{"id":118415,"date":"2019-10-30T05:00:47","date_gmt":"2019-10-30T11:00:47","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=118415"},"modified":"2024-02-13T18:37:27","modified_gmt":"2024-02-14T01:37:27","slug":"retire-early-real-estate-investing","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/retire-early-real-estate-investing","title":{"rendered":"How to Retire Early (From Someone Who Did at Age 27)"},"content":{"rendered":"<p>When you think of retirement, what comes to mind? Shuffleboard with Grandma? Chess with Uncle Chester? Watching reruns of that fishing show for the 18th time, hoping for a different outcome?<\/p>\n<p>Well, let me paint you a slightly different picture.<\/p>\n<p>What about traveling the world with your family, letting your curiosity guide you? Or sleeping in on a Thursday morning and going to the gym because you finally have the time to focus on your fitness? Or working 16-hour days occasionally\u2014but not to make some jerk in a corner office richer. You\u2019re working on something amazing, something that pulls you, something that inspires you\u2014doing meaningful work with incredible people.<\/p>\n<p>And what if you could do all of this\u2014early retirement\u2014decades sooner than most? Sounds far-fetched, huh?<\/p>\n<p>Well, here\u2019s the truth: I was able to \u201cretire\u201d when I was 27.<\/p>\n<p>Now, before you roll your eyes, stop reading this, and start scrolling through your Instagram feed again, listen up. I\u2019m going to show you how I did it through the power of real estate and how you could do the same.<\/p>\n<p>Stick with me.<\/p>\n<h2>How to Retire Way Earlier Than Most People<\/h2>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/1GQ_IBAWW_A\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>OK, let\u2019s define early retirement\u2014also known as <a href=\"\/renewsblog\/2016\/03\/28\/financial-freedom\/\" target=\"_blank\" rel=\"noopener noreferrer\">financial freedom or financial independence<\/a>. Early retirement means you no longer HAVE to work anymore in order to pay your bills.<\/p>\n<p>But I want to get a little deeper. You see, there are two types of financial independence.<\/p>\n<h3>The 2 Levels of Financial Independence<\/h3>\n<p><strong>Level one<\/strong> means you can pay all your bills with passive (or mostly passive) income. This could be income from stock dividends, cash flow from <a href=\"\/renewsblog\/2013\/01\/04\/how-to-rent-your-house\/\" target=\"_blank\">rental properties<\/a>, or regular profits from a business. If you&#8217;ve attained this type of financial freedom, you don\u2019t need to work full-time.<\/p>\n<p>For me, I achieved that level at just 27 years old. BUT it&#8217;s possible to go even further.<\/p>\n<p><strong>Level two<\/strong> means you can pay all your bills\u2014but you can also do all the extravagant things your little heart desires. Buy that Tesla. Sail around the coast of Africa. Buy a pet lion.<\/p>\n<p>For the purpose of this post, I\u2019m going to mostly focus on level one. However, I\u2019ll leave you with the secret to achieving level two.<\/p>\n<h3>How Did I Achieve Financial Independence at 27?<\/h3>\n<p>For me, it was simple: At 21, I started buying cheap rental properties\u2014not hundreds of properties but a duplex here, a single family house there. Usually I\u2019d fix it up a little bit, rent it out, and make a few hundred bucks in profit after all the bills had been paid.<\/p>\n<p>It wasn\u2019t a ton of money at first. But the cool thing about rentals: they grow.<\/p>\n<p>Every rental unit I bought was like this little tiny oil well, pumping out oil from the ground\u2014$100 from this one per month, $300 from this one, $200 from this one.<\/p>\n<p>You see, every rental property I owned rented for a certain amount, and each month, there were expenses. When the income is greater than the expenses, that\u2019s called cash flow.<\/p>\n<p><strong><em>Related:<\/em><\/strong><em> <a href=\"https:\/\/www.biggerpockets.com\/blog\/product-review-mint\" target=\"_blank\" rel=\"noopener noreferrer\">This App Will Help You Track Your Way to Financial Independence<\/a><\/em><\/p>\n<p>Here&#8217;s an example.<\/p>\n<blockquote><p>Consider a property that has four units, and each unit rents for about $700 a month. That\u2019s $2,800 total.<\/p>\n<p>I have to pay the mortgage payment, the taxes, the insurance, and the lawn care, and I have to fix stuff when it breaks. But I don\u2019t want to deal with tenant phone calls, so I hired a property manager. All in all, these expenses are $1,800 a month on average. That means, I\u2019m keeping about $1,000 per month in extra money\u2026 in my pocket\u2026 each month.<\/p><\/blockquote>\n<p>So, when you buy awesome home run deals like this, it doesn\u2019t take long to make more from rentals than from your job.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-116862\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/09\/reflecting-thinking.jpg\" alt=\"Man sit on the Bench looking out a sunset over grassy field\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/09\/reflecting-thinking.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/09\/reflecting-thinking-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p>Back to my story. Before I knew it, I was making about $3,000 per month from the cash flow. And this leads me to point number two if you want to retire early: You gotta keep your expenses LOW.<\/p>\n<p>Look, if you need $3,000 to pay all your bills or you need $30,000 to pay all your bills, which is easier?<\/p>\n<p>Duh! $3,000.<\/p>\n<p>But here\u2019s what most people do. They get a job. They get a paycheck. They spend their entire paycheck every time they get it.<\/p>\n<p>Then, they eventually get raises or get a new job that pays more. And guess what? They spend that, too.<\/p>\n<p>In college, they could live on $28 and favors from friends. As a 30-year-old, many people can\u2019t live on $10,000 a month.<\/p>\n<p>Now, am I saying you need to live like a college kid to retire early? Not really\u2014but it wouldn\u2019t hurt. It\u2019s the principle I\u2019m trying to make clear.<\/p>\n<p>If you want to retire early, you have to find ways to keep your expenses low. Don\u2019t fall victim to what we call &#8220;The Income Creep,&#8221; where you just keep spending more and more, the more and more you make. That\u2019s a game that is impossible to win.<\/p>\n<p>When I was 27, all my bills came to $3,000 a month. And I had bought enough cash-flowing rental properties to pay me $3,000 per month.<\/p>\n<p>If $3,000 just isn\u2019t going to cut it, then just &#8220;X&#8221; out of this article and go back to the same crappy job you\u2019ve been working\u2014because all of this is impossible.<\/p>\n<p>Just kidding, of course!<\/p>\n<p>You can still cut all the unnecessary stuff from your life. Do what needs to be done if early retirement is really that important to you.<\/p>\n<p>Sell that expensive car and get rid of that car payment. Stop eating out entirely and use the extra income to pay off credit card debt. Or consider <a href=\"\/renewsblog\/2013\/11\/02\/hack-housing-get-paid-live-free\/\" target=\"_blank\" rel=\"noopener noreferrer\">house hacking<\/a>, where you buy a duplex, triplex, or fourplex, live in one of the units, and use the rent from the other units to pay your bills.<\/p>\n<p>Maybe $3,000 isn\u2019t the exact number for you. But it shouldn\u2019t be $10,000 or $15,000 for a seeker of level one financial freedom, either.<\/p>\n<p>So, I retired at 27. I quit the job I hated, and I sat on the couch for a few months, bored out of my mind, and realized that retirement wasn\u2019t about playing shuffleboard with Grandma. It was about freeing up your 9 to 5 hours to spend working on stuff that matters to you.<\/p>\n<p>No one achieved early retirement and then stayed doing nothing. And I wasn\u2019t satisfied with $3,000 a month\u2014that was just a start, just the foundation.<\/p>\n<p>And you can do that early. I recommend looking into real estate investing to get there, because I believe it\u2019s the single greatest wealth-building tool on the planet. But only if you do it right!<\/p>\n<p>There are a lot of ways to invest in real estate that will just make you more broke\u2014less rich than when you started. So just like any hard thing, LEARN.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-114367 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/06\/read-book-8.11-702x336.jpg\" alt=\"closeup of man in white shirt and blue jeans sitting and reading a paperback book\" width=\"702\" height=\"336\" title=\"\"><\/p>\n<h3>Resources to Learn About Achieving Financial Freedom<\/h3>\n<p>Get <a href=\"https:\/\/www.biggerpockets.com\/store\" target=\"_blank\" rel=\"noopener noreferrer\">some books<\/a>. Listen to <a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\">some podcasts<\/a>. Attend <a href=\"https:\/\/www.biggerpockets.com\/webinars\" target=\"_blank\" rel=\"noopener noreferrer\">some webinars<\/a>. I host one almost every week over at <a href=\"https:\/\/www.biggerpockets.com\/webinars\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets.com\/webinar<\/a>.<\/p>\n<p>But you can retire (very, very) early through real estate if you really want\u2014and I bet you could do it in less time than you\u2019d think.<\/p>\n<p>In fact, if you want to see a really cool strategy for achieving level one financial freedom in just a few short years, search YouTube for &#8220;The Stack BiggerPockets&#8221;\u2014or <a href=\"https:\/\/youtu.be\/aDpI4ERTPG8\" target=\"_blank\" rel=\"noopener noreferrer\">click here<\/a>. It\u2019ll walk you through a concept I call &#8220;The Stack,&#8221; and it\u2019ll show you the power of exponential growth and real estate.<\/p>\n<p>But maybe real estate isn\u2019t the right approach. That\u2019s fine. There\u2019s business. There\u2019s stocks. There\u2019s other investments.<\/p>\n<p>But they only work if you work.<\/p>\n<p><strong><em>Related:<\/em><\/strong><em> <a href=\"https:\/\/www.biggerpockets.com\/blog\/retirement-accelerator\" target=\"_blank\" rel=\"noopener noreferrer\">Retirement Accelerator: 7 Steps to Reach Financial Independence in 5-10 Years<\/a><\/em><\/p>\n<p>OK, so, before I end this post on early retirement, let\u2019s talk about the secret to financial freedom level two. Here it is.<\/p>\n<p>Once you\u2019ve achieved level one financial freedom, your days are freed up to reach for level two.<\/p>\n<p>Here\u2019s a tangible example. Once I \u201cretired&#8221; at 27, I didn\u2019t stay seated on the couch. I started spending MORE time on my real estate, and I also started doing some other passion projects, like <a href=\"https:\/\/www.biggerpockets.com\/store\" target=\"_blank\" rel=\"noopener noreferrer\">writing books<\/a> and starting the <a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets Podcast<\/a> (which has become one of the largest podcasts on the planet with more than 60 million downloads).<\/p>\n<p>Now I get to work on work that is meaningful, exciting, helpful to others, and profitable. And I\u2019ve increased my passive income through all those things to the point that I&#8217;ve achieved financial freedom level two. In other words, now I can travel around the world led by my curiosity, sleep in on a Thursday morning and then head to the gym, and sometimes work 16-hour days making videos, podcasting, buying real estate, and doing other work that I am passionate about.<\/p>\n<p>I don\u2019t say this to brag. I say this as a simple truth to show you that it can be as true for you as it was for me.<\/p>\n<p>And the late, great Jim Rohn said it best: <em>&#8220;If you really want to do something, you\u2019ll find a way. If not, you\u2019ll find an excuse.&#8221;<\/em><\/p>\n<p>For more on using real estate investing to achieve early retirement, don\u2019t forget to <a href=\"https:\/\/www.youtube.com\/user\/BiggerPockets\" target=\"_blank\" rel=\"noopener noreferrer\">subscribe to our YouTube channel<\/a> and check out some of the real estate books we\u2019ve published over at <a href=\"https:\/\/www.biggerpockets.com\/store\" target=\"_blank\" rel=\"noopener noreferrer\">BiggerPockets.com\/store<\/a>.<\/p>\n<p>Do what ya gotta do to gain the knowledge needed to make your early retirement a reality!<\/p>\n<p><a href=\"https:\/\/www.youtube.com\/user\/BiggerPockets\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-114268\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg\" alt=\"ad-youtube-channel\" width=\"706\" height=\"125\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6.jpg 706w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-300x53.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/08\/6-702x125.jpg 702w\" sizes=\"auto, (max-width: 706px) 100vw, 706px\" \/><\/a><\/p>\n<p><em>What questions can I answer for you about retiring early and real estate investing?<\/em><\/p>\n<p><strong>Ask me in the comment section below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When you think of retirement, what comes to mind? Shuffleboard with Grandma? Chess with Uncle Chester? What if you could retire early\u2014I&#8217;m talking decades sooner than most\u2014and travel, sleep in, or get ripped at the gym instead of spending your best years in a cubicle? It&#8217;s possible! I retired at 27. Here&#8217;s how.<\/p>\n","protected":false},"author":710,"featured_media":118416,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7398],"tags":[],"class_list":["post-118415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/118415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=118415"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/118415\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/118416"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=118415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=118415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=118415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}