Hi Everyone, I'm just starting my real estate investment career with the goal of financial freedom and not having to work.
I know a lot of you have already reached this stage. Congratulations! This question is for all of you that have already quit your job...
What was peoples target monthly income number to get to the point of quitting their job? I know everyone's number is different and depends on a variety of different things. But, I'm curious and need some motivation and guidance on creating my own target number.
Thanks for your help!
Im a newbie too and hope to be successful in this RE business very soon. Good luck to you!
-Take an average of ALL of your expenses for a 6 month period. Do not include the holidays since spending on gifts can skew the figures. Lets assume that number is $5,000/month
-Once you have your average expense number he says to add a 10% "fudge factor" so you have some extra in case you need it. $5,000*0.1=$5,500
-Then take figure out the average amount, per door, that you can/want to make from your investments. This could be based on the deals you've done, or the criteria you've set for deals you intend to do. Lets say that number is $200/door
-Divide your average expenses + the 10% fudge factor by the average per door income you've determined. This will give you the total number of doors you need to own before you can quit your job. $5,500/200=27.5 doors
Now figure out how long it will take you to achieve that number and you can essentially determine the time, give or take, that it will take you to become financially free.
I hope this helps!
Thank you! @ Michael R. That is great information..very helpful and will be checking out that podcast.
@Dar Shan @Mary Bodrato that number is specific to each individual. If my expenses monthly were $5,000/month, I'd want to get that number down under $3,000/month (Not easy, but doable!), While adding to my rental portfolio.
I also started on my plan to Retire from the 9-5 a few short years ago. My Monthly expenses were $4,300/month 3-years ago. My monthly expenses are now under $2,200/month and to add to that, I've been able to get 2-rentals producing $150/door/month after all expenses and allowances.
I'm still at my 9-5, and though I don't plan on being there in the next 5-years. I still plan on working; I may even work harder (on my business and not someone else's)
I hope this helps. Best of luck to you
My freedom number was matching my employment income. Once I reached it I realised I could make even more by investing and still working. I had a positive attitude about work, exchanging my time for money, as opposed to being stuck in a rat race. There is no rat race, the purpose of work is to pay for your personal goals and you can do both. I did not need to be unemployed to find investment opportunities or to manage my investments.
I had the best of both worlds, retired early at age 56 with 35 years service a pension and medical coverage.
Unemployment is not the great escape it is chalked up to be especially if you simply exchange one job for another. The fact is the dream of quitting and enjoying life is a fantasy. You will die young if you don't have something to work at so you might as well get paid for doing it. Work is work whether it is for someone else or yourself, it's still just work. Time exchanged for money.
What is really needed is a attitude adjustment. Don't be brainwashed by the rat race talk, it's not real, it's just a figment of the working class poor me mentality.
Working for a living is a breeze when you view it only as a means to an end. Time for money.
@Thomas S. "I had a positive attitude about work, exchanging my time for money, as opposed to being stuck in a rat race."
I thought maybe you were not feeling yourself today when I read the "positive attitude" stuff at the beginning of your post but then you returned to form later. Glad you are feeling okay and not being held at gunpoint at your computer by some softy forcing you to get in touch with your sensitive side.
Don't get me wrong I could have hated the work but simply choose not to because I knew the true value of the job. Fortunately I intimidated management which allowing me to function without interference for most of my last 15 years.
The whole money/work topic is brought to light somewhat on the thread about millennials. The rat race is a fallacy perpetrated by unfulfilled workers. They believe fulfillment is found at work, what a joke, if only they knew.
The coin has two sides
- One side is your passive income (cash flow from rental property)
-The other side (in my opinion the more relevant issue) addresses you monthly expenses.
I know one friend (an old co-worker before I quit my 9-5 job) who could have "retired" years ago with the cash in his checking account - He lives on a little over $1,000/month - He literally spends less than $15,000 per year on his living expenses - He is a multi-millionaire. Our manager at the job I used to work when I "traded my time for money" had a household income of probably $350,000-$400,000 per year --- she couldn't afford to go out and buy lunch two days before payday because she didn't have ANY money - she was flat broke - they spent every penny they made on cars, jewelry, clothes, purses, suits, watches, eating at expensive restaurants, etc
As you see, every persons situation is different - as @Ryan Cameron said, the first step is to work on getting your expenses under control- that makes your goal much more obtainable in a shorter time.
I had a good job with great benefits, but I had other interests that I wanted to pursue - and I hated going to work every day - so I started working on leaving my 9-5 job - between adding income with rental property and reducing my monthly expenses, within a few years, I was able to leave a job I hated and spend my time doing whatever I wanted- As @Thomas S. mentioned, a job is nothing more than trading our time for money - well, Time is the most valuable asset I have - and I wasn't willing to give it away so cheaply - my Time is more valuable than money - You see, it doesn't work in reverse, I can't buy more Time, I can't inherit more Time --- money is easy to acquire, our time is limited.
I can't buy more Time, I can't inherit more Time --- money is easy to acquire, our time is limited.
That is part of the rat race mentality everyone needs to escape. Time is limitless when you no longer view life as a race. It will make no difference to the individual if they drop dead tomorrow, they won't know it happened. Let go of the standard concept of time.
When you view time as limited you will never escape the "rat race" to the end.
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