In my last article, I talked in detail about what my wife and I decided were our goals in life. The big “duh” is that it all revolves around money. But more importantly, where that money is coming from. We determined that we weren’t looking to become ultra-rich, but that we didn’t want to have to work so hard for the income, and we didn’t like the power that others (particularly our employers) had over us. The next step to us was obvious. We needed to come up with a plan to obtain this financial freedom. And our goal was to do it in five years or less. And for some reason less sounds better in this case…

Growing up in the age of technology, I am used to having things happen fairly quickly. When I want something, I want it NOW. Like most people these days, I’m not excited when it comes to planning for something that happens years down the line. So we worked on some options for obtaining financial freedom quickly. Our alternatives were as follows:

1. Rob a bank
2. Win the lottery
3. Inherit a bunch of cash
4. Get a divorce, Kate and I secretly go out and marry wealthy individuals, all while maintaining our secret love for each other

Option 1 didn’t seem like a good option. I’m not a very big guy. I wouldn’t do well in prison.

Option 2 has already proven to be unlikely for us. The odds of Kate and I winning that lottery jackpot last week were 1 in 146,107,962 and I’m one of those people who never wins anything. Even when the odds for winning a free Mountain Dew are 1 in 3, I still somehow never win. Go figure.

Option 3 seems like a reasonable option, but in order to make it happen anytime soon, I would have to commit murder. See Option 1 for more details on why this may not be a good idea.

Option 4 seemed like a brilliant plan, until we realized the toll it would take on our kids. If we really planned it out well, it still could work, but then we realized an important fact. Although Kate is cute and would easily remarry, I am not so fortunate. Come to think of it, why is she with me anyway? Maybe I shouldn’t bring that up to her right now…I don’t want to give her any ideas.

It suddenly became extremely obvious that we were not going to obtain financial freedom in a short period of time. What a bummer. So we went to work on the long-term alternatives and our original thought of obtaining financial freedom in five years.

Note: As you are reading this, please keep in mind that there clearly are other alternatives for obtaining financial freedom, and although those options may work great for you, only the following options seemed to make sense for us.

1. Start buying real estate and renting it out.
2. Purchase a franchise
3. Start a business and develop it into a self-running cash-generating machine

Kate and I have discussed option 1 plenty. Before she and I met, I owned some rentals in New Jersey and that went pretty well. I got out of the landlord business because I thought it was just too much work, especially not living near the properties. But now in hindsight, we can see that selling those properties was a mistake. As my father always said, “hindsight is 20/20″.

Our big problem with getting into the real estate business is that there is a rather large “hint” that the United States is on the verge of the bursting of the real estate bubble. You can argue one way or another on this, but we just don’t feel comfortable putting time and money into real estate right now. We do feel that if there is a big drop in real estate values, we want to be able to strike when things look bad. I love when there’s a good sale!

The second option, purchasing a successful existing business or franchise, sounds like a reasonable plan, right? We just put down a few dollars of our own cash and POOF! We own a McDonalds, right? I could come up with a huge list of why this won;t work for us. The list starts with the rather large sum of money that needs to put into it and ends with the stories of friends and family who have taken this approach. For a couple of small investors like us, it just doesn’t make sense.

Then there’s Option 3. Option 3 sounds hard. Really hard…but very feasible. I have run various small ventures in the past, and although I eventually went back to working for the man (insert image of me kicking myself here), I feel that having even a limited amount of experience as an entrepreneur will help us out in this area.

There are other upsides to this option that move it up on our list too. For instance, I feel that being in the computer field, we could attempt to start a business with a relatively small amount of of capitol. If it looks like a dud, we could dump it without too much damage to our bank account.

I feel pretty confident that we will be able to start a business that is successful. I’m more concerned that we will create a business that just eats up all our time and does not meet our original goal of obtaining financial freedom. If we start generating a steady cash-stream (even if it’s a large cash-stream), but it requires us to work 80+ hours per week, then we will have failed. In corporate America, this is a called a “Risk”, so we’ll have to make sure we pay close attention to this detail throughout the process.

In my next article, Kate and I start talking about what kind of businesses we think would like to start.