I have made my early retirement plan known throughout the web. My hope is that I can generate enough income from my blog that I can replace my day job and transition to managing my portfolio of blogs and investing in real estate. My hope is to sustain, if not increase, this income in order to fund my early retirement.
How My Early Retirement Plan is Different
Most people, when they talk of early retirement, cut their expenses drastically. They work really hard to save every penny that they can in order to save enough money. I am definitely a huge fan of this method as I think everyone should avoid the massive consumerism in our society. Saving money for a rainy day is always a great plan. Yet, because I am still young, I do not want to make huge sacrifices. I am not entirely unhappy at my day job, so why would I want to sacrifice my comfortable lifestyle just for the sake of working for myself?
Instead of trying to save a large pot of money and reduce my expenses drastically, I am focusing on funding my retirement with cash flow. I don’t think a lump sum is the right method for my early retirement – primarily because it means that it would take decades longer to retire. Instead of waiting 15-20 years to save up 1 million dollars, I would much rather create a business that will generate the equivalent of the safe withdrawal rate.
What My ‘Cash Flow Retirement Plan’ Offers Me
My focus on cash flow as the fund for my retirement primarily offers me two benefits as opposed to the lump sum approach. I have already hinted at both benefits. Although traditional pension schemes work well for most, a cash flow approach allows me to retire early. I don’t have to wait around to have enough income saved up that I can live off of the interest. Second, I don’t have to radically reduce my expenses to prepare for retirement. By focusing on building up a steady stream of income that does not require me to work a traditional job, I can feel confident that I will have that income tomorrow and the next day. I don’t have to count my pennies in preparation for this transition because the income will still be rolling in as if I had a day job.
By focusing on the cash flow, I can truly accomplish my goal of early retirement – that is, to enjoy life to its fullest. I don’t have to miss out on the trips to Hawaii, or the occasional sports game, or anything like that. I can continue my modest lifestyle as it is without fear of running out of money.
We have our eggs in multiple baskets, real estate, stocks, bonds, a small business, and blogging. I plan on retiring “early” and having multiple income streams from different sources: investments, pension, and blogging. I don’t want to depend on one source for income just in case that source of cash no longer provides what is needed.
That sounds like a great plan.
I have to think that blogging properties are going to get more valuable as the internet goes on right? I mean with more and more people getting access and using it everyday, the entire platform should only get more valuable. I hope so for our sakes!
I hope so too. I’m just afraid that it is too good to be true. I mean, on one hand, making money online just seems so easy (it’s a lot of work though)
We haven’t really put too much thought or effort into this at this stage in our life, but we definitely need to start doing this soon.
That’s a great idea.
The earlier you think about it, the better.
I am trying to do both. I really want to have a nice lump sum of investments that pay dividends, but I also want to see about real estate and maybe my blog all being able to cover expenses. If I can have multiple streams like these and they all individually would be able to pay for my lifestyle, I can retire early and keep up with my savings for anything that comes up.
I like your plan a lot more than the traditional “save 2.5 million and withdraw 4% annually”.
That’s a great idea poor student. Why not have an extra safety net.
Maybe you can do both? Once you build up a suitable cash flow, work on the 7 figure savings?
It’s possibly that some of your investments will have a reduction in cash flow at some point – and that’s where leaning on the nest egg comes in handy. I’m thinking vacancy in real estate properties, dividend cuts, and even a future with less lucrative online advertising. Shoot for the stars, land on the moon, right? Maybe I’m too pessimistic, haha.
I think you have a great point. I’m all about making sure to have a safety net (or two/three) before walking on the tight rope.
Are the two (lump sum and cash flow) mutually exclusive?
Indeed they’re not, but often people focus just on the lump sum and fail to understand what could be achieved with a little passive income.
I totally agree that cash flow is very important. I need to work on creating some passive income.
These are excellent comments. I have discovered recently that cash (and cashflow) is still king!
In my view, Cash Flow is very important. It helps to upkeep your lifestyle and maintain your stress level as well.
Thanks for sharing!
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I am doing well with my side business, but we don’t really have passive income. Something I am definitely interested in growing!
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