Your Concept of Monetary Freedom is Very Completely different Than Mine—And That’s Okay

Ask 10 BiggerPockets members what their high-level actual property funding targets are, and it’s possible you’ll get related responses. All of us need monetary freedom, proper?

That query isn’t as simple to reply as you’d suppose. As a result of once you dive just a little deeper, you’ll get a myriad of solutions about what precisely monetary freedom is. My definition of monetary freedom differs from different traders within the REI neighborhood, and plenty of will most likely say I’m loopy—together with a few of my BiggerPockets colleagues, whom I respect and admire. However that doesn’t imply I’m incorrect.

Simply hear me out—even for those who disagree with my logic (and I count on that lots of you’ll).

Monetary Freedom Doesn’t Imply I Have to Retire Early

Let’s get this out of the best way now: I’ve no real interest in retiring early. I plan to work till I’m 65 after which stay off my 401(okay) and inventory choices, with supplemental earnings from a rental property.

I do know a number of folks my age or youthful residing the FIRE life-style and plenty of extra with that aim in thoughts. That’s nice for them, and I’ll all the time supply encouragement alongside the best way. However that’s not for me. I’ll by no means be a Brandon Turner or Josh Dorkin and even somebody with a portfolio that’s a fraction of their measurement.

Don’t get me incorrect: There are positively instances I want I lived in a tropical paradise with no care on the planet apart from if the Eagles are going to win this weekend. However for each irritating day at work, there are twice as many days after I really feel empowered and enthusiastic about what I do. I get pleasure from my W-2 job, and I’ve no plans to present it up, not less than anytime quickly.

This implies I’m not actively on the lookout for my subsequent deal or alternative to increase. I may all the time level to excessive rates of interest or housing costs as my purpose for standing pat, though sensible traders know the market is cyclical and wealth will proceed to develop with time. Plus, there are all the time good offers if you understand the place to look.

For me, although, I’m not scaling as a result of I actually don’t must proper now to have my model of monetary freedom.

My View of Monetary Freedom Is Extra Low Key

My concept of monetary freedom is easy: Since I’ve no plans to surrender my full-time job, I don’t want to switch that earnings. I simply wish to earn sufficient extra cash to pay for one unimaginable trip annually for my household.

Spending time with my household and having fun with experiences collectively are essential issues to me. I’m in a lucky scenario the place I actually don’t fear about cash on a day-to-day foundation, because of a well-paying job and cautious budgeting.

The one time I really feel financially confused is when I attempt to plan a visit to a novel vacation spot. I intention to make use of my rental earnings to cowl this expense, releasing me from that monetary burden. In different phrases, it’s offering me with monetary freedom.

Dave Meyer has a brand new e book being launched subsequent yr known as Begin with Technique: Craft Your Private Actual Property Portfolio for Lasting Monetary Freedom that additional validates my pondering. I lately had the consideration of studying an early draft, and it’s really incredible.

One of many key tenets in his e book focuses on discovering your values and constructing an funding technique round what’s essential to you. And that’s precisely what I’m doing to succeed in my aim.

Am I Ignoring Frequent Sense?

You’ve most likely been screaming at me the entire time you’ve been studying this. I can hear you saying issues like how my cash can develop exponentially with extra investments and the way I can nonetheless have my trip fund whereas on the similar time constructing my wealth for the longer term. And also you’re not incorrect.

The property I plan to lease is my fiancee’s main residence, not less than for an additional month or two. It has a low remaining mortgage stability (and rate of interest) and has unimaginable fairness. It’s additionally in some of the in-demand neighborhoods in Atlanta, so discovering certified tenants will possible not be a difficulty.

I’ll admit that is all speculative since we’re nonetheless prepping the property to lease. Nevertheless, with out sharing the small print, we’ve crunched the numbers a couple of other ways and are assured we are able to fund our aim with simply this one property.

If we needed, we may completely use among the fairness to fund one other deal and scale. Even with the extra mortgage obligations, we’d nonetheless generate money circulation on the unique funding whereas incomes an extra return on the second property over time.

However this doesn’t align with my present targets, so I’m not going to do it. But.

The Backside Line

So who’s proper right here? I’m proper. And also you’re proper.

Since there’s no one-size-fits-all method to actual property investing, it’s as much as every particular person to find out what monetary freedom is and the right way to get there. Simply because my technique doesn’t align with yours doesn’t make both of us incorrect. It simply makes it completely different.

I’ll be the primary to level out that my technique is predicated on my present aim. And I do know my aim will possible change a couple of instances within the subsequent 25 years earlier than I retire. That’s a bridge I can cross later.

However for now, that is my plan, and I’m sticking with it.

What do you suppose? Pontificate within the feedback beneath.

Early monetary freedom is feasible.

Constructing wealth is all the time attainable, even whereas working full-time, incomes a median earnings, and paying off debt. Set for Life offers younger professionals the motion plan they should conquer their monetary targets and obtain early monetary independence.