Five Strategies We Have Used To Achieve FIRE – And What Has Changed

I think of achieving FIRE in stages based on the lifestyle we’d like to live. At a minimum, we have achieved FIRE if we decamp to Costa Rica full-time – that’s why I think of Costa Rica as our FIRE escape plan B.

However, we are still working on our ideal FIRE escape, which would include part-time living in a variety of places, including Costa Rica, Jacksonville, and New York City, with time and money to spare for substantial international travel. (Since we married and started a family right out of college, we didn’t travel much before, so there is a lot of pent-up demand!)

We got to the minimum stage of FIRE with five main strategies:

1 – Mindset work

Shifting my perspective from achieving a specific retirement number to how we could retire regardless of any number (i.e., shifting from what to how) opened my eyes to the prospect of achieving FIRE in stages. This helped me get more creative about our options;

2 – Geo-arbitrage

Buying Condo Boom in Costa Rica is how geo-arbitrage directly led us to FIRE. But a preliminary step was trading in our expensive Manhattan rental apartment for an outer-borough purchase – geo-arbitrage on a smaller scale;

3 – Expense reduction

Changing our housing situation saved us over $1,000 per month. We also made smaller adjustments to our daily living – cutting the cable cord, cooking more and eating out less. Scott’s shift from employee to consultant saves a lot in commuting costs;

4 – Consulting

Cutting expenses can only go so far. On the income side, I took on extra HR consulting projects in the last few years that often made my schedule too busy and too volatile to be sustainable long-term but gave us extra shots of income we could invest towards our FIRE escape;

5 — Real estate

Our major investment has been in real estate. Real estate has contributed to FIRE in several ways: 1) rental income can (eventually) replace our business income; 2) rental income is portable so we can travel and still earn; and 3) we can stay at some of our properties.

What worked then still works now but with some changes

We’re still using the same overall strategies but life changes, markets change, and therefore specifics change:

1 – Mindset work shifts from strategy to execution

I’m still working on training my mind to think differently (I had years of mental programming around having a traditional career, so FIRE still feels weird even years into the journey).

However, while the last few years were about thinking more creatively, the next few years are going to be about staying the course and executing the plans we envisaged. All this recession talk makes it even harder to just stay the course!

2 – Geo-arbitrage shifts from housing to healthcare

The geo-arbitrage play we’re looking at now is mainly regarding health insurance. With so much uncertainty in the US, it’s hard to rely on having affordable coverage in the future, even if we can afford it now.

Our insurance premiums increased well above the rate of inflation in the last year. If this is the average annual increase, coverage will become unaffordable sooner rather than later. Learning the ins and outs of private global medical insurance is something we will focus on in the next few years;

3 – Expense reduction becomes cash flow management

With six figures in college costs starting to accumulate in just a few months, there will be no expense reduction in the next few years. Our expenses are going up for sure, and we’ll have to focus on managing our cash flow so that we don’t draw down our savings too quickly;

4 – Consulting needs to be 100% virtual

The positive side of the college equation is that it means our travel plans can finally be realized. My consulting work over the last few years was heavily New York City based, so the next few years will focus on replacing NYC clients with virtual work.

We’re already working on our first online product now, and we have all along been developing skills that accommodate work and travel, so the transition is underway but incomplete;

5 — Real estate steps up in importance

With consulting work decreasing as we make a transition, and expenses going up with college, our real estate portfolio becomes that much more critical.

As most of our properties have several years’ worth of income and expense data readily available, we can see what to keep, what to sell, and what to refinance.

We’re doing each of these things and will report back as they are completed (our current refinance adventure for one of our rentals will definitely be an entertaining blog post).

What else will change?

The last few years of focusing on FIRE got us further along than I expected. The next few years will be critical to ensuring we’re on the right course. However, it’s not just what we actively do, but also what happens around us.

I suspect that our travel plans will provoke changes. I always get ideas from visiting new places and seeing different possibilities. Travel changes many a person.

Becoming empty-nesters is also a big transition. We are excited about the flexibility this new chapter brings, but a change of this magnitude has unpredictability.

Changing our business from local to virtual is also a transition. Scott and I are working more closely together on this, and that’s another change (spouses in business together is another blog topic for sure!).

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I’m sure there will be other changes. How has your FIRE journey changed?