South Jersey · Member since 2016 · 78 posts · 35 votes
I get markets, lifestyles and goals differ.. but how much passive income do you need coming in to walk away from your full time job?
We all are ambitious if we’re on BP.. so what are your goals? What is the line where you say “this is enough for me?”
To retire at a normal retirement age you need a income of around 70% of your gross employment income.
To retire younger your passive income will need to equal your working income and you will need to continue saving for retirement.
You would need 10X your working income invested to generate sufficient income for retirement.
"I also buy all of my homes with cash so they cash flow even more."
Buying cash flow is not the same thing as investing to generate income. To efficiently use your money to generate income for retirement you must invest it. This will actually reduce the amount of money needed to retire. Buying retirement income is not a efficient use of money, it will effectively double the amount of cash required to retire.
I've tried ignoring you but you just keep at it. I don't give a crap what YOU THINK about my investment style. Goodness gracious you have to be one of the most pompous and self loathing people I have come across on this website.
If you want to leverage all your properties then go right ahead. Stop trying to tell me how wrong you think I am for buying properties with cash.
I buy cheap homes and cash flow extremely well. I don't care what you think about how I invest. Every situation is different. Most people can see/understand that. You live in some fantasy world where everyone else is wrong unless they are doing things the way Thomas does them.
Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
8y
Love my job. Very rewarding.
Also great benefits that include a decent pension.
I will likely retire a couple years earlier than I otherwise would have. But more importantly my goal is to have my kids' college education paid for should they chose to go.
Rental properties will bring in a 3rd income that is equal to each of our incomes... and will grow at a steeper clip.
"I've tried ignoring you"....You need to try harder Derek.
Cash hoarders are so defensive, rightly so perhaps. You need to be a little less sensitive and try to not feel you need to defend your philosophy for saving money.You want to save money I want my money to earn it's keep. It is not a big deal that we do not view money the same.
"pompous and self loathing people" I am neither, I have the same personality trait as your president.. I am a sociopath. Further I am not telling you that you are wrong, I am telling others interested in investing why hoarding of cash is not investing wisely. If that makes you uncomfortable I believe I may know why.
Do yourself a favour take a few deep breaths, repeatedly say to yourself "I am happy with my choices"......and do not respond to my post.
Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
8y
@joe splitrock I remember when kids used to get braces in their teens- my 1st guy had his off at 10 and I just got my 7 year old to the orthodontist for his 1st appliances! yeesh- Also, remember all those hand me downs equipment you used to get as a kid.... No more where I am. We just had to go out and buy our travel baseball player a new bat because they changed the regs. yeesh $$$! And tutoring... Boy I would hate to be the child of a mr. money mustache mom, "What do you mean I can't fashion this tree branch into a bat!" "But I knitted that batting helmet all winter!" ;p Granted I live in a higher cost area... but I didn't have cleats and baseball pants when I played cap and starter little league! And we all shared the same batting helmet... Costs are not stagnant
@Michael N. You betcha... This summer we will be looking at an apartment in Poland that will be our home away from home. Certainly not for more than 6 months at a clip, but as long as the kids are good- as much as we like. Love it there and love the people, pace and dollar/zloty ratio.
But I agree with what @Thomas S. has said in the past- You are not truly retired as long as you are holding investment properties.
Thomas S.
I understand everyone has different views and opinions on different subjects.
Nobody get likes by everybody in the world.
Nobody get hates by everybody in the world.
In fact, I do enjoy and have learned a lot from Thomas’s many other posts on BP.
Thomas’s investing strategy has inspired me a lot.
I’m Thomas’s little fan.
;)
Flipper/Rehabber · Tallahassee, FL · Member since 2014 · 462 posts · 237 votes
8y
It's like in the show "Breaking Bad" where they have a pallet of money in a storage unit and the wife goes in to spray so the bugs don't eat it all. I think a good number is $30,000 a month that would supply enough money to for me and the family to do what we want.
Answer to this question is different for different people, and sometimes different for same person in different stage of the life. As of now... I think ideal should be...
$2 Million, that you...
Invest in RE at 7 Cap = 140K/Year
Invest in high dividend stock/ETF (5% Dividend) = 100K/Year
Deposit to CD at 5% (If we get 5% CD back in future :) ) = 100K/Year
At 100K/Year you can have decent life... again for some people it can be 50K and other it can be 500K...
Or invest in rental property using leverage and get higher than 7% return! That $2M could buy you a $10M property.
As far as CD rates, you will be waiting a long time to see 5%, but 3% for longer term.
Also keep in mind some of the income on rental property is tax sheltered, so in your above examples, the take home is greater for real estate.
I get your point and no argument from me that if you have $2M, you should be able to live off it by making smart investments.
For 300K you can have a house on the beach in a gated community with full amenities. For $100K you can have a luxury condo.
I would get a place in Thailand to spend winters (Summer is too hot), have one paid off home in California for the summers and other rentals to cover the day to day expenses (less than $5K per month). Leaving all other investments, IRAs etc untouched. I could probably pull that off today but I like my job so Im in no rush.
Is anyone else planning to retire overseas to dramatically reduce expenses without sacrificing lifestyle?
2-3k/month will go very far in some places.
I'm not 'planning on it's, but my wife us from Mexico and I'd go live there for at least part of the year. Only problem is the drug related violence down there. However, I live in a low cost area, so expenses aren't high here anyway.
For 300K you can have a house on the beach in a gated community with full amenities. For $100K you can have a luxury condo.
I would get a place in Thailand to spend winters (Summer is too hot), have one paid off home in California for the summers and other rentals to cover the day to day expenses (less than $5K per month). Leaving all other investments, IRAs etc untouched. I could probably pull that off today but I like my job so Im in no rush.
I'e heard from lots of expats...foreigners can't own property in Thailand. You could buy and put the property in a Thai's name...but good luck with that.
I want to cash flow $5000 a month (after capex, repairs, vacancies) which is double my current monthly spend of around $2500 per month. I am single and I can easily live off $60k a year and when I reach my goal (I cash flow about $3100 a month after capex and repairs taken out currently) I will split my time between the US and South America. I used to live in Buenos Aires and I could easily airbnb an apartment in the nicest part of the city and order take out food every other night, take taxis everywhere and still live for under $2000 a month. I would spend the North American summer in the US and then after spending Christmas in the US with my family I would head to South America and spend the winter (South American summer) there. It was a good life and one that I hope to return to as soon as I reach my real estate investment goals.
I lived in Montevideo 15-20 years ago and visited BA a number of times. I'd think $2000/mo would be a little light there, though I haven't been there in a long time.
Investor · TX · Member since 2015 · 393 posts · 290 votes
8y
@Anthony Grayden
44k tax free is plenty. I'm 57 years old. In 2 years I can tap my IRA for another 10k a year. At 62 I'll draw SS for another 18k a year. That's 72k a year. My parents are plenty capable taking care of themselves, at their age with a portfolio of over a million dollars and SS. Millions of people do just fine in less than what we plan to retire on.
@Roger S. $44k is your income.. tax free and you’re retired. If you don’t mind sharing, what is roughly your expenses? Just trying to see your breakdown and rationale
We have no debt besides our rent houses and a payment on our house of less than 600 a month. We plan to travel several times a year, we have well over a million airline miles that will last for years. Our vehicles are paid for, our car insurance is about 120 a month. I currently make at my W2 job about 92k a year, but my take home is roughly what we plan to retire on. We've been living on our estimated retirement income now for several years. We got a semi late start on wanting to retire early so I am contributing the max to my ESPP and making large deposits into my fidelity account every payday.
Is anyone else planning to retire overseas to dramatically reduce expenses without sacrificing lifestyle?
2-3k/month will go very far in some places.
If it weren't for grandkids. We lived in Malaysia for several years a while back and we loved it. We will be going back for short term(6-7) week visits.
For me, I can't put a number on it (yet). I love Zig Ziglar's quote "You can get everything in life you want if you will just help enough other people get what they want". When I feel I've helped enough people get what they want, I'll be ready to retire.
As of now I have no clue how many people that is, how long that will take, or how much money I'll have once that happens. I'm not even sure what I want out of life right now to be honest. Hopefully helping others along the way and continuing to grow both personally and financially, will help me figure out what I want.
For 300K you can have a house on the beach in a gated community with full amenities. For $100K you can have a luxury condo.
I would get a place in Thailand to spend winters (Summer is too hot), have one paid off home in California for the summers and other rentals to cover the day to day expenses (less than $5K per month). Leaving all other investments, IRAs etc untouched. I could probably pull that off today but I like my job so Im in no rush.
I'e heard from lots of expats...foreigners can't own property in Thailand. You could buy and put the property in a Thai's name...but good luck with that.
You cant own land. You can buy condos. And apparently get 30 year leases on land. Still looking into it. But I know a few people who have done it,
Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
8y
I personally am NEVER planning on retiring.
HOWEVER, I became financially free in 2004 when I was 38 after purchasing several multi-family properties since 1997.
Now, in 2018 which is 14 years later, I've expanded my Real Estate Portfolio along with a Property Management Firm, started a Brokerage and became a Partner in a Software Development Company.
Financial freedom is probably more the key than what you need for retirement.
If you are already Financially free, then you ALWAYS have the option to Retire. Many of us chose not to Retire!
Alliance, OH · Member since 2016 · 2 posts · 0 votes
8y
This was complex question when I first started buying investment properties till I seen a online guide to early retirement that made it pretty simple. They took some backwards planing steps and broke it down to how much does it cost for someone looking to retire early to live per day. They called this something like a life number. It takes into account everything from travel, emergency savings, housing, medical costs ect. I gave it some real thought and my life number is 277. So for myself to walk away from "working" I have to make 277 a day after taxes are paid with passive income.