How To Become Financially Free In 10 Years Or Less

My wife and I are on the brink of becoming financially free. It will have taken us, more or less, about ten years.

That may seem like a long time to you. Or it may seem like not THAT long.

The reality is, I’m certain that had we had a plan from the get-go we could have achieved financial freedom much quicker. 

But we really didn’t know how to become financially free some 10 years ago.

There was no formula, no how-to guide, and we didn’t know anyone that had done it at a young age.

That’s what I’m hoping to provide you today with this post.

I’m going to tell you exactly how my wife and I have set ourselves up for financial freedom. And my hope is it helps you do the same.

Our journey is unique, and I’m not suggesting you follow it exactly. But I’ll also simplify each phase into things that are actionable for you. 

I’ll also tell you what we could have done differently to speed along the process.

Financial Freedom Step #1: Create A Pile Of Money

Easier said than done, right? Who doesn’t want to create a pile of money?!

But I’m dead serious, and this is a key element a lot of people overlook when starting their financial freedom journey. 

Yes, you can get there in 30 years by slowly investing over time. But we want to accelerate that timeline. 

So how can you potentially achieve outsized returns in a shorter timeframe?

Purchase A Home In A High Appreciation Market

In 2013 my wife purchased a townhome in Walnut Creek. We had been living in San Francisco for years, and my wife was a diligent saver. 

She just barely had the $120,000 necessary for a 20% downpayment.

Here’s the modest townhome that started it all for us.

We ended up selling it in 2017 for $765,000 which means we walked away with about $285,000 ($165,000 tax free gains plus the $120,000 she initially put down).

I actually believe we did this all wrong. We should have put as little as possible down on a home using an FHA loan. 

For example, our neighbors had purchased their townhome with just 5% down. 

They sold for a bit less right at the same time we were selling. But they turned their ~$30,000 down payment into probably $150,000 total when they sold.

That’s a 400% return in just a handful of years!

The point here is you can absolutely turn a small amount of money into a much larger pile if you buy right and make sure you’re buying in a market that’s historically appreciation based.

Then it’s on to the next step.

How To Become Financially Free Step #2: Tap Into That Equity

My wife and I tapped into the equity we gained by selling our townhome. We didn’t really know it was an option at the time, but we could have accessed much of that equity with a HELOC.

Eventually, with our new home in Michigan, we did exactly that. Our HELOC was one of our most valuable tools when it came to investing in Detroit real estate.

But if you go this route, please understand the right way to use a HELOC to buy investment property.

Whether you decide to sell, refinance, or leverage a HELOC, the key is to use that newly created equity to move toward becoming financially free.

These are broad strokes, and this part takes a lot of thought and consideration. The reality is, once you’ve created the equity you’ll have a lot more options.

Step #3 To Becoming Financially Free: Invest In Cash Flowing Assets

You now have a pile of cash to work with. And it’s time to start investing in assets that will produce cash flow for you.

Because, ultimately, that’s how to become financially free!

For my wife and me, at this point it’s 2017 and we uprooted our lives and relocated to Metro Detroit. We had every intention of staying there forever, so we purchased a 3,100 sq. ft. home for $460,000. 

We then spent about 18 months renovating the home, expecting it to be our “forever”. And this is the point, about mid-2018, that I really started feeling the financial freedom itch.

I started driving myself crazy trying to figure out how to get us there.

Dividend Investing Wasn’t Going To Work

My first instinct was to look at dividend stocks to work us toward financial freedom. I have a strong background in finance and am very comfortable with the stock market. 

So this made sense… until I started doing the math.

If I was going to be smart about it, I knew I could target a dividend yield of about 4% per year. That means, even if I could invest our $285,000 cash pile I’d only be generating about $11,400 in the first year.

That’s less than $1,000 per month! 

And yes, the dividend rates will likely go up each year and I could save and invest more, but it would be a LONG grind.

The other issue was we really didn’t have much cash on hand any longer. We, once again, put 20% down on our new home. And then we spent nearly six-figures renovating it.

So I knew we needed to do something different.

Doing BRRRR’s With Detroit Real Estate

Real estate became my answer. 

And, to make a long story short, I figured out that the Detroit real estate market was the only one that made sense for our goals.

Even this process was one I had to iterate on. I knew the key here was going to be to recycle my capital as much as possible.

We had about $50,000 in savings and we pulled a $130,000 HELOC. I started by purchasing MLS deals that were tenant occupied. 

My thesis was that if I could lowball these properties with cash offers, I might just be able to get them for below market value. If so, I could refinance out and get most of my capital back.

While the overall plan was working, the BRRRR aspect was not. To solve it, I quickly shifted my focus to locating off-market deals where I could do some light cosmetic improvements to force some appreciation.

It started working and we were able to build a 12-door rental portfolio that generates more than $16,000/mo in gross rents!

This took us about 2.5 years of pretty intense work, trial and error, failures, and many tears. But we made it!

And we could have stopped there and lived a very comfortable life in Metro Detroit. 

While we heavily debated doing this, we decided to move back to California which delayed our financial freedom goal. 

We’re now nearing the completion of an ADU build that will get us over the line.

How To Become Financially Free By Replicating My Journey

My success toward reaching financial freedom heavily hinged on two components: creating my pile of money and then investing that money into Detroit real estate via the BRRRR method.

There are lots of ways to create a pile of money, and you may already have it.

But replicating the BRRRR method is much more difficult. 

My advice would be to search your local market, or even up to 2-3 hours outside your area. If you can be hands on, there’s nothing better. 

The problem many folks have is they just don’t have a lower price point market near them. Or they don’t have the bandwidth to do it themselves.

The other option is to work with a team like mine. We help out-of-state investors do BRRRR’s in Detroit. We do it all day, every day, and make it far easier to replicate the exact same thing I did for myself.