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!