Rental Property Investor · Bedford, VA · Member since 2018 · 19 posts · 0 votes
Hi my name is Justin.
I am trying to figure out when do you know it’s the right time to leave your job in order to live on your investments? Example, let’s say a person would need about $5k to live on. This would be enough to pay bills but then they would be living on their passive income. In turn a person couldn’t grow their business as fast as they would want. So is there a rule of thumb a person should go by? Something like 2 or 3 times what you make a month in order to pay for bills but also accommodate their passive income.
Erie, CO · Member since 2017 · 274 posts · 267 votes
8y
For me I decided to quit my job when it was clear that I was much more excited about notes, and that the potential upside was much greater than 2-4% annual raises. I hadn't replaced my income yet, but I had the advantage of my wife making enough for us to live on easily and full benefits to go along with that. Plus I had several deals going which would pay off over the next 12 months. So I wasn't really taking much personal financial risk. If I was a sole breadwinner and had to pay for health insurance for my family it probably would have taken another year. I was a guest on a podcast where I discussed the decision in detail. I'm not sure what all the policies are here on posting links, but if you pm me I can send it to you.
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
@Justin Dillon
Everyone is different. Here’s how I look at it. First I look at living expenses. Let’s say that’s 5k. Then I look at health insurance cost. That’s probably another 1k or more a month. Then I look at my investing goals. I want to be able
To invest so I need money for that on top of living expenses.
I take that total. Add 25 percent buffer. That’s the number for me
Erie, CO · Member since 2017 · 274 posts · 267 votes
8y
For me I decided to quit my job when it was clear that I was much more excited about notes, and that the potential upside was much greater than 2-4% annual raises. I hadn't replaced my income yet, but I had the advantage of my wife making enough for us to live on easily and full benefits to go along with that. Plus I had several deals going which would pay off over the next 12 months. So I wasn't really taking much personal financial risk. If I was a sole breadwinner and had to pay for health insurance for my family it probably would have taken another year. I was a guest on a podcast where I discussed the decision in detail. I'm not sure what all the policies are here on posting links, but if you pm me I can send it to you.
Employment income is generally the easiest money to earn and will allow you to qualify for mortgages. No reason to throw that away simply due to having rental income.
I left my job behind when I qualified for a pension. No reason to leave any sooner unless you intend to change jobs to work full time investing/property management.