During our Holiday in Belgium, we had a fair number of discussions about what we want to do in the coming years. As mentioned before, we differ greatly in the way we think about the future. A compromise is essential for us. The time during the holiday in April was a great way to work out some of our ideas into a plan: The 5-year plan!
The 5-year plan
Mrs. CF loves her Job, Mr. CF……. not so much. The plan going forward includes Mr. CF quitting his day-time job by the end of 2017.
The idea for Mr. CF is to start to hustle a bit (besides running the household and preparing for a Olympic distance triathlon in 2018). I’m really looking forward to do things I actually like doing! Lost my passion for the “normal” work already too long ago.
Activities that are being considered include:
- Start to coaching and organize workshops on how to become financialy stable, financially independent and/or retire early;
- Up the blogging with more case-study posts regarding real estate, B&B’s, starting a franchise, etc. I simply don’t have enough time to write more content posts at the moment, which I’m not happy with; and,
- Dog walking. Our current house does not really allow for a dog or dogs. Dog walking is a perfect combo, playing with dogs, bit of exercise, no expenses and potentially even making money on the side. A clear win-win if you’d ask me!
Mrs. CF will continue to work, but likely reduces to part-time work (32 hours) as of 2018 or 2019. This depends a bit on how her team is doing. She’s training several people and it they do well, she should have the time to work less.
On the investment front there will be a couple (small) changes. Primarily driven by our investment preferences (cash-flow heavy portfolio) and available time. That being said, if an opportunity presents itself, we might deviate from the below:
- Phase out of crowdfunding. This investment style is not for us. Albeit we like the cash-flow of the investment, the yield only has downward potential (to the point of negative yield!). This due to the risk of defaults in projects, which are not uncommon as many people have no idea how to properly run (or grow) a business. In about 4 years all (still successful) projects should have been completed and the account will be closed;
- Keep investing in dividend growth stock and expand the portfolio to about 60-75 different companies (currently at about 45);
- Increase the rental units from 5 now to 7-8 in the future. As we don’t know how the real estate market will develop, we either have to renovate and increase the units within our current property. Or alternatively, we have to sell two of our existing properties and buy a larger building with more 3 or more units. Time will tell which option it is going to be (perhaps even both!);
- Index funds are probably one of the best and easiest investment methods out there, but they are boring! I don’t like boring, but I probably should. Unfortunately is not in my nature. We therefore might sell the index funds and use to increase our dividend stock holdings and/or real estate holdings. However, for now we will continue with this investment method as it is a good diversification of our portfolio and it is easy to liquidate too; and,
- Options trading/day trading. I would like to expand this a bit more, perhaps up to about 10% of our investment portfolio. Why would we do this? Because it is fun and can be lucrative too! It might also be a way to generate some additional income to offset the loss of income from the day-time job.
Just to be clear, as long as Mrs. CF is still working we don’t mind a more active approach to investing. But once she’s also leaving the company when we are fully FI, the passive in “passive income” is going to become more critical.
The key here is to find a balance between cash-flow, passive, fun and yield. What that exact balance will be is subject to the stage in our lives and the time we have available. Our portfolio will therefore be re-balanced a few more times, but the key components will remain real estate and dividend growth stocks.
We bought our last house with a different approach than most people do. When we bought our current house we were not looking for our “dream home”. We were looking for an investment opportunity, and we found it! The plan is to move out in about 4-10 years (depends a bit on Miss CF and how our family is doing health wise) and redevelop the building to house 5-6 units (currently it has 4, including the main one we are using).
The plan is to move out of the region and move closer to where lots of our family is living. We are keeping our eyes open for a small house (75-100m2 / 800-1100sft) with a large yard (ideally 2.000m2 or more) to be able to generate our own food and potentially sell some on the side too. Now this is going to be a struggle as finding such specific properties in the western part of the Netherlands is hard. It’s the plot size that makes it difficult to find/affordable.
For 2018 we are planning a 9 week road trip through Europe (southern Europe to be exact). The timing will be around April-June. Main reason is the costs (not peak season yet), weather (not too hot), and our daughter does not have to go to school mandatorily yet (starts at age 5 here in the Netherlands).
However, we are also considering an around the world trip. But with only 9 weeks of available time this might be a bit too ambitious. It certainly is possible, but we actually want to also enjoy our time and limit the amount of jetlag/”travel” time.
Another thing to consider is obviously cost. But this would be a “once in a life time” trip so spending some money on this is not a big problem.
A tentative itinerary could be something like this: Dubai, Singapore, Australia, New Zealand, Hawaii, USA, Canada, Iceland. Most of our time would be spend in Australia and New Zealand.
In the near term we will do another holiday in September of this year, it will be something similar to our trip to Belgium (read: cheap, fun, close-by).
That being said, with the recent story on free castles in Italy, we might need to do a holiday there to do some research 🙂
From 2019 and onwards we are planning to have about 2 trips per year, primarily focusing on Europe. Once Miss CF gets a bit older and is able to really enjoy and remember the travels, we might expand our travels a bit further.
What about FIRE?
Well, this is really simple, we will still FIRE at some point but likely not in the timeframe we were initially envisaging (around 2023-2025). When our income drops substantially, the amount available to invest will also drop. It’s only to be seen how much can be offset with hustling by Mr. CF. it’s likely nowhere near the amount I’m earning now.
But that is fine, we rather both enjoy what we do on a day to day basis, then make the sprint to FI. Especially because I’ve been going work for years that I don’t really get any satisfaction out of. I really don’t what to continue this for another 5+ years!
That being said, you could also consider this as partial FI. As we do already have sufficient assets to offset more than 60% of what we spend (and plan to spend once FI). In line with this recent post by the financial freedom sloth, working part-time in combination with a stash is also a good way to enjoy more time now. Another benefit is the social interaction at work and perhaps even some fun experiences from less conventional/seasonal type work.
Do you ever think about your future? Do you have a “5-year plan”? What do you think about our musings?