By Tracy Royce | Royce of Real Estate
The acronym FIRE stands for Financial Independence Retire Early, or as it’s been coined now at AZREIA, Financial Independence through Real Estate. The FIRE financial empowerment movement became popularized based on the fundamentals of high savings rate, frugality, investing, and passive income to fund an early retirement. Although the tenets of extreme frugality and actual “retirement” have evolved, the underlying theme is still the same: to buy back your time, have your choices not be dictated purely by a need for active income, and shift your mindset and relationship to money and work.
As real estate investors, most of us are in this business for one driving reason: Freedom. Freedom to break away from the rat race, not have our life and livelihood be obligated to a corporation’s schedules/whims, and have the option to spend our time in ways that align with our purpose and joy. For some of us, that still very much involves working (especially you deal junkies!), but in a capacity and rhythm that makes sense for you, your family, and your lifestyle.
So, what exactly does this have to do with Flipping to FIRE? When I branched off on my own after having worked for investors for years, I quickly learned it really wasn’t just about what you made but it’s about what you KEEP, how you use it, and paying just as much attention to your personal finance as you do your real estate business.
Think of it this way. I bet you can imagine all sorts of high-income earners like attorneys, doctors, and flashy investors who have little grasp on their expenses. Further, with the normalcy of carrying personal debt, skyrocketing inflation, slow growth in wages, a volatile market, and the cost of living only increasing, nearly everyone has had to evaluate their personal financial health over the last few years. Especially, as nothing motivates people to face their finances like uncertainty or a crisis. We as real estate investors have a distinct possibility though, that we can change our entire financial future in a fairly short amount of time with only a few good deals.
If you haven’t already, take the opportunity to write down or update your intention for your real estate business. The important drivers would be:
- What would be my normal monthly expenses in my ideal life?
- How much income do I need to have come in to fund that lifestyle?
- What can I create or invest in to support that happening as passively as possible?
- How can I best maximize my personal finances to achieve that in X amount of time?
Having once experienced financial struggles, including being broke, burdened by debt, and anticipating raises that never came, I eventually found the courage to seize control of my future and achieve FIRE. Through a blend of flipping rehabs and a dedicated focus on personal finance, I look forward to sharing how my simple principles and business methods can also empower you to build a life you truly love.