HackingFIRE - Financial Independence in a Year and a Half
$250,000 of income external to my day job in 1.5 years. Financial freedom using a portfolio of ethical products and investments seeking to improve society.
HackingFIRE is my initiative to get down to the nuts and bolts of how to achieve Financial Independence and Retire Early (FIRE) using technology-based investments, products and services. It's not about just gaining it for me, it's about figuring out the patterns and methodologies for as many people as possible to do it with me.
Below, I'm going to get into a bit about why I'm doing this, and why I'm doing it publicly, before getting to The Plan. I totally get if you want to skip my rambling and figure out how I'm going to achieve this, so I'll leave a quick and condensed version of the plan here.
- Goal - $250,000 by 1st January 2024
- Methodology - Technology investments, from consulting to SaaS to freelancing to educational products, all with a focus on ethical and sustainable growth and products and services that improve society.
- Oh, and I'm doing it all build-in-public style. If you want to follow along, Twitter and my newsletter, Valhalla Weekly, are great places to do that. I'll be posting updates about my income, investments and progress just about everywhere you can find me.
Have I lost you? No? Okay cool. Let's get more in-depth.
Most of you have probably heard of the FIRE movement. It stands for Financially Independent, Retire Early. The basic idea is that you structure your income, investments and work such that you can retire way earlier than the ripe old age of 65. There are tons of different variations on FIRE, such as FatFIRE, which focuses on not just retiring early but retiring rich, and BaristaFIRE, which focuses on being able to retire early but still work small odd jobs here and there for a while to bolster your income.
One of the most popular ways of achieving FIRE is to establish one or more passive income streams, or income that will come in while you sleep or with very little effort. Typically, this takes the form of dividend investment or other investment strategies, but it can also include SaaS programs, VC investment, cryptocurrency investment, real estate investment and more.
My approach is going to be software- and tech-centric, which is one reason behind me calling this initiative HackingFIRE. This isn't necessarily to say that other FIRE adherents don't use technology investments and SaaS and such to achieve financial freedom, but it does scope down my focus somewhat.
Now you may be asking, why FIRE to begin with?
Well, I personally believe that one of the biggest tragedies of the current world is the level of wealth we have available in our economy compared to the average amount of freedom we have. Especially as an American, even after the most recent economic downturn, this is the wealthiest era in world history... yet we're all still chained to our desks for the better part of our lives, working jobs we aren't passionate about in a horrible cycle of debt and poverty.
The FIRE movement, to me, is a way of protesting this arrangement by dropping out of it as early as possible. Most of all, I want to be able to focus my life on work and research that doesn't have the financial incentive that we need to chase to put food on the table. You're breaking the chains and by your very existence outside of that system are protesting its existence and its influence on our lives.
Why do it publicly?
The biggest reasoning for me calling this initiative HackingFIRE is that I'm going to be as public as possible with every bit of this project because I want other people to be able to achieve financial freedom. Because I view this as a form of chain-breaking protest, I want other people to be able to join me. We should all focus more on liberating as many people as possible from a world where they are unfulfilled and underpaid. That's what the "Hacking" part is all about: I want to really drill down to find out how to achieve financial freedom as quickly as possible within a fairly narrow bounds of acceptable investment opportunities defined by my own ethical code.
I think the most important part of this project is getting other people involved, educated and motivated to do the same in their lives, to help people understand and develop the philosophy of ethical entrepreneurship. I also think radical transparency as promoted by the building in public philosophy is in itself an incredibly valuable idea to promote.
$250,000 is a lot of money, so why that specific amount?
Well, for one, that's about how much I'll make within that time period from my day job. Since my goal is to obtain financial freedom, replacing my day job income is pretty much the most important factor. Until that goalpost is reached, I can't honestly say I'm "free" because I'm not able to leave my job without taking a huge decrease in income.
Since I still plan to stay in my day job this whole time, that $250,000 will be reinvested in my own projects and investments and, most importantly, will go toward paying off what little debt I have. This includes my house, car, phones and other assorted debts. Debt is the next biggest pillar that needs to be toppled to achieve financial freedom: you can't call yourself free if you're beholden to companies that hold your assets and capital over your head to extract interest. Sustainably breaking out of those debts means taking back what yours and owning your own capital.
So, here is how I'm going to do it in general terms. My planned investment strategy can be broken up into 4 different categories, listed below according to how large of a part they'll plan in my strategy. Notably, I am not going to be investing in real estate during this period, as I think that in and of itself isn't ethical. Rent extraction is something I think should be eradicated or minimized in a more just world.
The percentages next to each category aren't necessarily ones I'm going to stick with, but they're essentially a vague guideline of how much time, effort and capital I'm going to be putting into each respective category.
The end goal is to have made $250,000 by January 1st, 2024 from investments in each of these four categories.
Technology investments (40%)
Tech investment is going to be the largest focus for me. This includes things like SaaS application development, consulting and freelancing and other R&D-based investments. My goal is to build a portfolio of products, similar to Jason Leow, that bring in passive income every month, even if it's a fairly small amount.
Now, here is the catch. In my opinion, building SaaS products that are essentially just silly widgets to extract money from people that might be a bit too loose with their subscription spending is either unethical or just a waste of time. The technology products I build are ones that I think will directly positively benefit society. I've written on this topic before in my article on Software and Social Good, but basically I think we all should turn away from the idea of "I bet I can trick people to drop money on this widget" to "this will positively benefit society if people will invest in it." So, instead of building widgets, I'm going to build things that will have a direct, positive impact on the world, and with each product release I'll focus the marketing and explanatory on how I think the software will provide that benefit.
Educational investments (40%)
Access to information and educational resources is something I'm incredibly passionate about. I built a fairly successful class on web scraping that made me a little over $1500 that I then released for free. I'm currently building a full e-book on building web scrapers that I plan to release this year for the cheapest price possible. My second largest investment will be in the creation, promotion and marketing of educational products like e-books, classes and consultation that follow the same ethical guidelines as the section above: the focus of these products will be in promoting the access to valuable information to as large of an audience as possible. I plan to release most of these products for free after a certain period of time to increase their impact and spread.
Market investments (10%)
Market investments are hard to make ethically, and I plan on investing fairly little of my time and resources on market investments. The hardest part here will be due diligence: is the company that I'm investing in acting ethically? Are they trying to create a better world? Are their means for doing so ethical?
So, my plan here is to do some solid due diligence research on public companies that are doing good in the world and create a portfolio of those companies that I can invest in over time. That pretty much leaves out most ETF's (since most of them are primarily made up of companies that are killing our planet or eroding our freedoms) and a lot of the blue chip stocks. I'll have to do a lot of work here, for fairly minimal reward, so my investment here will be fairly minimal.
Cryptocurrency investments (10%)
Cryptocurrency investments are probably the more difficult investments to make ethically. I'm of the opinion that most cryptocurrency spaces are blatant scams, and thus are disqualified from being ethical investments for me. I also believe that Proof-of-Work coins like BTC are ruinous for the environment. That being said, I think there is a case to be made for Proof-of-State coins like Solana and related projects, so I'm willing to consider investing in these types of projects. There are also cryptocurrency projects that are focused on ecological sustainability and liberatory research like privacy, support for artists, anti-censorship, etc.
So, here's my plan: I'm going to read up on that space and I will look into investing in projects that fit my ethical boundaries. You can pretty much discount NFT's and PoW coins, though.
How you can follow along
The best way to follow along is on Twitter and through my newsletter. I'm going to be including a blurb about the HackingFIRE project in every weekly newsletter, so you'll get updates that way, but I'll be tweeting about it via the hashtag #HackingFIRE as well.
If you want to join in, write up your own plan and goals in a blog post or Twitter thread and get started! You can use the same hashtag if you'd like, or you can change it up. The biggest thing I'll ask is that you do it as publicly as possible and try your best to get other people to follow along.
I'll be posting about the journey on this blog, too, so you can check out the category HackingFIRE to see all of the related articles.