Now that we’ve targeted an early retirement date, we need to come up with a way to replace my salary and cover expenses. Lucky for me, Mrs. DTG still has several years left on her military service commitment and her salary is more than enough for us to live off of, especially once we eliminate my cost of working. I have a great idea, she could be my sugar momma! Sounds like my work here is done; time to play golf and sip margaritas on the beach, right?
Eh, maybe not. That would be kind of jacked up. Plus, she’d like to retire soon, too. Instead, I’ll need a side hustle along with a few passive, self-sustaining income streams to cover our expenses.
Thankfully, I already have a part-time gig as a military reservist. This job offers amazing flexibility as I am not constrained by the traditional weekend warrior schedule of one weekend a month, two weeks a year. My position allows me to come in whenever I choose in coordination with my unit’s needs. I can even pick up additional days if I’m interested. I enjoy serving our country and being a reservist fits my personality much better than active duty which is much more rigid.
Next, we’d like to be able to make money by doing little, if any, work. Fortunately, aided by our frugal ways and above average salaries, we’ve accumulated a substantial stockpile of investments over our relatively short time in the workforce. Because of this, we have an army of several hundred thousand employees working for us around the clock. These little soldiers are currently being deployed to accomplish specific tasks aimed at providing a steady source of income while building overall wealth. Over the next couple years, I’ll optimize their allocations, reassigning them to duties better aligned with our early retirement goals.
Finally, as I’ve mentioned before, we have two rental properties that provide a small monthly cash flow. As the mortgages are paid down, they will become more profitable barring any major expenses. Eventually, I’d like to sell one or both of these properties to purchase our long term home outright.
Below is a summary of our current alternative income streams. Starting today, I’ll provide monthly updates to show our progress. Since all of these income sources are fairly irregular, I’ll also provide a monthly average for the year.
Over time, I’d like to see our reliance on capital gains decrease as I move away from active trading and into more of a buy and hold dividend growth strategy. Capital gains are obviously very dependent on market conditions and may not be a reliable income source during a prolonged early retirement. I’ll still keep a decent amount set aside for trading because I enjoy researching stocks and trying to beat the market. I also want to have cash on hand for times when the market becomes irrational and puts great companies on sale!
Additionally, we currently have $56,000 loaned out to a real estate investor who purchases distressed homes to renovate and then sell for profit – a house flipper. I have known this person for nearly 20 years and we began working with him in February 2013. We have completed three projects with this investor for an overall profit of $17,371. Ideally, I’d like to get to the point where we are making around $12,000 a year from this arrangement.
We are constantly looking for new investment opportunities. We’ve worked hard to build our savings, now it’s time to let that money work hard for us. If we maintain our current pace throughout the remainder of the year, we’ll make a little over $43,000 through means other than primary employment. Not too shabby. I’m hoping to grow this number closer to $60,000 leading up to early retirement or, what the bloggers at Slowly Sipping Coffee dubbed, a fully funded lifestyle change.