Lean FI.How We Achieve “Lean FI” and How You Can… | By Nate Meharg | July 2022

How we achieve “Lean FI” and how do you do it!

Photo by dan garri on Unsplash

We finally achieved Lean FI. It’s crazy how we got here. I’m so glad we’ve finally been able to achieve this goal we’ve been working towards. We are making some plans for the future so that we can begin to reap the benefits of long-term hard work.

who are we?

If you’ve followed my blog for a while, you probably don’t necessarily know who I am and how I get paid. You may have gotten some bits and pieces, but I thought I could use this opportunity to explain where we are currently. As of this writing, I am a happily married man with 2.5 children. (2 kids under 5 and one on the way.) We are quintessentially Americans and we are a dual income family. We are in our 30s, and if we wanted to, we could quit our jobs today and be able to pay for the rest of our lives. We will have to make sacrifices to maintain our current quality of life. But it’s good to know that we survive because something happens to our job. We really want to be Fat FI. Our current lifestyle and quality of life are maintained by our investments alone.

Currently I have a job that I love. Even though we are Fat FI, I will still be working here in the near future. After gaining financial independence, I can switch to ministry and I don’t have to go through Lean FI to adjust my quality of life. I wrote below how real estate allowed me to do just that.

How real estate became my side business

If people make investing sound sexy, they want something from you, otherwise there’s more risk involved.

This is a good question. There are many practical step-by-step methods. You have seven baby steps from Ramsey Solutions, seven money gears from How to Money, a 4-step process from Rebel Finance, and even buying passive assets to cover your expenses, culminated in Roberty Kiyosaki’s “Rich Dad, Poor Dad” Dad” is the most popular. We’ve done all of this at some point during our financial journey. Many of these different methods have very similar steps with a few extra steps. But I will summarize the main points of gaining financial independence that these different approaches focus on. Financial independence can be summed up in three main points.

  1. Create a gap between your income and expenses
  2. Buy assets that will bring you income
  3. Track and measure

Honestly, the one you’ll stick with. Almost every financial step talks about a budget. As I’ve written before, Ramsey Solutions and YNAB may be the best options to help ensure you create a gap between income and expenses.

If you’re having trouble with credit card debt and know you can’t trust yourself, I would encourage you to use Ramsey Solutions’ Financial Peace and pair it with their budgeting app or YNAB. I would listen to their radio show or podcast.

If you think you can trust yourself

Credit card and want to be simple. I would read “I Will Teach You to be Rich” by Ramit Sethi and “Simple Path to Wealth” by JL Collins. I also shoot or consume Rebel Finance School videos and content. I listen to ChooseFI or How to Money. (I prefer how to make money)

Say you want to get into real estate and generate passive income that way. I would encourage you to consume content from a larger pocket or plug into your local REIA.

If you’re looking to build a side business or business, I would encourage you to check out Rebel Entrepreneur. They attend your events for free to help you start a debt-free business without a business plan.

I have done all these methods. The truth is we’ve been trying for a long time, but the knowledge gap took me a while to understand. Especially the investment part. When I was younger, I figured out what I needed for retirement but didn’t see how I would make it traditionally invested in mutual funds, which led me down the path of real estate investing. Knowledge gaps have narrowed over the years and I’ve learned #alotofways to achieve FI. I’ve learned that everyone has to choose something they can stick to, and it’s not one size fits all.

We started investing when we bought my first home in 2014 (late 20s). We used to put a little money in high-fee funds for “retirement” and we didn’t understand it. And it didn’t grow. It is now 2022 and we have officially achieved Lean FI. I met people on the same journey and arrived earlier than I thought.

Remember these three keys.

  1. Create a gap between your income and expenses
  2. Buy assets that will bring you income
  3. Track and measure

I’ve discovered on this journey that there are two solid ways to earn “passive” income that aren’t fancy and are time-tested. There are other ways of course, but these two have stood the test of time. Invest in the stock market (preferably through low-cost index funds) or invest in tangible real estate. Both can speed things up, but are generally slow schemes to get rich and not as sexy. If people make investing sound sexy, they want something from you, otherwise there’s more risk involved. I have done both and will continue to do.

While I’m not saying everyone should invest in real estate, buying a first home and seeing how it generates income has given me a sense of freedom that I can take control of what’s ahead as long as I’m willing to take diligent and consistent steps direction. We have achieved Lean FI and are continuing. I know it can be daunting if you haven’t already. But there are huge benefits from now on. Even just a Barista FI might be all you need to help change your quality of life right now. I just encourage you to get started.

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This article is for informational purposes only; it should not be considered health, financial or legal advice. Not all information is accurate.Consult a health, financial or legal professional before making any major decisions

Nate Mehag

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