What's your financial freedom #?

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What's your financial freedom #?

Aaron Bonne
Rental Property Investor 路 Cincinnati, OH 路 Member since 2014 路 40 posts 路 55 votes

What's your financial freedom #? How do you plan to get there? And how far are you now?

To clarify, this is based purely on passive cash flow. Meaning, how much money comes to your mailbox each month without having to do anything.

I'll start.

Goal: $10,000 per month

Vehicle: Real Estate Syndications

Current: $2,000 month between 5 syndication investments and a duplex I still own

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Dennis M.
Rental Property Investor 路 Erie, PA 路 Member since 2018 路 6k+ posts 路 9k+ votes
7y

Goal -17.95$ monthly 

Newport鈥檚 9$

Bottle of mad dog 8.95$

That鈥檚 all I need to have freedom 

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  • Luka Milicevic
    Real Estate Agent 路 Nashville, TN 路 Member since 2015 路 2k+ posts 路 2k+ votes
    7y

    $60k/year in revenue with zero debt is my ultimate goal.

    This comes out to $5k/door, let's say that's 5 doors @1k/mo. 1% rule means I need 500k of property owned in all cash.

    I currently have $10k/mo in revenue but all properties have some amount of debt on them. I don't particularly care about cash flow right now as I don't touch the money from my investments. I'm planning on selling off more than half of my rentals once they have enough equity so that I can own the rest in cash. 

    2Reply
  • Luka Milicevic
    Real Estate Agent 路 Nashville, TN 路 Member since 2015 路 2k+ posts 路 2k+ votes
    7y
    Originally posted by @Russell Brazil:
    Originally posted by @Erik B.:

    @Russell Brazil

    Curious why 7 mil and not 6 or 8.

    A 5% yield on $7 million is $350k per year. Thats the income Id like to generate in addition to social security and my wifes pension. 

    I'm also curious now, ha! 

    350k/year to me personally is a boat load of money. Do you have plans on what you would do? (very personal question and I understand if you don't answer). 

    Also what would you invest in for a 5% yield? RE? Paper assets? other? 

    0Reply
  • Steve Vaughan
    Rental Property Investor 路 East Wenatchee, WA 路 Member since 2014 路 10k+ posts 路 16k+ votes
    7y
    Originally posted by @Luka Milicevic:

    A 5% no hassle, moderately safe securities yield should be easy to average. A REIT index, utilities /communications / consumer staples index ETF or a balanced / growth and income mutual fund should exceed 5% on average with 5 yr horizons.

    Heck, money markets pay 2%.   Half in that and half in a good balanced fund should do the trick.  No cap ex, tenants or toilets 馃憤

    Just keep in mind only earning 5% will be eroded by inflation and potential dips into principal.  I hope to earn 8% for this reason. 

    3Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent 路 Washington, D.C. 路 Member since 2012 路 17k+ posts 路 30k+ votes
    7y
    Originally posted by @Luka Milicevic:
    Originally posted by @Russell Brazil:
    Originally posted by @Erik B.:

    @Russell Brazil

    Curious why 7 mil and not 6 or 8.

    A 5% yield on $7 million is $350k per year. Thats the income Id like to generate in addition to social security and my wifes pension. 

    I'm also curious now, ha! 

    350k/year to me personally is a boat load of money. Do you have plans on what you would do? (very personal question and I understand if you don't answer). 

    Also what would you invest in for a 5% yield? RE? Paper assets? other? 

    Like @Steve Vaughn said, 5% is a pretty easily achievable yield to achieve with taking on minimal risk. Im a big investor in dividend stocks, so that will likely make a good deal of my portfolio. Ill likely have a larger cash position than I carry now. I will still have real estate in my portfolio, but likely to both be less of it, with less leverage than I carry now and under property management which I do not currently use. Some REIT and MLP positions as well, which I also currently have.

    That $300-$350k salary or income range though is what I feel really provides me freedom to do whatever I want.  I really enjoy where I live now and plan to live here in retirement, but its the on a nominal basis, the 5th most expensive metro area in the country, and I live in an expensive part of that metro area. I also enjoy being able to live without budgeting which that income level allows me to do. If I want to travel freely or eat out every male, being above $300k allows me to do that, while still being relatively stress free about money.

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  • Mattaniah Yip
    Investor 路 Los Angeles & Detroit 路 Member since 2014 路 52 posts 路 17 votes
    7y

    In this scenario I am no longer with my w2 job but have passive and semi passive investments.  My family have the freedom to take an overseas trip once a year, visit family, donate and kids school fund is funded.  This number for me is 25k per month. 

    0Reply
  • Dan H.Pro Member
    Investor 路 Poway, CA 路 Member since 2015 路 7k+ posts 路 8k+ votes
    7y
    $10M. What can I say other than we like to spend too much money?
    0Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent 路 Buffalo, NY 路 Member since 2017 路 2k+ posts 路 2k+ votes
    7y

    @Aaron Bonne. Everyone uses the term financial freedom and asks for a number but I believe this is misleading and takes people down the wrong path.

    What everyone really wants is time freedom. The freedom to come and go as the please, travel, read, eat, party.... whatever. What most people find that have complete financial freedom is it鈥檚 not really the end all be all. How many Uber wealthy young adults that were born into money have you heard about with drug problems, depression, etc...

    If you can strike a balance between, time, work, family, and have a fulfilling life... you have found freedom, peace and happiness. That鈥檚 more important than a number.

    The state of mind that most entrepreneurs have is where the real peace and happiness is found. Dedicated, ambitious, disciplined, and idealistic, as well as overwhelming positive.

    I will take that mind set and poor, struggling, or whatever over any numbers, projected income, or what have you.

    And none of this means by any stretch that I am not highly motivated to make more money. Because I am. I just know It has its place... and it鈥檚 place to me is not #1 in life.

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  • Luke Saglimbeni
    Rental Property Investor 路 East Longmeadow, MA 路 Member since 2019 路 154 posts 路 64 votes
    7y

    Goal: 83,333.33 per month

    Need: 10,000 per month to be free

    Current: Paper assets, plenty of silver, some auto-cards to flip, condo free and clear.

    Action: Hunting for a multi now to meet the 90 day challenge.

    0Reply
  • Luke Saglimbeni
    Rental Property Investor 路 East Longmeadow, MA 路 Member since 2019 路 154 posts 路 64 votes
    7y

    @Erik W. congrats.  im not a dave ramsey fan and know little about him.  I know that his ideology is opposite of kiyosaki which i am a fan follower and student of!  Youtube kiyosaki and debt and you should get an idea of what his and my beliefs are.  There is such thing as a good debt.  Even the big banks and big companies have debt.  They borrow at % and invest and make y% where y%-x% is a healthy profit of z%.  That is how we use $ efficiently AND effectively.  With plenty of cash flow to keep you afloat to, you will be financially free; good management companies will take out the headaches for you.  Even thought we may not agree on ideologies our end goal is the same.  Good luck.  

    0Reply
  • Eric Sipe
    Rental Property Investor 路 Dunedin, FL 路 Member since 2019 路 55 posts 路 26 votes
    7y

    @Aaron Bonne

    Goal: $625,000

    Vehicle: REI and long term index fund investing

    Current: -$53,000 thanks to my younger self being financially unintelligent (whoops)

    0Reply
  • Joseph Walsh
    Brookfield, WI 路 Member since 2016 路 191 posts 路 108 votes
    7y

    I like this question.  I would be financially free on $6k a month (until all my kids are through college, then I'd only need about $4k), but I would be willing to quit working at $10k a month.  Then again, 10 years from now I'd like to not have any properties, and just be living off of more "passive" investments, so that extra $4k a month would go toward those investments and health insurance.

    How am I gonna get there?  Looking at student rentals now, and some select cash flowing SF properties in higher appreciation areas to "long flip" 5-6 years down the road.  Plan B is to be a burden on my children :D

    0Reply
  • Andy Robison
    Investor 路 Kansas City, MO 路 Member since 2013 路 465 posts 路 170 votes
    7y

    @Dennis M. You need a bigger number. That one bottle should last 1.5 days

    0Reply
  • Account Closed
    Specialist 路 San Antonio, TX 路 Member since 2012 路 865 posts 路 351 votes
    7y

    It鈥檚 more than a number per say. I hit some goals already.

    1. I can take a trip with my family from time to time and be able to get two hothel rooms per night with adjoining doors. ( I have a good size family)

    2. Go out to eat more with family and not feel guilty. 

    3.Take the summer off with my kids while they are out of school. 

    4. Have Sundays off to go to Church with my family.

    I will say this to the parents that have children still at home.. don鈥檛 wait till their grown to spend time with them. 

    1Reply
  • Malcolm Brewer
    Brooklyn, NY 路 Member since 2016 路 12 posts 路 0 votes
    7y

    Syndication seems like a hit, how can I learn more about it ? 

    0Reply
  • Brian Pfaehler
    Investor 路 Trafalgar, IN 路 Member since 2016 路 95 posts 路 58 votes
    7y

    @Bruce C. Healthcare is the biggest problem for me....we鈥檙e fairly healthy and it鈥檚 mind boggling expensive. Good luck to you sir....

    0Reply
  • Shannon C.
    Rental Property Investor 路 San Francisco, CA 路 Member since 2017 路 9 posts 路 14 votes
    7y

    Goal: give both husband and me the option to quit our W2s / find a passion job / go part-time, in order to spend more time as a family

    $$$ needed: enough cashflow to cover mortgage, living expenses, health insurance, school expenses for the kids, and annual travel to see family

    Vehicle: passive investments, mostly multi-family syndications

    Progress: it's been about 18 months of serious focus on this as our goal. We have about a dozen investments and are 1/3 of the way there in terms of monthly cash flow (mortgage, PITI, and utilities are covered, so we're house-hacking in a way!)

    Once this batch of investments starts having capital events, we will reinvest the proceeds.Timing should work out to for one of us to go part-time, if not quit, in 3 years when our oldest starts school, and for the other one to leave 3-5 years after that... 

    The idea is that once the kids are in the midst of after school activities, sports, etc, we'll be able to be there for all of it, and spend summers together as a family.

    1Reply
  • Matt N.
    Investor 路 Washington, DC 路 Member since 2016 路 51 posts 路 14 votes
    7y

    @Elliott Elkhoury

    At 10% cap rate you would need $10m assets to generate $1m passive income. How鈥檇 you calculate $25m?

    0Reply
  • Wei Jie Yang
    New York City 路 Member since 2018 路 161 posts 路 75 votes
    7y

    Goal: I have three numbers.

    1) To cover the current lifestyle for me, my wife, and my kids. These includes all housing bills (utilities, property tax), car maintenance, food, at least two vacations (one international, one in the USA) per year.

    $4.5K per month

    2) To give the "caviar dreams and champagne wishes" lifestyle that I want to be able to give to my wife and kid(s), as well as a few other people in my family

    $25K per month.

    3) A Ego number.  If I achieve this, it means that I consider myself a "successful" person. I would like to leave a legacy to my family as well if possible, but that's far away.

    $100K per month and at least $10M net worth.

    How: Rentals. SFR and Multi's. Maybe commercial one day. Life insurance as well once I hit a certain monthly income number.

    Progress: $2K a month on 5 SFR I bought this year. I don't want to count the income or appraised value of my primary though. I don't think I will be leveraging or selling it anytime soon and I am not sure if I want to rent it out forever so I am discounting the equity and income generated on that house. But I'm still far away from goal 2 and 3 but I am pretty close to number 1.

    1Reply
  • Matt N.
    Investor 路 Washington, DC 路 Member since 2016 路 51 posts 路 14 votes
    7y

    @Aaron Bonne

    How can I get into syndication? Can you suggest a few ways?

    0Reply
  • Maurice J.
    Investor 路 Otsego, MN 路 Member since 2014 路 45 posts 路 29 votes
    7y

    @Aaron Bonne

    Great discussion!

    In my personal opinion I feel your financial freedom number is the bare minimum that you need to survive. This would be after reading Scott trench鈥檚 book and realizing how the affects of your life choices take you away from your financial freedom.

    Financial freedom for me: 4,500 per month

    25% goal achieved.

    Freedom date: 1-1-2022

    0Reply
  • Wendell Torrey
    Investor 路 Grand Rapids, MI 路 Member since 2018 路 21 posts 路 1 vote
    7y

    @Erik Whiting

    Good perspective.

    0Reply
  • Robin Searle
    Real Estate Agent 路 Colorado Springs, CO 路 Member since 2017 路 224 posts 路 201 votes
    7y

    @Bruce C. Have you looked into Medishare or one of the other cost sharing groups? We used it when my husband was between jobs and it was very affordable.

    0Reply
  • Mark Sewell
    Investor 路 Houston, TX 路 Member since 2017 路 1k+ posts 路 871 votes
    7y

    @Dennis M. I am busting my rear suspension to reduce my financial footprint to this level. Love it man!

    Got a ways to go but really laser focused on debt reduction first and foremost.

    Still investing here and there. Did one note with a BP buddy and one small assignment with another. Hoping to do another flip or get a rental, but more interested in getting some lead flow coming in.

    Laying the groundwork.

    0Reply
  • Leonardo Candoza
    Member since 2019 路 9 posts 路 2 votes
    7y

    $100,000 per month minimum. Owning my own business and funneling the profits into real estate, never go full retirement but do what I love without excessive worrying every month.

    0Reply
  • Account Closed
    Rental Property Investor 路 Sacramento, CA 路 Member since 2015 路 1k+ posts 路 893 votes
    7y

    Hey @Matt N.

    I was using leverage in my calculation. A 10 cap property, using a commercial loan w/80% LTV, 25 year amortization schedule, and a 5.5% interest rate gets you a 20% cash on cash return. To earn a million/yr with a 20% cash on cash return you have to invest 5M. If you invest 5M and get debt for 80% LTV you're buying 25M worth of property.

    0Reply
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