Reflecting on My Journey to Financial Independence: What I’d Do Differently

I run a lot. My core group of friends get together and run. It’s a very successful group dominated by financial experts and leaders in the finance space. One of the guys in the group is a professor at a very prestigious university. I’ll call him Professor Peter for this article.
Professor Peter always has thought provoking questions. We were running a few days ago and he hit me with one. He asked, “If you had to do it all over again, what would you do differently on your path to financial independence?”
I usually dodge or deflect that kind of question. I’m very content with where I am. I have financial freedom that allows me to spend my days as I choose. Why would I change anything, I like what I’ve built.
But I knew Professor Peter wouldn’t let me avoid answering. So for the next mile or so I gave a deep reflection on the choices I’ve made, the lessons I’ve learned, and the wisdom I’d impart to my younger self.
What follows is a candid exploration of those reflections. While I don’t dwell on regrets, there are certainly insights I’ve gained that might have smoothed the journey or enriched the experiences along the way.
Table of Contents
1) I Would Have Understood That Not Everyone Shares the FIRE Dream
For years, I believed that the desire for Financial Independence, Retire Early (FIRE) was universal. Whenever friends or colleagues expressed dissatisfaction with their jobs or financial situations, I thought they were asking me for my advice.
I thought they wanted me to share the strategies and mindset that I was using to retire early.
I poured energy into coaching others, outlining meticulous plans, and enthusiastically sharing advice on budgeting, investing, and passive income streams. My intentions were pure. I genuinely wanted to help them break free from the constraints that I felt they, too, wanted to escape.
It wasn’t until a pivotal moment with my Life Coach that I realized my misstep. She pointed out that not everyone aspires to the same goals, or even believe it’s possible. She added it isn’t my responsibility to save them.
Many people find comfort in the familiar, even if it’s imperfect. Complaints don’t always signal a desire for change. Sometimes, they’re just a way to vent.
In hindsight, I see that my excitement giving advice may have come across as lecturing. Instead of feeling supported, some friends might have felt judged or pressured.
If I could do it over, I’d listen more and advise less. I’d recognize that each person’s journey is unique, and unsolicited guidance isn’t always welcome. Understanding and respecting others’ perspectives is as crucial as pursuing my own dreams.
2) I Would Have Bought One More House
Real estate was a cornerstone of my path to financial independence. In my early 20s, I bought several rental properties that tenants paid off and I sold in my early 40s. Yet, there’s a lingering thought that perhaps I should have purchased just one more house.
Owning more properties means more responsibilities. It means more maintenance, tenant relations, and financial risks.
But I know I could have handled one more. I knew it all along but didn’t do anything about it. That extra property might have translated into an additional $150,000 in assets or increased monthly income. It could have provided a greater cushion for us now.
Of course, there’s a delicate balance between ambition and overextension. Had I pursued multiple additional properties, I might have found myself overwhelmed, potentially jeopardizing the stability I’d worked so hard to achieve.
But one more? It’s a calculated risk I sometimes wish I’d taken.
3) Navigating Romantic Relationships While Being a Landlord in My 20s
Managing rental properties is a roller coaster. For example, when the temperature soared past 100 degrees and an air conditioner failed, it wasn’t just one. Instead it was often several units at once.
These “fire drills” demanded immediate attention, pulling me away from personal time and disrupting plans.
This unpredictability took a toll on my relationships. My ex-girlfriends often struggled with the sudden interruptions and the constant demands of property management. The issues were rare, but when they happened I was glued to my phone. This was before people stared at their phones all day.
Another issue is my ex’s didn’t always share my vision of financial freedom. Instead, they saw a partner who was living a frugal life. I didn’t have a nice house in a nicer neighborhood. I drove cars with 200,000 miles. I seemed poor.
It was hard for girls I dated (and their parents!) to see me for what I was. I was a future wealthy person. I was intentional about it also. I liked “Stealth Wealth”, even for dating. I didn’t want to marry a girl who only wanted me for money, so I hid what I was building.
Looking back, I realize that better communication might have bridged the gap. I was so focused on the future that I sometimes neglected the present.
Sharing my long-term goals and involving them in the process could have fostered understanding and perhaps even support. Balancing ambition with attentiveness is a lesson I carry with me.
Or maybe I could have done a better job of dating girls that were aligned with stealth wealth.
But this is a problem with thinking about what I would do differently. I love my wife. In retrospect though, I could have been less of a enigma for the more awesome girls I dated.
4) Preparing My Wife for the Realities of Early Retirement
When I met my wife in my early thirties, much of the heavy lifting toward financial independence was behind me. Most of my sacrifices were behind me. I hadn’t made $50k a year in my salary until I was 30. By the time we met my salary was skyrocketing to many multiples of that.
In my early 20s I was making $25,000 a year and had almost $1M in debt. She wasn’t there when my houses dropped in value 50% in 2008. Most of the hard work financially was done before we went on our first.
Plus for her, the numbers and the plan may have seemed abstract, almost unreal. She isn’t someone that ever dreamed about having a comma in her account, let alone two commas. It’s one of the things I loved (and love) about her. She was frugal too, but for her it was out of necessity.
Transitioning into early retirement was an adjustment, particularly for her. The lack of a structured workday, the freedom to choose how she spent her time. While I loved the flexibility, she grappled with finding her footing in this new reality.
This isn’t something unique about her. Retired people of any age run into these challenges. I am the anomaly. I am uncomfortable in structure. But most people need it.
I wish I had prepared her better for this significant life change. Open conversations about what early retirement would look like on a daily basis might have eased the transition. Discussing expectations, potential challenges, and shared goals could have provided a roadmap for navigating this uncharted territory together.
Retiring early isn’t just a financial decision; it’s a lifestyle shift that affects the entire family. Ensuring that everyone is on the same page can make the journey smoother and more rewarding.
This is an area I really messed up. I made her life very hard but doing what I thought would make it easier. But it was my dream, not hers.
We should have talked more about it.
5) I Would Not Have Partnered With Friends (Early On)
Throughout my entrepreneurial endeavors, I made several attempts to collaborate with friends. On paper, it seemed ideal. I knew my math checked out and that I had a good plan. I partnered with friends several times.
A few times I tried to flip houses with a few different people. I used my brother as a real estate agent once (I was his first deal).
I had a friend work on three different flips I was doing at one point.
In practice, it often led to strained relationships and unmet expectations.
My goals were always to make them a lot of money. But sometimes it seemed too good to be true for them so it backfired. They didn’t trust me because the numbers seemed too good. I had several sophisticated payout deals that I tried with a few of them.
I didn’t realize that I was on a different level of nerdiness than they were. It was intuitive to me and they would make a lot of money. But they just saw to many if, then statements.
My relationships would have been better had I stuck with simpler arrangements instead of complicated profit sharing bonuses (on top of normal payments).
Working with friends blurred the lines between professional and personal boundaries. Disagreements over business decisions spilled into our personal interactions. When challenges arose, as they inevitably do in any venture, it became difficult to address them objectively without impacting the friendship.
If I could offer advice to my younger self, it would be to carefully consider the implications of mixing friendship and business. While there are success stories out there, my experiences taught me that preserving the friendship often means keeping it separate from professional pursuits.
Setting clear boundaries and expectations is essential, but sometimes, it’s better to seek partnerships outside of your social circle.
6) Choosing an LLC Over Sole Proprietorship
I operated as a sole proprietor. I should have formed a Limited Liability Company. When I bought my first house I was in my early 20s and didn’t know any better. A few years later I realized I should have been an LLC. But I never did anything about it. I just accepted the risk.
An LLC provides a layer of protection by separating personal assets from business liabilities. If a legal issue arose with a property or tenant, my personal assets could have been at risk under a sole proprietorship. An LLC also offers potential tax benefits and can enhance credibility with lenders and clients.
Switching to an LLC structure later on was more complicated than if I had started that way. It required restructuring assets and revisiting contracts. Had I established an LLC from the beginning, I could have avoided these hurdles and better safeguarded my personal finances.
The lesson here is to consult with legal and financial professionals early in your business journey. Understanding the implications of different business structures can save time, money, and stress in the long run.
Related: How To Deal With Getting Sued As A Landlord
7) The Importance of Understanding Depreciation Recapture
Ah, depreciation recapture. This is something the fake gurus never tell you. Why don’t they tell you, because they don’t know about it. Instead they make it sound like real estate is tax free. It isn’t. Taxes come due.
As a real estate investor, I was well-versed in the benefits of depreciation. What I didn’t fully grasp until later was the concept of depreciation recapture.
When you sell a property, the IRS requires you to “recapture” the depreciation you’ve claimed over the years, taxing it at a different rate than capital gains. This can lead to a significant tax bill if not properly planned for.
By the time I was ready to sell I understood depreciation recapture. Several different years I ended up writing very large checks to the IRS.
While learning about depreciation recapture didn’t change my overall strategy it would have been helpful to understand this aspect sooner.
Knowing about potential tax implications allows for better financial planning, ensuring that you’re not caught off guard when it’s time to sell.
For what it’s worth, I understand there are strategies to kick this can down the curb, but I preferred the liquidity.
Related: Understanding Rental Property Depreciation Recapture: I’ve Paid It A Few Times
8) Finding a Great Contractor: The Unsung Hero of My Success
One of the most critical elements of my success in real estate was finding a reliable, skilled contractor. After years of cycling through various professionals, I finally connected with a handyman who was exceptional in every way.
He treated me like family, always looking out for my best interests and providing cost-effective solutions without compromising quality. His ability to communicate efficiently was a game-changer.
At a time when texting and electronic payments were not the norm, he embraced these technologies, which was invaluable given my full-time job. Tenants trusted him, which made property management smoother and less stressful.
(Side note, tenants not trusting landlords or handyman is a big deal. Think about it, tenants are allowing people into their homes that they do not know. One of the best ways to be a good landlord is to respect tenants)
I often think about how much more efficient, or larger, my operations could have been if I’d had three of him. I tried to encourage him to mentor others, to expand his reach and help more people the way he helped me, but he was content with his role.
The takeaway is the immense value of building strong partnerships. Investing time in finding and nurturing relationships with trustworthy professionals can make all the difference in managing a successful business.
Related: What To Do When Tenant Destroys Rental Property
9) I Would Not Have Worried About Health Insurance Costs
One of the concerns that lingered as I contemplated early retirement was health insurance. I’d heard countless stories about the exorbitant costs and the challenges of securing quality coverage independently.
But these concerns were always from the fake gurus who hadn’t retired young. They don’t know what it’s like because they haven’t done it!
With a growing family I was apprehensive about leaving the security of employer-sponsored insurance. It’s the one thing I didn’t know how to model for in all my complicated spreadsheets.
To my relief, the reality was far better than I expected. Through the Healthcare Marketplace, we were able to find insurance plans that matched the quality of my previous coverage at large financial services companies.
Thanks to tax credits and a lower income, our premiums were affordable, and the coverage met our family’s needs. Our health care quality and expenses in retirement were actually comparable, and in some years better, than what I had when I worked at two of the largest financial services companies.
This experience taught me not to let fear of the unknown hold me back. By researching options and understanding the resources available, I found a solution that alleviated a major concern. It’s a reminder that challenges often have manageable solutions if we’re willing to seek them out.
Embracing the Journey: Reflections on Financial Independence and Personal Growth
As the run with Professor Peter came to an end, a profound realization settled in. The journey to financial independence is not merely a series of calculated financial moves or strategic investments.
It’s a mosaic of experiences, relationships, and personal growth. Every choice I made, both the prudent decisions and the missteps, contributed to the person I am today.
Reflecting on what I might have done differently isn’t about harboring regrets. It’s about acknowledging that each lesson learned along the way enriched my understanding of not just finances, but life itself.
I came to appreciate that not everyone shares the same dreams, and that’s okay. Open communication, especially with loved ones, is essential in aligning expectations and navigating the complexities that come with significant life changes like early retirement.
If there’s one overarching insight from my reflections, it’s this: Financial independence is as much about personal fulfillment and meaningful connections as it is about monetary wealth.
It’s about embracing the journey with all its twists and turns, and understanding that the true value lies not just in the destination, but in how we grow and who we become along the way.
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