How many of you are financially free?

[Roshan K.]

How many people are financially free on here? For those of you who are, do you still work or are you "retired" and living off the cash flow? If you are financially free, which method did you use to acquire it? (ie buy and hold, syndication, index funds, etc)

It just seems that the podcasts many times are about people who live off their investments, but no one talks about life being that way on the forums...

[Frank Adams]

We're financially free with an income in the $150K/year range. We are 70 and 74 years old.

I had one rental in CA that I couldn't sell when I accepted a job in TX because the Proposition 13 election was coming in a month. People would ask about property taxes and I'd lay out the three possibilities and they'd say, "oh, I can't make an offer without KNOWING what they'll be". So we kept the house and rented it at a small, about $40/month positive cash flow.

Five years later the oil crash hit the Houston RE market like a ton of bricks. The average house in Houston lost 1/2 it's value and the VA and RTC foreclosures were 2 to 3 pages in Friday and Saturday's newspapers. By 1990 the market was turning and we started buying, often for cash. By 1995, 2 months after buying the most expensive house we'd ever bought, I quit my salaried job to open a new, unrelated to RE, business. 4 months later my wifelost her job so we had no health insurance. Within about 2 1/2 years we'd paid that house off and haven't had a mortgage since.

Neither of us had pensions  because we worked for smaller companies but we both had 401k that we always CONTRIBUTED THE MAXIMUM ALLOWED TO. 

Some of the keys that allowed us to retire early and have more money than we'll ever spend:

We always lived below our means: When we took out that last mortgage in 1995 I was earning $62,000/year, my wife was earning about $47K/year and we had another $35K/year in net income from seller financed mortgages. As I said above that was the most expensive house we'd ever purchased and we paid $125,000 for it, about THIRTEEN MONTHS of our salaries. Both the Realtor and lender told us we needed to be buying a much more expensive house. No thanks.

On living below our means: The first new car we ever owned was my wife's Lexus purchased 2 years after I had retired. She retired 4 years earlier.

I did a lot of my own work on my houses. I've re-framed walls that were termite eaten, sheetrocked, installed new shower pans and re-tiled, replaced roofs, and obviously painted more than my share of places on turnovers. I once even did the "scut" work for a cut-rate guy who was jacking up a cracked slab. I was the least productive guy on that team but following that I decided that if I ever needed to I could do that job!

We have a net worth of about 3 1/2 million and no heirs. Until 3 years ago we were both in excellent health but I'm fighting my second bout with cancer in that time and waiting until I feel well enough to head to France and Spain for a month, probably in June.