How much is enough? What is your FREEDOM number to quit W2?

Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes

I realize that everyone has a different standard of living and expectations in life, but what is your FREEDOM number that would allow you to leave your W2 position? What would you want to do with your time if it could be freed up more. As I am now 52 years old, I am now pondering this question more than more. The question is really, how much time do we all have? I believe "time" is one of our greatest assets, and if we really knew how long we would live, we could make better informed decisions. So, what are your thoughts and what is your freedom number so you can really do what you want to do, and when you want to do it. follow your dreams and passions! But it starts with a plan, so what is your plan? What is your freedom number?

14 Reply

195 views

Most Popular Reply

John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

I am netting over 100K a year holding rentals. That is not wealthy but certainly gives me a lot of freedom. I am constantly searching for more rentals (income streams) to increase my income.

49 Reply

See this reply in the discussion

136 Replies

Jump to latestLatest

Sort by

John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
6y
I am netting over 100K a year holding rentals. That is not wealthy but certainly gives me a lot of freedom. I am constantly searching for more rentals (income streams) to increase my income.
49 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@John Thedford that is tremendous! When did you leave your W2 job or do you still have it ?
What about health ins?
3 Reply
John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
6y
I have "yo mama cares" through the marketplace. Haven't had a W2 job in years.
9 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
@Todd Powell this question comes up often on BP.. since its a major focus of so many who are members of this site.
I find that its highly regional.. with some out in the very low cost of living MId west saying they can live on 3 to 5k a month.
common theme though is 10k a month I would say 50 to 75% of people that respond that's their magic number. For me since I am not in the rental game I look at paid for assets and net worth.. and limited debt..
along with having been a licensed agent and broker and a mortgage banker for decades I cant really comment on those that work for others since I have never done it.
I am a decade older than you so my focus is all my real estate paid for at least my primary home in Vegas and my secondary in Lake Oswego and I am just about there maybe 15% LTV at the moment but with plans to be to no debt as within 2 to 3 years depending on how the markets treat us..
I think one thing though that I see through these threads is folks that are much younger don't really realize how much more life costs as you age.. kids collage for kids and if your self employed health insurance is a biggee.. we have a few employees so mine is cheaper ( group plan) but its still over 2k a month for us right now until we can get on medicare and I am not sure if I would even use medicare have not looked at it depth.. and then, I think at some age in the not to distant future we can get our SSI in full for us that's, from the letters I get a little over 6k a month tax free.. So just need to hang on a little longer here :) paid for houses paid for land with trees that are growing and 6k a month form uncle sam and well we will be all set..
But that's not reality I will keep doing deals until I cannot do them so I don't see my annual income doing anything but fluctuating from a great year to a so so year but plenty enough to keep us in beans and do anything we like to do travel wise etc.. our focus at this point is on grand kids mainly.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
19 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Jay Hinrichs that is wonderful input. Your $2k a month for health ins really jumped out at me! I guess that is my main concern. I also realize if one lives with great frugality vs. loving vacations often will alter the freedom number. At 55, I will be roughly at $15k per month from rentals and stock dividends monthly. Some would say I already have the golden ticket and others would say keep grinding. We do enjoy trips often, and my wife loves Nordstroms in Beaverton, so maybe I need a higher number. Again, my main concern is health care, but many people when asked, “how much is enough?” often reply, “just a little more than I have.”
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Todd Powell:
@Jay Hinrichs that is wonderful input. Your $2k a month for health ins really jumped out at me! I guess that is my main concern. I also realize if one lives with great frugality vs. loving vacations often will alter the freedom number. At 55, I will be roughly at $15k per month from rentals and stock dividends monthly. Some would say I already have the golden ticket and others would say keep grinding. We do enjoy trips often, and my wife loves Nordstroms in Beaverton, so maybe I need a higher number. Again, my main concern is health care, but many people when asked, “how much is enough?” often reply, “just a little more than I have.”
Every time my wife says she needs to go to the supercharger at Washington sq to top off for free charge there just happens to be a Nordys something on the return I figure those free charges are costing us a pretty penny.. when I go there I just walk the mall for the 40 minute charge and get some exercise :) its all good.. we have travelled so extensively through out the years I really don't have the yearning like I used to.. More into maybe getting a mountain cabin ( not a beach guy) were I can fly fish. and walk in the pines and firs. between were you live and Lake Tahoe there are some great spots. and some that are pretty reasonable ..

Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
5 Reply
Sharon Rosendahl
Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
6y
What you need is different for everyone. I have budgeted $3k each month just for healthcare. I currently spend about $6k per year for copays etc (I am insulin dependent and a cancer survivor). Hubs spends less but it has been increasing as he ages. My employer subsidizes my premiums but currently the bill seems to be about $1500. I would lose that group plan price and likely pay more on the open market since I'm hard to insure. With dental and eye I figure I'd rather budget too much than too little.
We have figured out our costs if all of our personal debt were paid off. Add to that, some nice stuff. I have never gotten to travel a lot and would like to.
To quit my W2 I would need to have medical plus bare bones living coming in from our rental units. Obviously, all personal debt has to be paid. I want 1 year of bare bones living saved (this excludes investments, it is just liquid savings). At that point, I will spend all my time making sure we acquire enough rental income to be comfortable, probably about $120k per year in today's dollars. A little more would be fine. Then I'm just going to enjoy life. I've worked since I was 12, I'll be happy to retire.
3 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Jay Hinrichs I am the same as you. I get frozen in that mall and mentally exhausted for 45 minutes. I am always looking for the chairs. Wife is a spender and I am the saver.
1 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Sharon Rosendahl that sounds like a well thought out strategy. I know it varies for each person and situation, but after 30 years in same biz, I am getting a itch. Its getting harder and more mentally and emotionally demanding to meet expectations. Family is most important in my life so struggling to figure out my freedom number. Thanks for your input!
1 Reply
Sharon Rosendahl
Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
6y
@Todd Powell We live super frugally as we raised 5 kids plus some random other ones that came along with our kids. Our tenants live better than us. I have an unfinished bathroom at home. No one pays me to use my bathroom but everyone else pays me to make sure their bathroom looks good. My attitude is, How bad do you want it? I want to leave working for others bad enough that we don't really take vacations, we don't buy stuff because it is fun, we rarely eat out. Being a cancer survivor I know better than many that I may have some regrets because I have deferred some fun things in life but raising my family and making sure I have provided for my husband if I pass will be satisfying even if I don't get to enjoy it (although I'm really hoping to get to enjoy it).
11 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Sharon Rosendahl. Life is short and perspective is everything !
0 Reply
Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
6y
@Todd Powell I don't have a number but do realize the benefits of a W2 job. Stable income, much easier to get additional bank loans. Health care, 401K, 401k match, social security contribution, paid 80 hours training per year, stock purchase plan, stock options, legal plan, identity ID plan, train pass, gym membership, airport club membership, laptop computer.
It adds up and not to the point yet of giving that up. But someday...
3 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Tom S. wow, you definitely have more benefits than most. I do pay $735 a month for my wife and I and that is pretaxed. The social security deal is not big for me. It’s a system that I will not rely on although I will get the max as I am the highest wage earner you can be in. RE should give you goals to get you out of your W2 job at some point. Don’t get me wrong, I don’t have all the club discounts and free laptop, but it’s hard to leave my free car and $175,000 W2. Work the same job for 30 years straight you may feel differently. What is the purpose of working a job ? What is your end goal ?
1 Reply
John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
6y
My magic number is 15k/month to pull from retirement funds and rentals. I’m on track to get around 9k/month from rentals as of now. Hope to pick up a few more SFRs since I love real estate investing. And goal is to have 3 mil in 401k, Roth IRAs and other investments. I’m 48 now and on pace for this, but you never know what might happen. I’m done living frugally. I’ve been cheap my whole life trying to save every penny and invest it somehow. The plan now is to relax and enjoy life and all the down time. I love my W2 job, so not sure when I’ll quit. But my goal all along was to quit at 62. Fortunately buying real estate has allowed me this freedom and financial security. Glad I read Rich Dad book a few years ago!
7 Reply
Todd Powell
OP
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@John Morgan we are very similar. I am at $12k per month RE, and $3000 monthly at 55 (in 3 years) from stock dividends. This is not from 3 million, but $740k in the market
Thanks for sharing !
2 Reply
Aaron Taylor
Olathe, KS · Member since 2018 · 148 posts · 207 votes
6y
Health insurance is the single biggest problem with all of this. Costs are climbing rapidly, options for non-w2 employees are costly, etc. You just don't know what it's going to be 5, 10, 20 years from now. College tuition and health care seem to be the two biggest things spiraling out of the control but nobody is really doing anything about it. At least when you get to 65 you have some certainty with health care costs to a degree. I know for a long time my dad wanted to retire early but couldn't due to lack of affordable health care options before age 65. Ironically, he's still working at age 72, but now because he wants to.
2 Reply
Junior Soares
Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
6y
@Todd Powell
I havent held a w2 job in over 6 years and honestly dont have a freedom number. I plan to work and run my businesses until I'm physically and mentally incapable of doing so in which my kids will continue the legacy.
In my 20s I wanted all rentals with a $10k passively, now that I'm in my mid 30s, life has changed and I hang out with alot of older (70-90s!) Folks due to the business that I'm in they're always remodeling their homes and I pick their brains in exchange for discounts on my work. I've learned alot from the older wealthy elite.
My main focus now (age 33) is to continue to grow my businesses, net worth, continue to build a well diversed investment portfolio (stocks, rentals, reits, franchises, brick and mortar, insurance, ecommerce) aquire maybe 1-2 more franchises, and just grow and improve and enjoy raising my kids. I dont work for money I work to improve processes and make things better than when I acquired them. The money will always follow, that's the easy part to get.
6 Reply
Danny RandazzoPro Member
Apartment Syndicator · Charleston, SC · Member since 2016 · 973 posts · 728 votes
6y
@Todd Powell I got started by focusing on generating monthly income from assets to replace my W2 salary and once I achieved that number I quit my job and focused on real estate investing full time. That was my initial goal and then my investing business took off and I increased my goal which is always evolving. Today my company controls of $220,000,000 in assets. Focus on generating a monthly income number you need so you can quit your job then figure out how to increase that number based on what you want. Good luck!
10 Reply
Zack Howard
Member since 2019 · 32 posts · 22 votes
6y
My number is about 10k but that's just living and enjoying costs.. if I hit 15k the extra 5k will cover health and unexpected costs and I will feel good enough to retire.. until that 15k mark the grind continues!
1 Reply
David Evans
Real Estate Agent · Lynchburg, VA · Member since 2017 · 14 posts · 7 votes
6y
Health care seems to be the biggest hiccup for most people. My day job's health plan is a joke for my family. It was literally not an option as my paycheck would go almost entirely to paying for healthcare. We have found Samaritans Ministries to be a excellent alternative. There are a few caveats, as you have to be a church going professing Christian, but when my wife had our 3rd child, we didn't pay for anything out of pocket!
4 Reply
Anthony Rosa
Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
6y
I have 2 two family rentals with no mortgage and doing 9k month in rent. The homes are worth more than 2x more than what I paid. I have a w2 job and won't leave because the pay is better than the rentals. When I retire I'll have a defined pension plus annuities from the 401k match which I max out for the past 20 +yrs and medical paid in full. I'm vested and could leave now but I wont bc I'm too young. I'll leave at 55 or 60.
4 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
6y
Honestly, I don't know. I figure $3K per month should be more than enough. I have a simple lifestyle and am single, so it all falls to me. I'll get a pension from work even if I retire early, which is my plan and my rentals will be paid for by then for some extra security. I'm in Canada, so my health care is covered.
6 Reply
Bob Prisco
Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
6y
@Todd Powell 10kish,,,,,, assuming you have little to know debt, Less is more,,,,, enjoy life
Good Luck
4 Reply
Cara Kennedy
Rental Property Investor · Member since 2019 · 189 posts · 62 votes
6y
@Todd Powell - good conversation starter! This is a common trend.
My goals will inverse waterfall go be greater as I progress, but still being newer to this business my goal is for cash flow of $2 500/month. That's enough that I could quit my W2 when and if I wanted to, or just cut back on my week, and pursue more real estate investments and eventually starting my own business.
This number will grow and within 12 years I'd like to replace two incomes and net $20 000/month. Then my husband will eventually have the option to quit the job that "he couldn't imagine leaving" (as I'm betting that sentiment will change over time). Here's to the hustle!
3 Reply
Vance Fields
Houston TX (houston, tx) · Member since 2019 · 7 posts · 1 vote
6y
@John Morgan when did you first start real estate investing?
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.