Happy Cash Flow Retirement 12: The Four Steps to Becoming Free

I write this article as a free man; I will never have to go to work again. However, the circumstances were quite different when I wrote “Happy Cash Flow Retirement (part 1)” in April 2021.

I didn’t retire at age 42 because I was smart or worked hard. I didn’t retire early because I completed 24 years in the US Marine Corps (although the pension is nice).

I retired early because I followed these four steps: 1) Happy, 2) Cash, 3) Flow and 4) Retirement. Those steps helped me understand how to make more money in retirement than when I was working.

1. Happy Cash Flow Retirement – April 5, 2021
2. Happy Cash Flow Retirement 2 – August 23, 2021
3. Happy Cash Flow Retirement 6 – February 4, 2022
4. Happy Cash Flow Retirement 7 – April 15, 2022
5. Happy Cash Flow Retirement 8 – September 6, 2022
6. Happy Cash Flow Retirement 9 – February 10, 2023
7. Happy Cash Flow Retirement 10 – January 27, 2023
8. Happy Cash Flow Retirement 11 – February 27, 2024

I learned about these steps by reading Robert Kiyosaki’s books. He is my favorite author of all time, as well as my mentor and kindred spirit. By the way, I have never met or talked to Robert Kiyosaki.

Time is Money #1: Debt

Today, I will review these four steps so that you can begin taking massive action toward your own retirement. Even if you want to work forever, now is not the time to depend on a job or employer. It’s time to become self-sufficient and financially independent. Let’s begin.

1) Happy. The first step is finding your future happiness. Who do you want to be around when you have all the time in the world? Where do you want to be? What is your dream retirement?

You can’t plan a retirement without a vision of how retirement looks. I laid out my dream almost five years ago.

I want to be on the white sand beaches of Pensacola, Florida, with my parents, wife, kids, and grandkids around me. I don’t want anyone to have to work, but I want passive income to arrive in our bank accounts as we sit on the beach.

My dream came true. We retired to Pensacola and live about 15 minutes from the white-sand beaches. We own two homes here. We don’t have grandkids yet, but hopefully, soon. In the meantime, we continue to generate passive income to invest in their future.

Choose Between $100,000 Active Income and $50,000 Passive Income

Without this vision, I would still be grinding away in the workforce. My dream allowed me to perform difficult tasks today, which paid off tomorrow.

One of those difficult decisions was going to Japan and California unaccompanied from August 2020 to August 2023. Yes, that’s three years.

Those were some terrible years, but we survived. However, our goal was to pay off all debt and create a massive investment account. We did those things, which allowed us to retire early, along with my military pension.

While I sat in my room in Okinawa, Japan, during COVID-19, all I could think about was my retirement dreams. I knew the pain would stop eventually, and I would have everything I wanted. I couldn’t be happier now, and I am proud we made those sacrifices to achieve our dreams.

Series “I” Bonds vs. Index Funds

2) Cash. We all need cash; that’s a no-brainer. But how do you create cash if you don’t work? Well, that is the greatest question of all. 

A Happy Cash Flow Retirement aims to have multiple streams of passive income arriving in your bank accounts without trading your time.

For example, as I sat down to write this, I received $22 in dividends from Abbvie (ABBV). I bought those shares about five years ago, and they continue to pay me.

You can create as many streams of passive income as you want. Even better, the more income you have, the more you can create. 

Here’s an overview of my income streams: military pension ($9,100), dividends ($2,400), book royalties ($300), rental homes ($700), rental room ($1,000), and GI Bill ($1,800). 

Give Your Kids a Different Path

My calculator tells me that’s $15,300 a month without going to a job site. As long as I stay on budget, I can continue this indefinitely.

However, many people cannot live on $15,000, and that’s okay. However, the more money you require to live, the more money you require to retire.

If you can live on $6,000/month, you’ll need $720,000 invested at 10%. If you require $20,000/month, you’ll need $2.4 million.

A good exercise is to read about how much current retirees live on today. Most retirees are overjoyed to have $5,000/month of passive income.

It’s easy to inflate the idea of retirement to a considerable number, like $20,000, but the reality is that you can aim for far less. You can always live on $6,000, but bring in $20,000. 

Quiet Quitting vs. Loud Rehiring

3) Flow. The difference between income and expenses is called cash flow. You want to have a large amount of cash flow, even in retirement.

Although we earn $15,000/month in passive income, our budget is roughly $6,000. After investing a large portion, we use the rest to entertain ourselves.

Your budget is the most crucial part of your retirement planning. Without a hard-core budget, you will be up a creek without a paddle.

My wife and I started living on $6,000/month long before we retired. In 2020, we began cutting expenses and extras. 

Therefore, when I calculated my military pension to be $9,000, I knew we could both stop working. The best time to test your retirement budget is when you are working.

The Golden Handcuffs of Lifestyle Inflation 2

4.) Retirement. What will you do in retirement? So many people approach me and say they can’t retire early. They wouldn’t know what to do with themselves.

Well, if dedicating their life to someone else’s dreams (employer) is their dream, I am not one to stop them. However, I have much better things to do.

I will homeschool my 14-year-old next year. I also write books and publish articles, attend college full-time, and walk with my wife and dog daily.

However, my favorite thing to do is “mind my business.” Robert Kiyosaki said that most people don’t mind their business; they spend their time thinking of other people’s business.

He means that people don’t tend to themselves, their paperwork, their homes, and their futures. To survive, you must focus on everything you love—not what your employer loves.

Save for the Children

For example, I just spent the year refreshing all of our passports, laminating our voter registration cards, maintaining our RV, and maximizing our taxes.

Do you need an employer to tell you how to spend your time? I spent 24 years having someone telling me what to do; now I can focus on my agenda.

Conclusion. Those are the four steps to freeing yourself from the workforce. What is the number one actionable step you can do today?

The Leveraged Millionaire

Pick a monthly retirement number and compare it to what you spend today. Can you live on that amount today if your number is $7,000/month?

If not, it’s time to take drastic action. You want to take steps BEFORE you retire. Remember, your job isn’t guaranteed.

These are scary times for employees, and I wouldn’t want to depend on a job. Luckily, there has never been a better time to generate passive income in our lifetimes.

It’s time to take advantage of the luxuries the internet provides us. Get a roommate, drive Uber, write books, start a podcast, or walk dogs for your neighbors. It’s time to prepare yourself for a Happy Cash Flow Retirement. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing