Indexed portfolio using real money in the real stock market.

The cost to follow along is free, and you can find it here. (http://www.millennial-revolution.com/investworkshop/)”

12 – What was the most determinant factor for you to retire early?

“I read a study the other day that 70% of Americans hate their jobs while the other 30% are filthy liars.

I was firmly in the 70% camp.

I used to work in a cubicle farm, doing the 9-to-5 thing. Sure it was stressful, but that’s what being an adult is supposed to be like, right? So I figured I should keep my head down, work hard, and hopefully everything would work out. I even started looking for a house because I thought “that’s what everyone else does.” But that all changed when my co-worker nearly died at his desk.

He collapsed out of the blue one day unable to breathe. Someone called 911 and he was wheeled out on a gurney, and I later found out that he had to go into emergency surgery. His doctor told him that he had arrived just half an hour later, he wouldn’t have made it. And yet a week later he was back at that same desk, stressing out and continuing to work the same massive overtime that had nearly killed him to begin with.

Why? He had to pay off his mortgage so he had no choice.

And that’s when something clicked in my head.

Why are people literally killing themselves to pay off a mortgage? Sacrificing your life for a house you can’t enjoy after you die? It didn’t make any sense, yet everyone was blindly doing it because that’s what all their friends and family were doing.

So that’s when I took all the savings I had piled up for my down-payment and invested it instead in a portfolio of low-cost Index ETF’s. Three years later, those investments (along with my continued savings from not buying a house) had grown from $500k to $1M, and I realized that because 4% of my portfolio equaled my living expenses, I no longer had to work anymore.

Now I spend my days traveling the world, working and volunteering on projects that I’m passionate about (like my blog), and just enjoying life. It was the best decision I ever made.”

Interestingly enough, I interviewed two early retirees who love and hate Real Estate as an investment. This backs up my theory that there are many ways to retire early and there is no universally better way to do that. You really have a myriad of options, but you have to find the option that suits you the most. Keep in mind that Juan Pablo is based in the US and FireCracker is based in Canada. I am not even suggesting that you can only do it in the US, and not in Canada, I am simply saying that one’s personal context is highly relevant. Now this also proves the point that you can take the road that suits you the better because Juan and FireCracker retired early though two very different ways.

I had to get more questions answered on Real Estate, because that is what the majority of my readers are interested in, so I asked Mindy Jensen from BiggerPockets a few other things about Real Estate:

13 – What are the key elements of good Real Estate investments?

“The key elements of a good real estate investment are cash flow and appreciation, however they rarely are found together. You either have a property that produces cash flow – with little chance for appreciation, or you find a property that has an enormous appreciation potential but will produce little monthly cash flow. Finding one that offers both is the unicorn of real estate.

But here’s the kicker, you can calculate cash flow before you purchase a property – based on the current or market rents, and your estimated expenses. You can take an educated guess at the value of a property you plan to improve – or force the appreciation – based on comparable properties that are selling in the area. But actual, natural appreciation cannot be predicted, which is why you hear from so many investors not to count on appreciation.

You can’t know how much the market is going to go up in the next 6 months or even if it will go up at all. Which brings us back to our original question, what are the key elements of a good real estate investment? Ultimately, one that makes money.”

14 – What would make more sense for most people? A REIT or an active RE investment?

“When I think of real estate investment, I think of either a buy and hold property or a fix and flip property. While there are so many more ways to invest in real estate, these are the two most popular methods. A REIT or Real Estate Investment Trust is a far better option for just about anyone looking to invest in real estate today. As a landlord, you are responsible for getting tenants into the property and keeping the property in top condition. Tenant Screening is an art, and making a mistake and allowing the wrong tenant into your property can have disastrous consequences. Keeping the property in top condition can mean taking midnight phone calls about overflowing toilets or worse.

With the Fix and Flip model, you either need to know how to make repairs and rehab a house, or find someone to do the work for you. Hands down, the most difficult part of a rehab project is finding a great contractor. There is no shortage of bad contractors out there, and pretty much every single flipper I know has worked with at least one.

Compare this to the REIT, where the basic model is to hand over an amount of money, then collect the monthly payments from the management company, leaving any issues to be dealt with by someone who has far more experience than you. Yes, you are collecting less profit, but doing almost zero work for that profit.”

Absolutely agree that the unicorn of REI is cash flow + appreciation altogether! Great points by Mindy!

Next up was J Money, from Rockstarfinance.com. I tried to take advantage of his broad knowledge and vast experience online and the numerous early retirement stories he came across, through his platforms.

15 – Do you think everyone can retire early (say, in their forties)?

“I think anyone *can*, but you have to really WANT IT BAD enough to make it happen. As well as get lucky, don’t have anything major happen to you or your family like catastrophes, and you stick to it from start to end 🙂 So I guess no – not everyone WILL be able to retire early – but if you commit to it and hustle hard for a good stretch of years there you’ll def. have a great shot at it. And even if you miss the 40’s, retiring in your 50s and 60s is still great too! It’s only a major problem if you end up never being able to retire which unfortunately is the case or many :(“

16 – What would you do differently, financially-wise, if you could go back to your 20s?

“The only thing I really wish I did back then was to start practicing minimalism more. It took me until my early 30s to finally catch on, and it’s been SUCH a blessing since. I’ve cut down on most random spending, decluttered almost all my possessions, and now just really have a great peace of mind when it comes to “stuff.” If I had gotten into it sooner not only would I have saved some extra cash, but I would have avoided some pretty boneheaded moves too like buying a house when I shouldn’t have, as well as focused on travel an *lifestyle* more than just trying to hustle hard 24/7. I’m all about making that money and trying to retire earlier, but I also think we suck as a society in trying to enjoy the here and now too. And minimalism helps out a lot with that.”

Indeed, we can’t foresee catastrophes and those can be the deal breaker for many trying to retire early. Absolutely agree with minimalism and on the magical stress relief it brings! I am pretty sure that enjoying the road is hard for many of use. I can relate. I focus on making money and I can’t really appreciate the journey. I need to work on that myself!

The next participant, PoF, is someone with a very different background because he is a physician. I really wanted him to join the roundup, as I think his background with resonate with some of my readers. And of course, I had to ask him stuff related to the fact that he his a physician…

17 – You want to retire early, so you won’t capitalize much on your (presumably) large salary, as a physician. Do you regret having become one?

“Believe me, I have contemplated this one, but I never have to dwell long on it, because I quickly reach the same conclusion every time. I don’t regret becoming a physician one bit.

You’re right about the salary – I have done quite well, having earned a gross salary exceeding four million dollars in a little more than ten years. Even after paying over $1.6 million in taxes over that timeframe, I’m left with a healthy sum. By living relatively frugally, I still have every penny I’ve earned and then some. Fortunately, the market’s returns have been generous, and enough to support our lifestyle as we grew from an engaged couple to a family of four over the course of a decade-long career.

It’s also true that I may not enjoy this salary for that much longer. If I follow through with plans to retire early as soon as next summer, I will have had a 12-year career that matches the length of my education and training.

That doesn’t bother me. To insist that I keep working if it doesn’t feel like the right move for my family would be to invoke the sunk cost fallacy. I like to make decisions with our future in mind rather than my past.

While I may have had a separate but equally amazing experience if I had chosen an alternate career path, I likely would not have experienced the following:

Meeting my wife. I may have met a different future wife, but I’m super happy with the one I found, and I can’t imagine we would have met if I hadn’t matched into a particular residency program and moved to a specific city. Similarly, I have met hundreds of great people I consider friends and I only know them because of my chosen career path.
Being part of a life-saving team. You don’t have to be a doctor to do this, but if you’re not in healthcare, you’re much less likely to be part of a hands-on team that literally prevents people from dying. Engineering life-saving devices or pharmaceuticals can have the effect of improving and saving lives, but that can’t compare to performing manual chest compressions or placing the breathing tube in the right spot after others have failed.
Reaching my full potential. I’m not saying I have met my full potential, and it’s a rather nebulous outcome to try to measure, but if I had chosen a different path, in the back of my mind I might always wonder what might have been if I had chosen to become a doctor. Now, I’ll never have to wonder.

While there are certainly quicker paths to FIRE that require less hardship, I don’t regret choosing medicine or choosing to retire early from it. I’m not even sure I chose an early retirement; sometimes it feels like early retirement chose me.”

18 – What is the most clever thing you have learned with an Early Retirement blog?

“This is a tough one. I’ve learned so much since starting my very own FIRE blog 14 months ago.

Of course, I’ve learned the technical aspects of blogging. I’ve learned that successful blogging takes a great deal of time and a certain level of dedication. I’ve learned that there is a wonderful amount of cooperation and collaboration among bloggers, as you are witnessing in this monster of a blog post today.

I’ve also learned a fair amount about personal finance. When I do research for a blog post or field a question via the comments or an e-mail, I’m forced to learn some of the finer points of our tax code, different retirement accounts, or how exactly to perform a Backdoor Roth with Vanguard.

Blogging requires a fair amount of time not only writing, but also thinking and reflecting on one’s own situation. Hence, I have learned quite a bit about myself. If you’re going to write about life, liberty, and the pursuit of happiness, you’ve got to figure out what you want from life, what happiness means to you, and how liberty can help you achieve those goals. That’s pretty clever, and without a blog, I doubt I’d spend near as much time answering those deeper questions.

The most clever thing I’ve learned from blogging? If I could choose just one thing to call the most clever, it would have to be the most unexpected outcome from all of this. Blogging is a great way to make new friends with all kinds of remarkable people. I don’t think there’s a state in the union where a reader or fellow blogger wouldn’t be happy to buy me a beer (or let me buy them one — after all, I’m the rich doctor 😉 ). I’ve already met a handful of awesome people in real life that I never would have met if I hadn’t started a website.

With a blog, you can easily connect with people who have similar ideals, goals, and mindsets. People from around the nation and around the world. People like you, Ben, and a couple others who contributed to this post with whom I’ve had the pleasure of enjoying a couple meals and beers with along the shores of Lake Michigan. When I started writing, I had no idea what a rewarding social endeavor it would be.”

Absolutely. Blogging about Early retirement can definitely make you question the most fundamental questions in life, I can relate!

Man, I agree with you so much on the second one. There is such a beautiful torrent of cooperation among bloggers that it was actually overwhelming for me, at first. After I realized it I felt like approaching everyone out there :-). Now I simply enjoy it when opportunities pop up. Last week, I closed a deal with one of my readers. My blog has certainly rewarded me in ways I didn’t expect when I started it. I am glad you feel the same!

Inspired by some bloggers who retired early, I recently discovered the potential of online income and I started to believe that this type of income could be an important tool for me to retire early. Michelle from Making Sense of Cents has released truly inspiring income reports, which grew consistently over time. In January 2017, she made almost $140.000! I figured she would be the most competent person to answer the following questions:

19 – What is the number one advice you would give to those willing to make significant money online?

“My top piece of advice for those who want to earn money online is to find something that you are interested in or that you have a skill in and see how that can translate to a way to earn money online. Or, you could take a course in a specific way to make money online and learn how to make money in that form by taking the course! So, you don’t necessarily need to already have the skills that are needed in order to run a successful online business – there are plenty of courses that exist that can help you learn how to make money in the hundreds and even thousands of ways that are possible.

There are tons of ways to learn how to make extra money, so I’m sure if someone truly wanted to work online that they could find something that would work for them. Seriously, there are plenty of ideas.

For example: A person could work online as a graphic designer, learn how to start a blog, become a virtual assistant for others, manage social media accounts for companies, build websites, and much, much more. As a full-time traveler, I have met countless people who work online and manage to travel full-time, and everyone does something different. Due to this, I absolutely know that it is possible to make money online and from your home or from all over the world!

As you can see, there are ideas for nearly anyone and everyone. You just have to look around, see what you may be interested in, and then look into what it takes to turn that into a money-making business idea.

Personally, my favorite way to make money online is to have a blogging business. To run a blogging business, all I really need is my laptop and an internet connection. It is a very affordable business to start and you can be your own boss, create your own flexible schedule, travel full-time, and more. Plus, I get to help readers each and every single day improve their lives – and emails from them are the best. Blogging allows me to earn over $100,000 per month and it’s a business idea that I am so glad about. It all started as a hobby too!”

20 – Do you think it could be done in part-time? Is it sensible to give up a 9-to-5 job to pursue a career online?

“I think making money online can definitely be done part-time. I started my blog on the side of my full-time job as a financial analyst and I was able to grow a successful business this way. I also quit my job to become a full-time blogger, even though I had a great and stable career as an analyst.

So, I am the exact answer to these two very questions right here, actually 🙂

Like I said above, there are all sorts of ways to make money online, so it all really just depends on what you want to do. There are online careers in which you may only work one hour a week, and then there are others that may require a full team of people who are working on the business in order to make it successful. It all depends on what your business idea is, what you want from it, and more. But, yes, it can definitely be done part-time for the majority of online business ideas – you just may make less money if you decide to do it that way.Now, if you are choosing to keep it part-time, you could outsource tasks to others and hire employees or freelancers, so that you can have more time and a better work-life balance.

Now, if you are choosing to keep it part-time, you could outsource tasks to others and hire employees or freelancers, so that you can have more time and a better work-life balance.

Just a few years ago, I didn’t really even know what a blog was. I started a blog just because I wanted to have a hobby, improve my financial life by publicly talking about it, and so on. I never started my blog with the hopes of earning a living.

After around a year of blogging, I was already earning several thousand dollars a month from my blog. Due to that, I decided to make the leap into self-employment. I left my day job as a financial analyst to pursue a career online, and it’s a choice that I am still very, very happy with. Personally, I cannot see myself going back to work for someone else, or even going into an office. I love being able to work online and it is the best thing ever!”

Michelle is absolutely killing it and she is definitely a source of inspiration for all of us. I am very happy for her success and her freedom. Anyone wanting to retire early may indeed find inspiration in her story and make some bucks online, to accelerate the journey!

Finally, I decided to answer 2 of the most common questions I get from my readers:

21 – I have some extra cash at the end of the month and I am thinking about working towards my early retirement. What should I do?

I think that this question is predominately common among millennials, who start to generate some extra cash and want to get some return on their savings. I think it is wonderful that they think about saving and investing. At the same time, I understand that due to the lack of financial education in our educational system, their financial IQ is not as developed as they would like it to be. Therefore, my first recommendation is for them to read as much as possible. I have put together a list of books on personal finances and money, which everyone should read. As I am preparing summaries and reviews of these books, you don’t even have to buy them to learn the major ideas behind them.

The main idea is that even though you could have someone allocating your capital every now and then, you should learn how to do it yourself. This will help you optimize your returns and not depend on a third person to invest. Plus, think about it. People spend tens/hundreds of thousands of dollars on a degree at college, but maybe less than $1000 over their lifetime on books. This doesn’t make any sense! Why spending so much money to learn from professors (who learned from other professors), and being reluctant to spend something like 10 bucks to learn directly from millionaires, who are basically giving away their formulas?

Easy ways to start investing include index funds and ETFs, as sggested by FireCracker, P2P lending or even starting a blog. Do not spend the profits of your investments. Instead, reinvest them. Do the math regarding how much you need to retire and work relentlessly towards that goal.

22 – Won’t I be bored after retirement, if I retire in my 30s?

I don’t know about you, but I won’t. I have personally started to work towards my early retirement because I was diagnosed with CFS. However, even if I were absolutely healthy, I would be going down the very same path, I am sure. You see, my biggest pleasures in life include hitting a nice cafe and drink an expresso, hike in the most beautiful places in the world, find hidden lakes to swim in, like this one:

and write content for my blog. Having a job does not give me the freedom to do that. If the weather is awesome on Thursday, I can’t go to the beach because I need to be in the cubicle. Now, you may like working for someone, every day from 9 to 6. I am not saying you shouldn’t. However, even if you like that, it won’t hurt you to work towards financial freedom.

On top of that, you’ll not have to work for money again. You’ll work because you’re passionate about what you do. And I truly believe that we show the worst of our sides when we have to work for money, but the best of ourselves when we work for love.

I think that the whole point of working after financial freedom is the integrity you adopt in everything you do work. If you are not financially free, you’ll have to work regardless you like it or not. If you don’t have to work for money, you can still work on what you love, but everything will come from your heart.

All the best,

Ben