Posted 2 months ago

And so it begins....

It all started January 1 2019.  As most people do, I tend to review how the previous year progressed and what I would like to accomplish in the coming year.  This year was different though, I realized that I am turning 40 this year (4 days ago actually)!  I remember back to the days when I was in my early twenties and my goal at that point was to retire at 40 and travel the world.  When I took inventory of my financials in the beginning of this year I realized that I was so far from that retirement that I was angry, then sad.  I decided that I needed to do something to increase my wealth, specifically my passive income.  So I set my goal to make $30k per month in passive income over the next 10 years.

Hi, my name is Andy Bauman.  I am fairly successful by most people's standards.  I went to college, I have a good job that I enjoy (most of the time) that pays me well, I have a great family with 2 kids and a wife that stays home with them, and we live in a nice house in a safe community.  I've always been frugal and saved a large portion of my income and invested it in the stock market.  Given typical assumptions for retirement investing, I should be able to retire sometime around 70 with the level of income that I think I'd like ($250k a year indexed to inflation).

But I've always wanted more!  I want to have a life where I can go where I want, when I want, with whomever I want.  I want to have a life where I don't have to worry about how much a meal out costs, or how much a personal trainer costs, or how much my vacation costs, or whether or not my stock investments will crash and burn.  With my eyes opened, I started looking around.  I decided that I wanted to get into real estate investing for the following reasons:

1.  Control and options - Investing in real estate comes with a lot of different options (wholesaling, commercial, NNN, multi-family, flipping, development, etc...) and each of these options can provide a level of control that just isn't available in the stock or bond market.

2.  Passive income - Real estate, in many different forms, allows a lot of potential for passive income.  If you have about $4M you can buy some good dividend paying stocks that will pay you a safe 5% - 7% dividend forever ($200k - $280k annually).  But in order to get there you have to invest aggressively and for a long time, which can come with large risks.  In real estate I should be able to get much higher yields through value-add acquisitions that are paid off over time by someone else.

3.  Tax benefits - Given my current W2 income is high, I'm always looking for tax brakes.  Not only will real estate offer distinct tax advantages (depreciation, 1031 exchanges, etc...), owing a real estate business offers even more.

So I made the decision that real estate investing is where my side hustle will be, but where?  Which niche?

In my next blog post I'll discuss the niche that I decided on and my reasons.

P.S.  I hope you like my first blog post!

Comments (1)

  1. Congrats Andy and good luck! I think getting involved more heavily with real estate is certainly a good idea, but stay strong in your saving and stock market contributions, too! It's so easy to become impatient with stock market returns and cash flow, but as you already know the money is in the long game with the stock market and it will come, just hard to stay patient at times. 

    I was lucky to have the awesome experience of working at Vanguard and learning a ton about index funds and their benefits. However, at times I feel it has made me to conservative. I invest in my portable self storage business and rentals too, but I was always reluctant to contribute my W-2 savings towards those two businesses and focused on investing 100% into the stock market and using debt to fund the businesses. It has worked well to this point and continues to do so, but now I'm less reluctant to invest W-2 cash into those businesses and instead dollar cost a portion of the earnings from those businesses into the stock market, which I feel will be a better strategy in the long term.

    Thanks for posting.