Financial Independence Lifestyle: Before and After

Investor Mindset
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Financial Independence Lifestyle: Before and After

Jerry Poon
Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes

For those of you who have jumped into real estate investments to reach the goal of financial independence, what is the lifestyle you have visualized for yourself after you have done so?

For those of you who have reached financial investment via real estate investments, what is your lifestyle like now? What was it like before? What hobbies did you pick up after reaching financial independence?

I am also interested in numbers. What were your personal goals that allowed you to be declared financial independent? How have you allocated your assets/cashflow for your lifestyle now that you are set?

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Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
9y

I left my corporate job 2.5 years ago to manage our portfolio.  I ended up getting really bored and started two new businesses within the first 6 months of being "retired"

So I still work, but being self employed allows me a ton of freedom.  Some weeks I work 20 hours, sometimes it's 80 hours.  I go to the gym, get groceries, run errands during the day.  If I didn't sleep well, I take a nap in the middle of the day.  I don't set my alarm anymore and wake up when my body feels like it.  

Travel was also a big deal for me, so I take off about 6-8 weeks a year to travel (This year was a 35 day trip to southern Europe!).  My rental income covers all of my monthly costs, and the ability to maintain the lifestyle I was used to.  It doesn't cover an extravagant travel budget, but the business I started after covers that.  

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  • Adam Christopher Zaleski
    Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes
    9y

    My day job pays for our basic bills. I primarily got into buy and hold rentals to fund travel. Right now most of our travel is domestic and we spend about $500/month or $6,000/year. I would like to add another $6000/year to our travel budget for one big international trip each year.

    We have two rentals and get about $1600/month of cash flow (after repairs). Our first international trip is going to be in New Zealand in summer 2018. I have a cousin that is getting married. I think we are going to stretch it into a one month trip.

    The two rentals also affords us the opportunity to live on Kauai. Maybe we could pull it off if we didn't have the two rentals, I'm not sure. However, it makes it much easier with the two rentals.  

    6Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Adam Christopher Zaleski Wow that's nice.  Do you think you'll ever to get to the point where your rentals pay for travel AND all your bills?

    0Reply
  • Adam Christopher Zaleski
    Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes
    9y
    Originally posted by @Jerry Poon:

    @Adam Christopher Zaleski Wow that's nice.  Do you think you'll ever to get to the point where your rentals pay for travel AND all your bills?

    That will probably happen in the next 8-13 years. However, I won't quit my job, so it's not really a goal of mine. It would be fun to look at it on paper, but that's about it.

    0Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Adam Christopher Zaleski How long did it take for you to get to your current level?

    0Reply
  • Adam Christopher Zaleski
    Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes
    9y

    Real estate has always been a side gig, so it's probably taken me longer than others. I read "Rich Dad Poor Dad" at age 22 (2002). That is probably when everything started. I also read another 3-5 generic real estate books over the next 2-3 years. 

    I created enough capital to buy my first rental in grad school when I was 27 (2007). It was 4 bed/2 bath and I rented 3 rooms. People call this house hacking. I think it's a great first step. I left grad school at 31 and bought my second home at 32 (2012). It's been a rental for the last 2 years.

    After I got excited about real estate, it still took me 5 years to get my first deal. When I read Rich Dad Poor Dad, he talked about a massive real estate recession in the last 1980's with very low prices on houses. I was like, "Man, he was so lucky for that to happen. Prices are doing nothing but going up right now." Then in 2007 everything changed. I was like, "Holy crap! It's happening!" Afterwards, I realized it had nothing to do with luck. It's about preparation and then taking action. I think action without any preparation can be dangerous.

    8Reply
  • Michael Wu
    Queens, NY · Member since 2017 · 43 posts · 7 votes
    9y
    Agree with Chris. I'm currently in college, but know that real estate is something anyone can enjoy. Right now it's the sellers market, but there are still good deals to be made. Keep getting them, and by the time you retire at 40, do it full time.
    1Reply
  • Elbert D.
    Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    9y
    I'm still in my mid 20s but as of now I'm doing wholesales and flips until I am ready to buy and hold in a good neighborhood in chicago that can cash flow well. My biggest goal within real estate is to have two companies. LLC for holds and a corp for a real estate development company, being at the head of the industry and having all kinds of teams within my company. Dollar amount is unknown but I visualize me having gf/wife and just enjoying a simple life to be happy. This is a interesting post by the way.....
    4Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Adam Christopher Zaleski Yo good for you for being prepared to take advantage of a ****** situation. I wish I had money back in 2007 haha

    I wasn't into the real estate game back then. Did you ever struggle with the thought of prices going down even FURTHER? I could imagine it have been pretty tough to determine when the actual lowest point was in that recession DURING the recession.

    1Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Michael Wu Where did you figure the 40 years old number?

    0Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Elbert D. Thanks for contributing. Have you ever done napkin calcs for those numbers? I've read a few goals that people have for retirement, and it ranges from $50k/year to wild numbers (not that they are unattainable) like $200k/year passive.

    0Reply
  • Federico Gutierrez
    Realtor · Cleveland, OH · Member since 2015 · 2k+ posts · 857 votes
    9y

    I have a portfolio in USA that in theory generates me $70K a year. Australia is a different case, thats just appreciating money that's sitting in land rather than the bank

    In theory I say because things will always break and tenant turnover will occur. Some people forget those costs. But I have lived off that money a few months while I'm on vacation.

    2Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    I left my corporate job 2.5 years ago to manage our portfolio.  I ended up getting really bored and started two new businesses within the first 6 months of being "retired"

    So I still work, but being self employed allows me a ton of freedom.  Some weeks I work 20 hours, sometimes it's 80 hours.  I go to the gym, get groceries, run errands during the day.  If I didn't sleep well, I take a nap in the middle of the day.  I don't set my alarm anymore and wake up when my body feels like it.  

    Travel was also a big deal for me, so I take off about 6-8 weeks a year to travel (This year was a 35 day trip to southern Europe!).  My rental income covers all of my monthly costs, and the ability to maintain the lifestyle I was used to.  It doesn't cover an extravagant travel budget, but the business I started after covers that.  

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    22Reply
  • David Zheng
    Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
    9y

    I'm going to go the total unhumble way about this and give you some solid numbers because it will probably motivate you more as it motivates me

    I'm at a full time right now at 70k salary but my monthly cashflow from rentals alone after piti, investors, expenses, etc. is 9.5k/month. Obviously much higher than my paycheck but I don't forsee myself quitting anytime soon. I would like to get to 20k before I consider stepping down to a part time employee.

    Reason being, as a single young male, I want to live the high life. yup exotic cars, beach front properties, traveling when I want to etc.

    Willing to sacrifice a lot of my younger life to live a much more comfortable 60+ years

    14Reply
  • Elbert D.
    Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    9y
    Jerry Poon I haven't done the numbers yet but to be "retired" I want atleast 5 million a year at minimum just off real estate alone. I think with the current economy and with inflation that's a humble number to be honest. But with the addition to go into luxury high end and commercial buildings I know for sure I can reach that number if not greatly exceed it.
    2Reply
  • Adam Christopher Zaleski
    Investor · Pueblo West, CO · Member since 2014 · 310 posts · 213 votes
    9y
    Originally posted by @Jerry Poon:

    @Adam Christopher Zaleski Yo good for you for being prepared to take advantage of a ****** situation. I wish I had money back in 2007 haha

    I wasn't into the real estate game back then. Did you ever struggle with the thought of prices going down even FURTHER? I could imagine it have been pretty tough to determine when the actual lowest point was in that recession DURING the recession.

    I moved to Fort Myers, FL in 2011 for my first job as a college prof. When I was looking for a house in 2011, the level of fear and emotion about the uncertainty of the economy was unreal. It was especially bad in Florida. However, I loved it and treated it like a game.

    I have a Ph.D. in Applied Social Psychology, which I think gives me a competitive advantage in understanding people's fear and emotions. The Fort Myers house was my primary house first and then I switched it into a rental. When your strategy is buy and hold, the appraised price doesn't matter, after you buy it. It could go up or down and I don't really care. I care more about the current rental value than the appraised price of the house.  

    In reference to lifestyle, this is me bragging about my job, which is why I will never quit. This is my 10th year of teaching college and it's my 6th year of teaching full-time. When I got my first full-time job, I was probably working 50 hours a week. However, after about 3 years, I got it down to 40 hours/week. Now I have systems for everything so I probably average about 30 hours/week. I am on campus 3 days a week for about 20 hours. The other 10 hours is spent working from home, mostly on the on-line part of the classes. Both semesters combined is 34 weeks, so I work a total of 1,020 hours/year. If you spread this over 52 weeks, it averages to be 19.61 hours/week. Why would I quit? I also love teaching.

    5Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Federico Gutierrez How long did it take to get to $70k a year passively? What income did you have when you first started? What market in the USA are you investing in? Are you purely buy and hold?

    0Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Brie Schmidt Good for you. Did you envision that type of lifestyle before you "retired"? Any regrets? What monetary goals did you set for yourself before you retired? How long did it take to get there?

    0Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @David Zheng What market are you in? How long did it take to get to $9.5k/month from your rentals? Did you obtain that mainly through buy and hold?

    2Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Jerry Poon - I envisioned working less, but anyone who knows me knows that I can't relax and not do anything.  

    Our goal was $10k a month cash flow, and we felt $35k a month gross rents would get us there.  

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    3Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Brie Schmidt How long did it take to get there from the day you started investing in real estate?

    0Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Jerry Poon - Four years

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    1Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @Brie Schmidt You got to $35k/month gross rents in 3 years???? What salary did you make before you retired?

    0Reply
  • David Zheng
    Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
    9y

    @Jerry Poon

    I started investing in Dec. 2015 with buy and holds

    I invest in the Midwest.

    0Reply
  • Jerry Poon
    OP
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 236 posts · 67 votes
    9y

    @David Zheng You got to $9.5k/month in rentals in basically one year?? Can you give me some info on how you achieved this?

    1Reply
  • David Zheng
    Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
    9y

    sell, sell, sell.

    my advice is talk a lot and talk smart. Always research and read. Be prompt and persistent on everything. I check listings 5 times a day and talk to many wholesalers/agents.
    I negotiate really well when buying, getting the best rates from lenders then contractors,  selling myself and my business to investors, and finally "selling" my properties to renters for extremely high rates.


    Learn what gets people to bite and apply it to your specific situation. you really do have to be passionate about what you do is the other bit of advice

    11Reply
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