Financial Independence Lifestyle: Before and After
Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes
Financial Independence Lifestyle: Before and After
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
9yI 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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- Cerritos, CA · Member since 2015 · 2 posts · 1 vote9y
@David Zheng and @Brie Schmidt Thanks for being honest. I am just starting to look for my first property. I work full time as a special education teacher helping youth with disabilities prepare for jobs and internships and transition into adult life. I am also a mother of 3. I have a Bachelor's in Business and have always had an entrepreneurial side and would like to obtain more first property this year. I am having a hard time deciding where to buy to get a decent positive cashflow. Researched places in Texas, Florida and North Carolina so far, have also looked in CA but too expensive here. Any suggestions or tips?
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Ericka G. Thanks for sharing. It's funny how letting go of your corporate life led to a job you loved. How long did it take from your first real estate deal until you were able to "retire" from the cube life? How did you feel before taking that first "retirement" plunge?
Would you mind sharing some numbers? What monthly income allowed you to retire? What monthly income would allow both you AND your husband to retire comfortably? Have you accounted for future health care costs as you two age?
Would you mind sharing the details on the deal you missed out on by not having a 9 to 5? Details as in purchase price, monthly rents, area, etc. What sort of SF deals do you typically deal with now? Did you do cash deals before you took this new job? If not, how did you secure financing without a 9-5?
Originally posted by @Jerry Poon:
@Andrey Y. Hate to say it but you're kind of going against what this whole forum is about. People are here to save/borrow money and supplement/replace their incomes with real estate to build better lives. It's the bigger picture. I absolutely get what you're trying to say, and a few on this forum will unfortunately die before they see the fruits of their labor, but a great, GREAT, GREAT majority will live to enjoy the rewards of their current financial/social sacrifices. I appreciate your input though, and I honestly feel the same way you do sometimes. It's what I'm building towards. I am sacrificing probably 10 years of my life to do this the right way, and hopefully I get to live the rest of my life the way I want to, financially free. Different folks, different strokes.
A wise man once said that is like saving sex for old age! Do what you love to do NOW!! That wise man was Warren E. Buffett.
- Miami, FL · Member since 2016 · 33 posts · 2 votes9y
I'm new to real estate investing and still going my homework on the subject. I attended a few three day real estate classes and also read the first four rich dad books. My goal is to replace my wife's income this year it is about $3k a month. Long term goal is to $15-$20k of passive income a month. My strategy is to start wholesaleing, flipping, and buy &ahold.
- Jerry Poon This is a great question and something I've planned for and dreamed about for years now. In fact personal finance is my real passion and RE is the a tool that I'm using to get to FIRE (financial independence retire early). My lifestyle now is pretty good - high paying job, great family, etc but I lack the freedom to do what I want when I want which has been extremely important to me ever since I started working a full time job. I dream about being at home both before and after school to make my 2 young kids breakfast and take them to school and then being there to pick them up each day. I dream of being able to experience them growing up and shaping them into independent self-starters that have a foundation to achieve financial freedom in their 20's. I dream of spending my days relaxed and excited to find another deal just for the thrill of it. My wife and I long to spend our summers traveling to new places for weeks/months at a time, to teach our kids about the world by experiencing it first hand. We dream of being able to pick up and go to _______ for a week anytime we want (you fill in he blank!) We are getting close to my personal comfort level for FI. I'm 36 now and in less than 18 months I'll retiring from the military with the benefit of a small pension. At that point, the RE income won't have replaced my job income but we'll be able to live comfortably as I finish executing our acquisition plan. My goal is 75k/yr from long term rentals without managing them myself. I don't plan to stop at 75k/yr but at that point we will have the freedom to design the ideal life for us and that's all we care about. My asset allocation in retirement will be very heavy in RE at about 60% initially with the remaining 40% split between retirement accounts (stocks) and cash for future investments and as an emergency fund.
- Commercial Property Manager/Facilities Manager · Boston, MA · Member since 2015 · 187 posts · 41 votes9y
Originally posted by @Brie Schmidt:
@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.
This is literally my goal in it's entirety.. I love traveling and my number to live comfortably on my own terms is 10k. Congrats
- 9yPatrick AllenBusiness MemberRealtor · Tucson, AZ · Member since 2014 · 241 posts · 139 votes
@Jerry Poon It's something I've been working on for a few months and has kinda come in pieces.
One point of clarification is that when I say sabbatical I really mean semi-retirement. My work in coaching can be done part time for those who have the financial backing of passive income or side hustles. Meanwhile working as a Realtor is nearly 100% entrepreneurship, and entrepreneurs can absolutely decide how hard they want to work and how much they want to make.
I live a pretty low cost life in a city with pretty low cost of living. If I didn't have a mortgage or if my mortgage was being covered by house-hacking I think I could make this work on $1500 a month. For me that might mean I make $700 a month (call it $800 for tax purposes) working only with the 40-60% of my athletes whom I enjoy working with the most and $800 a month in positive cash flow. ~10 hours a week could sustain my coaching workload and another 10-20 hours a week working in the realm of real estate as a Realtor/Investor (leveraging the 80% rule of course) would free up enough time to train and sleep as much as I'd need. And any money I make through real estate transactions just get funneled into more real estate or 401k contributions.
World Class food is a bit of a stretch ;-) The rules of sports nutrition are not complicated: heavy carbohydrate intake from whole foods, plenty of fluids, lean protein and healthy fats. Scale calories with activity level. Semi-retirement just means I can dedicate more time to tasks which help my recovery, like making food at home and buying wholesale. Massage isn't any more expensive than beers with the fellas; it's just the priority you place on it.
The crazy part is although I've only been a real estate agent for about a month I'm thinking I should be able to do this in 12 months. I mean, why not?
- Columbus, OH · Member since 2017 · 36 posts · 16 votes9y
I've just started wholesaling. My goal right now is to get to a point where I don't have to work two jobs. I like both my jobs but I want to spend more time with my family, be able to travel more, and be prepared to help my step daughter out with college in a few years since her dad is a deadbeat. The eventual goal is to rent properties and build a business that runs itself.
Originally posted by @Jerry Poon:
@Andrey Y. Hate to say it but you're kind of going against what this whole forum is about. People are here to save/borrow money and supplement/replace their incomes with real estate to build better lives. It's the bigger picture. I absolutely get what you're trying to say, and a few on this forum will unfortunately die before they see the fruits of their labor, but a great, GREAT, GREAT majority will live to enjoy the rewards of their current financial/social sacrifices. I appreciate your input though, and I honestly feel the same way you do sometimes. It's what I'm building towards. I am sacrificing probably 10 years of my life to do this the right way, and hopefully I get to live the rest of my life the way I want to, financially free. Different folks, different strokes.
It sounds like we are mostly in agreement. We aren't here to please anyone or adhere to a supposed general principle of this forum. This forum is just people, it is not a living breathing thing on its own who has some specific or even general viewpoint.
To say "GREAT, GREAT majority" is just conjecture and not based on any population data or even a logical explanation. Its likely incorrect. At 60+, not a SMALL SMALL minority folks won't be as fit, healthy, mobile, inspired, capable, alive, or motivated enough to do all the things they could have done in their 30s or 40s.
People think they need a lot of money to travel / go on an adventure. This is mostly BS the media and public is telling us. I spent (and spend) more money per week living in Hawaii or Alaska, than traveling throughout South America or Asia. This includes airfare. In style, too.
- Andrey Y. Travel isn't intrinsically expensive. Neither is living. But most Americans don't choose to live very inexpensive lifestyles. Also, living in a high cost of living area like Hawaii makes it comparatively cheap to travel to other locations like since your dollar goes much farther. For someone from Tucson or Topeka visiting Paris would be super expensive. Everything is relative. It's also hard for people working day jobs to fully comprehend what slow travel is really like and how it is so much cheaper than rushing out for a week at a time when your job allows you to.
- Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes9y
For me, when I was young starting off making a lot of money, sure I wanted "stuff", but as I've aged more, I'm a lot more frugal and humble. I drive a 10 year old Escalade (Paid Cash 3 years ago), live in a modest 1800 sq ft home and don't really spend a lot of money on anything except properties. The major change is being able to do more for other people and not have to stress about bills. Living month-to-month, working for someone else can be very stressful for people. I prefer to control my own destiny.
"Even though he is recognized as one of the world's richest with a fortune of over $46 billion, investor Warren Buffet, the 'Wizard of Omaha' still lives in the same modest home he bought in 1958 for $31,500."
I started investing in 2015. Currently I have 3 rental that positively cash flow. I still work full time so not financially free yet but my goal is to make 5k net from rentals then I can be financially free. I think this will take me about 2-3years.
- Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes9y
I am very frugal and honestly don't need much at all to keep me happy. I felt like I was living a pretty luxurious life living just off of my entry level salary, just a few months out of college. I would travel on the company's dime for work to cool cities/countries, rented a massive fully furnished basement for $400/mo all utilities paid in a beautiful home, and had bought one of my favorite cars (used BMW M3 for under $10k).
Since the past 2.5 years I have started investing in real estate, I have improved my income considerably. At work I have been promoted and gotten myself a new job that pays over 50% more than my entry level pay, my rentals net cash flow nearly double figures per month, and real estate has allowed me to purchase my own little sports bar. However, I still live even below what I had back when I was fresh out of college. Going from driving an M3 to my 13 year old toyota camry now definitely took a minute to adjust. I still love to travel, but stay at $10 hostels since it's just the way I'm wired and what I prefer.
I am financially independent now, and have been since the purchase of my second mulit-unit property. I do not live off of much as I re-invest almost everything I make and still count the days to rent/pay days sometimes.
I initially did want the nice cars, house, etc., but once I realized all my requirements were able to be financially met years ago, no amount of money would make me happier in the long run. The biggest thing for me is to be able to quit my job, but I just can't justify doing it yet since I have good flexibility and still am able to run two other businesses simultaneously.
I would like to own multiple businesses, be busy, and grow financially. However the most important thing would for me to be able to have is the time & flexibility to jump on a flight and catch a game 7 of the finals, take a very spontaneous vacation, or visit an ailing loved on in the hospital.
- Investor · Cleveland, OH · Member since 2016 · 96 posts · 27 votes9yMy goal is to be able to live comfortably off my residential & commercial investments. Using the cash flow to invest in franchises & tech vc.
- Columbus, OH · Member since 2015 · 210 posts · 80 votes9y
@Andrey Y., read Grant Cardone's 10x Rules, not everyone wants to be average.
Originally posted by @Jerry Poon:
@Chris H. Thanks for sharing. How long have you been working on your goal? How much longer do you see it taking? Do you think you'll have to bump up the health insurance numbers as you age?
I understand the frustration with work and free time. As a young worker, we are often flush with cash but with no time to spend it. Either that, or the other way around.
I have been, in the past, doing it slowly- I'd buy a distressed house with 20% down, fix it up and put a renter in there, and only have maybe a 60% LTV home. I also did a couple flips in the last year.
I'm moving in to the BRRR strategy now after having done it on two properties a couple years ago. I'm going to be a bit more aggressive and try to get as many properties as possible with it.Health insurance is an interesting one. We'll see what happens with it. My worst case: I'm a dual citizen in an EU country and could move there for healthcare. However, I'd like to think I wouldn't need to do that, since, as I get older, I'll also be paying off those mortgages, which will increase the income.
- San Mateo, CA · Member since 2016 · 2 posts · 1 vote9yI am currently in the contemplation mode of real estate investing. I am getting into learning about investing because I would like to achieve financial freedom. I see myself using this style of investments as a strategy to make me money without having to physically be somewhere and as a retirement investment.
@Jerry Poon I guess I have reached that realm of financial independence. I still have my full time job but i take home more from rentals then I do my full time job. I'm only 25 so I don't feel old enough to have earned that title, It just doesn't quite feel like I am there yet as I still work but as mentioned by another person, I'm not sure that I would ever completely quit working as I don't mind it. It's nice going to work knowing you make more than everyone.
Lifestyle changed quite a bit. I drive a Mercedes and my wife and I go on at least 2 international vacations a year, with out having to worry about it.
It took about 3 years of hard hard work to achieve that.
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Tariq B. Congrats Tariq. Are you using the buy and hold strategy? 3 years is a very short time to have achieved financial independence!!
Would you mind sharing some numbers on your rentals? As in purchase price, rent, location, etc.
Originally posted by @Tariq B.:
@Jerry Poon I guess I have reached that realm of financial independence. I still have my full time job but i take home more from rentals then I do my full time job. I'm only 25 so I don't feel old enough to have earned that title, It just doesn't quite feel like I am there yet as I still work but as mentioned by another person, I'm not sure that I would ever completely quit working as I don't mind it. It's nice going to work knowing you make more than everyone.
Lifestyle changed quite a bit. I drive a Mercedes and my wife and I go on at least 2 international vacations a year, with out having to worry about it.
It took about 3 years of hard hard work to achieve that.
Even once I achieve FI, even if I achieved FI very solidly (six figure income after setting aside a significant portion for maintenance every month), I still can't see myself ever getting to the point where I'd buy a new car. Maybe a used, 5-8 year old Mercedes, if I want to live large...
I just can't help but see a newer car as a depreciating asset that loses 50% of it's value in four years. That's almost a 13% average annual loss! Why would I put money in to that??
Just the way I think about money, I guess. I mean, I'd love to drive a new Tesla, I just can't picture myself buying one even if I could afford to buy it cash.
I'd love to, however, get a dinner in a different country every week without thinking about the cost! (Probably flying economy and using awards miles for half the flights, of course...)
- Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes9y
Originally posted by @Jerry Poon:
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?
There are also levels of financial independence as well. How I like to view things is from the different levels of financial independence:
- cash to cover spartan level expenses like some have mentioned or just bare sustenance (food, shelter, medical insurance)
- cash flow to cover all basic bills (prior plus utilities, cell bills, others)
- cash flow to all basis lifestyle and min reserve tucked away as well each month (min reserve, subsequent levels can bank more reserves)
- cash flow to cover all basic, additional reserves and growth of future lifestyle increases
- cash flow to cover additional lifestyle, reserves, and additional margin to grow other areas of life style, hobbies, and investments well (self funding deals, self fund rehabs, and other activities)
At the last level and subsequent higher levels from here and on you can self fund from cash flow alone and "job," not is never needed again but depending on your personal preferences for lifestyle and risk you may work forever to stay busy or may quit the job at steps 2-3.
I enjoy what I do as a lender so perhaps I just lower my production down to 2-4 loans a month and just help my past clients and referral partners. I've never considered quitting completely with out finding replacing hobbies or other jobs. Atleast when financial independence is reached we can have the luxury of doing what we want.
Right now Im working towards the upper levels so more flexibility can be reached.
- Jerry Poon Thanks for starting this thread, I'm enjoying all of the various POVs. To answer your questions: I purchased my first property in 2005 and "freetired" in 2014/15 so I guess it took me 9-10 years? First property was a co-op in Harlem NYC that I purchased 25% down for $100k, lived there 2 years and then rented it for $1800 (yr 1) - $2500 (last 5-6 years). I became a landlord completely by accident but loved it. 2nd property 3 Bdrm Buckhead ATL townhouse for $142k, 10% down, rented for $1850. We now live in that property. 3rd property SF home in burbs of Detroit, purchased for $52k, 0% down. Rents for $1640 4th property SF home in burbs of Detroit, purchased for $36k cash. Rents for $1520 5th and 6th properties have same profile as above, cash. 7th property will be an 8 unit leveraged MF (hopefully) bringing in at least $5600 9th property same. Once we had 3 properties bringing in almost ~$6k I was able to "freetire" bc our expenses are so low living in our former rental property - mortgage is ~$800. I also was bringing in a couple thousand a month consulting. We weren't rich but our quality of life wasn't really impacted when I stopped working. I was just a bit more frugal. I felt fantastic being able to walk away from a job I hated. I made ~$150k after bonus. I wasn't able to get any additional financing after I left my job so my biggest regret was not getting a HELOC before I resigned. We would be much further along right now if I had. Full disclosure, we have no kids in HH. I almost never buy clothes (by choice) and save A LOT. We also fly free on Delta. Those things help and allow us to live on less. I didn't take long term healthcare into consideration but we both have healthy 401ks and I figured we'd be ok with Obamacare if my hubby decided to quit too. Otherwise, we had HC thru his job while I was "retired" For him to feel comfortable with both of us retiring he'd want us to be making $200k a year from passive investments/real estate. Culturally I don't think he'd ever truly be comfortable/happy not working - also he loves his work. We'll see.
- Investor · Detroit, MI · Member since 2014 · 360 posts · 354 votes9y
I'm not financially free, I don't see us ever leaving our jobs, because you need W-2 income to do bigger deals.
That said, I'm not overworking myself, I'm not angling for the corner office, and I'm not worried about losing my job, because I'll find another one, and I could take a 50% paycut and it not alter my life, I couldn't buy more real estate every year(maybe just lowly value stuff).
- Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes9y
@Ericka G. Thanks for sharing those numbers! Your goals are lofty, but it's realistic when you consider what you actually gave up for it. Did those purchase prices in Detroit include rehab costs? Do you use a property manager for them?
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