What will it take to become Fire

So what will it take to become FIRE (Financially Independent Retired Early)?

Ever thought what will it take to become fire? I have always dream of traveling the world and not worry about being broke. Although I have not achieved that goal yet I know with hard work I can make it a reality. I would never guess in a million years I would be working in Afghanistan, as I am writing this post and making good income. So I thought to myself, what will it take to become fire and what step should I take.

1) I can save my money in a saving accounts earning less than 1%, and let inflation eat up my purchasing power overtime.

2) Go with the attitude “YOLO” (You only live once), and just live life for today.

3) I can choose to move back with my mom and be a bum.

4) Try to apply for some social welfare program and just milk the money from the government.

These option may sound appealing to some people, but for me it’s not a good option. I would like to have the YOLO attitude someday, but it will not be anytime soon. The fact is that I do worry about my future and with inflation rising, It’s hard not to worry about the future. Action speak louder than word therefore I have come up with a plan to put in action and follow through.

Steps I have taken to pursue my goal of FIRE:

1) I am investing in low cost total market index funds that will provide me with diversification and quarterly distribution of dividends. By reinvesting my dividends and relying on the power of compounding, I am hoping this can provide me with sufficient income in the future. My intention is not to touch this portfolio until 15+ years.

2) Individual stocks – this is a risky bet, but since I still have a long time horizon before I retire, I believe I can take a risk and try some growth stocks. I am assuming that these companies can provide me with growth and appreciation. Even though they are small cap I would like to see them grow and eventually return some dividends.

3) P2p lending club – I am slowly contributing to this account and hoping this will grow and provide me with monthly income in the future. This does have risk of loans defaulting, but I think diversifying my portfolio with $25.00 notes will minimize my risk.

4) Rental houses – I currently own one rental house. The rental house provides me with at least $150+ monthly income cash flow. With the tax deduction, monthly cash flow, and appreciation, I am hoping to build enough equity to tap in the future or save for cash flow depends on the situation.

5) Taking an oversea job, and I have been working almost 3 years already, providing me with high income, oversea tax benefits, minimal expense, housing and meals coverage.

Future Plan

1) Add REIT index funds to my portfolio. These funds tend to invest in commercial and apartments buildings, this would provide me with diversification, and normally REIT has to share 90% of their profit to shareholders and distribute monthly income.

2) Focus on blog and try to generate some side income from this. As a new blogger I am still improving my skills and learning every day.

3) Add single family and multifamily homes to create a monthly cash flow passive portfolio.

4) Invest in dividend stocks for long term growth and let the power of compounding work by reinvesting dividends.

I believe in having multiple sources of income would provide me with a better diversification, that way I don’t have to rely on one income sources. I also feel more comfortable with having income from different sources.

What steps have you taken or plan on doing to become FIRE?

Hope to hear from your feedback and ideas.