There is a lot of talk about what you need to retire. I remember when I was first starting out; my lucky number was $1.2 million.

At first, everything seemed to look as though this was going to be a very achievable goal.

As time went on and the fact that I didn’t do any other research, this goal seemed to get farther away the closer I neared my retirement date.

Well, there is good news. I’ve written about this before, but I decided to take a different approach.

First, many folks I talk with fight with me over my new way of achieving retirement. They say it’s just not possible.

“All things are possible, if you put your mind to it”, I say. I am usually laughed at.

I used to go out and find as much information to prove my theory true, but after meeting my mentor I have a new approach.

It’s a simple one that I will steal from him, but I know he won’t mind.

Instead of proving my theory with facts that most won’t take the time to read, I am just going to go do it my way and prove my theory and post my results.

How I started

Every quest has to have some kind of plan. So I am sharing this plan with you along with my figures so you can see how I achieve this goal.

There is no doubt I will achieve this goal because I am following an already proven blueprint.

The 401k that I always talk about is a proven blueprint. There are 72,000 Americans that have achieved the $1million mark.

I just don’t like the odds and there are several factors that are beyond my control.

Okay, now that I rambled, here are the steps:

1. Get out of debt – I mean complete debt. My wife and I have tackled the biggest debt most have and that’s a mortgage, but we still have two car payments, a home equity loan and some credit cards.
2. Save 10/35/50% of our income – I know those numbers look weird, so allow me to explain:
   1. 10% is an easy goal, one most people can do right now
   2. 35% is a bit harder, but within reach
   3. 50% is extreme and not as likely, but when it is in front of you, your focus is laser sharp

(Note: I’ll explain this goal setting later)

3. Create a variety of investing vehicles that generate monthly cashflow – Although this is third on the list, it is a must. However, you can’t entertain this step if you haven’t taken care of 1 and 2. So, we’ll get to this a bit later.
4. Create an exit plan – This is a nice way of communicating my plan if I or my wife were to die. It may sound as if I am fooling here with the name, but I wanted to keep it light while taking it seriously. I’ll share the plan we are currently creating to prepare for the unlikely.
5. Setting the plan on cruise control – No income stream is ever really passive. My mentor likes to call it, “low maintenance passive income”.

Step 1 – Get Out of Debt

This has to be your first step. You can’t focus on anything else (literally, I’ve tried) until you take care of this issue.

It won’t be easy. It takes a huge mind shift and you are going to find a variety of ways to do this. We aren’t doing this on our own as there is a fantastic team behind every great success.

The choice is whether you will need to pay for a service or not. Here is a link to help you get started:

Debt Snowball Plan

This site has a ton of free, very useful information, but you can get more. Just remember that if you are going to pay for anything, it can’t be on a credit card. (Seems obvious, but you never know)

This step may take more than a couple of months, but you don’t have to complete it to move onto step 2. You must complete this step to move onto step 3.

Here is the best part of this step, once you master it and remove debt from your life, you’re retirement income will be based on your wants and not your needs.

You can get an idea of what this number is by dividing all your expenses into to two simple categories:

1. Utilities – This is for all expenses you can’t live without. (For those younger than I, this is not where you put your Cell phone bill).
2. Consumables – This is for all the expenses you like having (This is where your cell phone bill goes).

On a side note, you decide whether your mortgage goes in the Utilities or not. My suggestion is you split it to reflect what your expense would be to live in an apartment big enough for your family.

By the way, getting out of debt is going to require a budget. Yep, I said it, but this is where you need to change the way you think.

The term budget has a nasty thought associated with it just like diet has a nasty association that you won’t be able to enjoy what you want.

The reality is that a budget is something you already do, just like a diet is something you already do.

You just need to take the actions of saving and spending money and keep track. You can start anyway you want.

You can be very technical and track every penny, or you can just create a very simplistic budget that highlights the big important points.

Here is a great blog that can answer a lot of your questions: AffordAnything.com

Step 2 – Saving

Now that Step 1 delayed your life for a good two pages, here is the explanation of step 2.

First, you don’t need to get rid of all your debt in order for you to start this step. If you have already begun with the Debt Snowball Plan, then you should have some money that you are going to set aside for savings.

The reason for the three different categories is simple. It’s a strategy my mentor taught me when setting goals. (Although I haven’t mastered it yet!)

You may not be in a position to save 10% of your income right now, but that’s ok. Start by picking a date. Plan carefully as you don’t want to break this date by a year.

Several books on the subject suggest that your goals have to be achievable in order for you to stay committed to them. I agree with one caveat.

You need to start stretching yourself to achieve more than just your goals. That’s the reason for the three saving percentages.

Ultimately, I want to be able to live off of 50% of my income, while saving the other 50% for investment vehicles that will derive more income.

Chances are, I won’t hit that goal initially, but if my only goal was to save 10%, I would never hit the goal of saving 35%.

Your mind is your most powerful asset. If you set it on a course with conviction, you will reach your destination.

Not without fail. You may not reach at first but if you keep trying until you do, you will never fail.

Now, if none of that made sense, just keep it simple and put something achievable down. Once you reach it, reset it with a new number.

Step 3 – Create Cashflow

So, this is the step you can’t venture on until you have mastered Step 1 and you are on your way with Step 2.

In this step, you are going to create cashflow with the income you currently make.

I will give you a few different places to start right now, but this is going to be a journey we take together. I have already started this journey, but I did it without mastering Step 1 and it is distracting.

As a matter of fact, it limits my ability to take advantage of opportunities which wreaks havoc with your psyche.

There is nothing like finding a great investment only to find you can’t afford to invest. They are called missed opportunities in investing and although there are always opportunities, it has a negative effect on you.

However, I am going to give you the option to learn by wisdom or experience in this case.

The reality is there isn’t much I can do if you choose to do it your way from the beginning.

Here is the list: (It’s short for a reason)

• Learn-Stock-Options-Trading
• Flip2Freedom Academy

Okay, venture number 1 is to increase your financial education through options trading.

Many of you that have read my blogs knows this is something I do. I am going to give you a glimpse into what I do with the profits I receive as well as let you see how well I’m doing month to month.

Here is a link for you to get started if you want to start this venture: Learn-Stock-Options-Trading

There will be one of two programs that will get you started. In all transparency, I am a moderator and co-host for Travis in the Success Academy.

But, as I like to say, trust, but verify. That’s why I like to plug Travis’ course. Not only because I know it works, but also because Travis gives you a 60 day money back no questions asked guarantee.

On top of that, if you aren’t able to make money with his program, he will personally coach you and all the material on the site can be downloaded. I challenge you to find a better program.

The next venture is the Flip2Freedom Academy. Here you will learn everything you need to know about real estate investing, from wholesaling to HUD properties.

I am currently a member, but I haven’t really started because I have been mastering my options trading.

My list is short for a reason. The first is I don’t plug any program I am not involved in or haven’t tried. I can’t bring myself to marketing a product I don’t believe in and I can’t believe in it until I have verified it.

Second is because this is all I have done at the present moment. I am a member of several blogs and websites that deal with everything from personal finance to real estate investing.

The other important point I would like to instill upon you is this:

“One mentor/program for one year”

I quoted this from my mentor and it is paying dividends. I actually modified it to this, “One mentor/program until you are successful”.

I truly believe that most people fail, present company included, because we never devote the proper energy and time into a new program.

Sure, once we start we go out like gang busters devouring as much information as we can. Unfortunately, if we don’t see any results in the first 60-90 days, we move on.

What I have found is that like all businesses and ventures worthy of great success, there is a very time consuming difficult journey you have to undertake.

You are going to hit several detours and road blocks, but if you truly want what’s at the end, you have to learn to continue the journey until you have reached the end.

When you try to commit to too many ventures at the same time, you will become overwhelmed and often you won’t ever see results.

Don’t throw in the towel, ever. You can always adjust and tweak the system, but you have to maintain your course. If you follow these programs to the letter, you will have success.

Step 4 – The Exit Plan

What if I were to die tomorrow? I know it sounds grim, but I also know that my wife won’t get behind the computer and continue this blog or be able to trade options.

Therefore, I have to have an exit plan. And it is never too early to start.

I want to know that if I go, my wife will have a plan that I created based on my knowledge and not just the knowledge of someone that has some extra letter at the end of their name.

I also don’t want the government to get their grubby little hands in our cookie jar. Sorry, but they don’t know how to share and they only leave crumbs behind.

Therefore, I am currently working on two exit plans. One that involves an investment advisor and one that puts our money in a safe position while still earning very good returns.

I can’t give you any advice here because the law doesn’t allow it. But, there isn’t anything that says I can’t tell you what I’m doing.

This plan will be laid out more in the future as I am still assembling it, but there is no reason why you can’t start your own if you haven’t already.

Here are some things to think about:

• Life Insurance – No two plans are created equal which is why I have Term Life Insurance. Not sure where to start, try here Term vs. Cash Value
• Investment account – I have a TD Ameritrade account for my options trading and this is who I’m working with to develop an investment plan aside from what I am already doing.
• Estate Planning – More to come on this as I haven’t begun this stage of my plan. Feel free to do some research and share if you want.
• Money Smart Kids – The best way to take care of your kids is to show them what you learned. Teach them the methods that work and keep them away from the methods that don’t, like credit cards.
• Have a Will – This is the part you have to get professional help and should not go it alone. Consult an attorney to prepare a Will.
• Power of Attorney – My wife and I have always had this document. Because we are in the Military, it was a must have document for when we deployed. Again, seek the consultation of an attorney to tackle this.

Setting Cruise Control

I put this step in there just as a teaser. It’s really not practical to do this.

Your plan is going to evolve as you and your family does. Things will crop up that you couldn’t have anticipated.

However, once you have your system in place, it only takes you making slight adjustments to keep it flowing nicely. Just like cruise control in your car on the highway.

Most refer to this as Passive Income, but I like my mentor’s description better. “Low maintenance passive income”.

This step is going to come naturally in a sense because along your journey you’re going to instill habits that will be hard to break.

For instance, if you have never had a savings account, once you have a few thousand in there, you won’t want to spend it on just anything.

And once you reach $10k or $100k, everything changes. You will find yourself spending portions of that money on investments while preserving the rest in cash.

This is when your plan is going to take you to the next level meaning you will most likely start leaving the asset class you are in and enter a new one.

Just understand that this isn’t going to happen in a year or two, or maybe even 5 years. But imagine if it did take you 10 years to change asset classes.

Would it be worth it? As long as you went up it would. And that is what this plan will guide you to.

In the beginning you learn how to manage and keep the money you make.

You then transition to making your money work for you.

Eventually you get to the point where your income generated by your assets far exceeds your working income. And the fact that you have no debt you will be truly financially free.

So the time to start is right now. Begin Step 1 by downloading the Excel Spreadsheet, sitting down with your significant other (if you don’t have one, you can pretend, it’s ok) and determine where your money is going and start paying off that debt.