Investor · Clemson, SC · Member since 2008 · 198 posts · 156 votes
Hi fellow BP members. I'm helping Bigger Pockets work on a project about using real estate investing to retire early (aka achieve financial independence).
Would you mind taking a brief survey (mostly multiple choice & took me less than 2 minutes to answer):
This survey will help us learn more about how you use (or have already used) real estate investing in your wealth building and retirement/financial independence plans.
Thank you for your help! Feel free to reply and leave comments to let me know what you think.
I have a question for you, is real estate the only or best way towards financial independence?
Part of a balanced retirement plan for me. Steady inflation-adjusted income comes from real estate rentals (annuities are crap!), safety net of cash comes from stock market investments.
Investor · Bakersfield, CA · Member since 2016 · 38 posts · 25 votes
8y
Having multiple streams of income are key! I️ don’t know if one is better than the other, they all have their place.
1: real estate gives you a ton of options such as: refi cash out (which is TAX FREE), sell units if necessary, have paid off real estate cash flow, seller finance, pass on properties to family, etc etc.
2: Roth IRA / 401k. Setting aside the fact that Roth IRA is tax free at retirement and 401k is taxed, both give you the opportunity for compound interest which is so extremely powerful, especially for young investors who socked away any amount they can in their 20’s. Earning several hundred thousand a yr in the market by the time you retire in compound interest allows you to be more aggressive in risk taking before retirement because you have a fall back.
3: business ownership. Now, you can put your real estate business here but I️ was thinking more of another form of income outside of real estate. Again, if you have been building your real estate and 401k then you can take a risk and try to run a business that you area really passionate about and make additional income from I️t.
When I️ review the wealth building in the world, other than generational wealth, I️t comes from 3 areas: stocks, real estate, and business ownership. So, why not try all three!!
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
8y
For everyone that is saying to me it's the simplest. I actually think it isn't. It's not hard by at all but there are many people that don't know what their doing within the business. Or they try to scam people. I'm also trying to not be biased here lol. I love reaL estate of course! But I personally think a business that your running(not actively working in if you know what I mean) is right up there if not better than real estate by a small margin.
I have a question for you, is real estate the only or best way towards financial independence?
I personally use real estate investing, but there are also other viable paths. Stocks, businesses, index funds, etc can all work. I think a lot depends on your personality and interests.
But I will say that real estate investing gives much more control with things like the timing of your wealth building. For example, you can buy rentals, do a debt snowball , and time pretty well when you'll be financially independent. Other avenues - you're more at the mercy of the market.
So pretty much real estate people seem to be control freaks (in a good way:)!
For everyone that is saying to me it's the simplest. I actually think it isn't. ... But I personally think a business that your running(not actively working in if you know what I mean) is right up there if not better than real estate by a small margin.
To me, the simple part of getting to financial independence is this:
1. Make as much money as possible
2. Save as much as possible (big savings rate - like 50-75%)
3. Invest your savings safely and profitably
Real estate investing can help, mainly with #3. You can also flip houses or do short-term holds where you resell for a profit to help with #1.
But I agree real estate isn't as simple as say - investing in an index fund. Real estate, at least up front, IS a business. If you have another business with a lot of chances to grow your income, nothing wrong with doing that.
At some point, though, you'll have to decide which vehicle is going to produce the most income, most passively. I have found few businesses (or investments) who have that combination as well as real estate. It's worth learning for that reason.
I'm not going to use real estate to retire early. I will use real estate to build wealth and income. I have no intention of retiring.
Yeah, I prefer the word "financial independence" over early retirement for that reason. I have met few people with the ambition to retire early who just sit around. Most of us have projects, businesses, or other activities that fulfill us and keep us busy. For example, I do a lot more writing now.
I think the main difference is you can work completely on your terms. Money may be part of your equation still, but after FI you can make much different decisions because you don't need the money.
This forum is about RE and I expect a bias in the results of this survey..
You're absolutely right there will be a real estate bias in the survey. My main goal was to find people who do have that bias, and then learn more about HOW they use real estate investing. Some use it for wealth building. Some for income after financial independence. Some for both. And from the results, I can see there is a LOT of variety in between for how people use it and mix it with other strategies. So, it's those nuanced lessons I was looking for, so that we can help educate and meet investors at their different approaches.