Tag: retire early

Can I Retire at 55? Tips for Early Retirement
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
If you'' re thinking about retiring at 55, you intend to beware concerning where you obtain your advice and support, which'' s since a lot of retirement guidance is geared toward those who retire quite a bit later, as a matter of fact … Most individuals retire at 62, yet things will be various for you if you'' re going to retire at'55. That'' s what we ' ll talk concerning for the following pair of minutes right here, we'' ll go over where you can get the cash from, and just how that functions with tax obligations as well as health care, then we'' ll appearance at some real numbers and also what it might look like for someone who retires at age 55. We might likewise intend to obtain philosophical simply quickly and ask the question, Why age 55? Yes, it'' s a good round number.And there are some fascinating tax methods that are readily available around that age, however allow ' s state you could retire a little earlier at 54, would certainly you wish to make that take place? Or if you worked a couple of more years … I recognize you ' ll believe this is insane, yet if you'functioned a number of even more years and also you could not influence your finances, but still take a few of those dream holidays as well as hang around with loved ones, would certainly that be worth it to maybe function until 59, for instance? So we want to figure out specifically why you are pursuing a specific goal and after that we can boost the opportunities of success for you, so let ' s begin with wellness insurance coverage, this is a challenging one because you'' re retiring a fair bit earlier than lots of people that could be near that Medicare age, so you have a variety of different options to continue being covered, and also it is an excellent concept to have actual medical insurance coverage simply in case something happens.So a couple of your options include, top, you can continue your present advantages from a job if you have them for as much as 18 months in many instances, and that ' s under COBRA or your state ' s continuation program, that can get quite pricey due to the fact that you ' re mosting likely to pay the full price', if you weren ' t currently doing that, plus possibly a teensy little bit additional for administration, but it is a way to proceed with the program that you currently have, to ensure that can be handy if you are mid stream in certain treatments or if it ' s mosting likely to be hard to get certain benefits that you currently have on a different health and wellness care program, however, that ' s not normally a long-term service due to the fact that we need to obtain you till age 65, which is when the majority of people enroll in Medicare, as well as you must see your prices drop a fair bit at that factor, perhaps depending on what occurs, so one more solution that a great deal of people check out is getting their own insurance coverage, which happens generally via a medical care industry or an exchange, and also that ' s where you just by coverage with an insurance policy company.So you can go straight to the insurance providers, yet it ' s typically a great suggestion to undergo … Begin at healthcare.gov,
and also after that experience the industry or the exchange, which means you can go shopping some strategies as well as potentially, depending upon your revenue, you can possibly obtain some cost decreases that make it a great deal extra inexpensive, I ' ll talk much more regarding that in a second, yet an additional choice is to switch over to a spouse ' s plan, if you occur to be wed which individual has coverage that ' s going to proceed'for whatever reason, that may additionally be a solution for you, when you leave your'job, maybe a certifying occasion that allows you to get on that person ' s program, however allow ' s chat even more concerning conserving cash on healthcare expenditures before age'65, the majority of individuals are going to get a policy based on the aspects that are most vital to them, to make sure that could be the costs or the out of pocket optimum, the deductible, the co pays, specific locations of protection, all that kind of point, you can pick a plan that fits your needs.Now, you could locate that those often tend to be fairly costly, as well as so if your revenue is listed below particular degrees, you may be able to get successfully a reduction in the costs, it may be in the form of a tax obligation debt or an aid, so right here ' s just a preview of just how things can seek you, let ' s claim your income is, allow ' s say 50,000 in retired life, and'you need to look at specifically what income means, yet there is no insurance coverage readily available from a spouse, we ' ve obtained one adult, and also let ' s claim you are … As our video recommend age 55 below, so you may obtain an advantage of roughly 422 a month, suggesting you might invest that much less every month, which ' s mosting likely to make it a great deal easier to pay for'insurance coverage on these plans, if we switch your income down to 25,000 per year, the assistance is also bigger, so as you can see by varying or regulating your revenue, as well as this is something you might have some control over if you retire at 55, you can additionally control your healthcare expenses, we ' ll talk about some conflicting goals here, where you may not wish to definitely lessen your income throughout these years, however this is essential for you to understand if you ' re mosting likely to be paying for your own insurance coverage, as well as if you'' re experiencing sticker label shock when you see the prices …'By the means, I ' m going to have a web link to this and also a bunch of various other sources in the summary listed below, so you can have fun with this same calculator yourself.Now, once you ' re on Medicare, the expense must go down a fair bit, this is a calculator from Integrity where we can'say, let ' s state you are a woman, and we ' re going to claim you ' re eligible for Medicare at this point, so we'' ll bring you'approximately age 65. It is mosting likely to be quite a little bit greater expense,'if you look at it prior to age 65, which ' s due to the fact that you are paying for those personal policies from insurer, allow ' s claim you ' re mosting likely to live until age 93, therefore you may expect to invest approximately 5800 6000 dollars per'year, depending on your wellness as well as your area and also various other aspects, it might be essentially, but this is a price quote of what someone may invest, a solitary female each year in retired life, naturally, that number is going to boost annually with rising cost of living and also deteriorating wellness issues. This is a ball park estimate of what you might be investing in the future, now we get to the inquiry of, do you have the economic resources to retire at 55? Which comes down to the earnings and also the possessions that you ' re mosting likely to draw from to offer the resources you require to buy the important things you'want as well as require, and also one method to look at this is to claim We intend to avoid early withdrawal fines due to the fact that once more, you are retiring at an age that ' s earlier than the regular senior citizen and also a lot of retirement accounts are made for you to take withdrawals at 59.5 or later on, to stay clear of those fines, the good news is, you have a number of options, so with private and joint accounts, simply taxed brokerage firm accounts, you can normally withdraw from those with no charges, however you might have funding gains taxes when you sell something, those taxes might go to a lower price than you would certainly pay if you take big withdrawals from pension, yet you just wish to double and also three-way check that, yet that can be a fluid resource of funds.You. Can also generally take out from Roth accounts pretty conveniently. So those routine payments come out initially, simply put, you can draw out your normal payments at any type of time without taxes as well as no penalties, what that indicates is that ' s the yearly restriction payments you may have been making her by year, so the 7000 per year, as an example. That cash would be easily obtainable, but if you have various other money types like Roth conversions, for example, you ' re going to be really careful and get in touch with your certified public accountant and also discover out what every one of that could look like. There. Are various other methods to access funds that are within pre tax retired life accounts, as well as it might actually make good sense to draw on those somewhat, we ' ll talk a lot more regarding that in a minute, yet these are a few of the tricks you can make use of to stay clear of an early withdrawal charge yet still attract on those assets prior to age 59.5. The very first one is the so called guideline of 55, so this uses if'you work at a work with, allow ' s state a 401K, as well as you quit working at that company at age 55 or later, if you fulfill particular requirements, after that you can withdraw those funds from the 401k so they go straight from the 401k to you.They wear ' t go over to an individual retirement account, you could withdraw those funds without a very early withdrawal fine. A difficulty below is that not every employer allows you to do that, so 401k strategies can establish a lot of their own guidelines, as well as among them could be that they wear
' t allow you just call them up and take cash whenever you desire, they may make you … Withdraw the whole amount, so if that ' s the situation, this isn ' t going to work, so make sure to triple contact your employer and also the plan vendors as well as figure out exactly just how this would certainly function logistically or if it will also function. Next, we have SEPP that stands for significantly equivalent periodic repayments or rule 72. This is a chance to attract funds from, let ' s say your IRA or a certain IRA that you choose, but prior to age 59 and also a half without getting early withdrawal penalties.Now, this is not my preferred selection. I don ' t always suggest this extremely typically in all, as well as the reason is because it ' s simple to slide up and also end up paying tax obligation charges. The factor for that remains in part that it ' s truly rigid, so when you establish this, You compute a quantity that you have to take out yearly, and also it has to be the'very same quantity every year, as well as you have to make certain you do that for the longer of when you turn age 59 1/2 or for five years. And also also that seems type of simple, yet it ' s still simple to trip'up, and you likewise have to stay clear of making any type of modifications to your accounts, so it ' s simply truly rigid as well as can be hard to stay with you, so … Not my favorite option, but maybe a choice. Those of you who work for governmental bodies, maybe a city company or something like that, you could have a 457b strategy, as well as those strategies do not have early withdrawal penalties prior to 59 as well as a half, so you can withdraw cash from that as well as utilize some income, pre pay some taxes, and also have some money to spend relatively conveniently, this incidentally, is an argument for leaving cash in your employer ' s 457 versus rolling it over to an IRA, because once it visits an IRA, you undergo those 59 1/2 policies and a possible early withdrawal penalty.So that could end up leaving you with 72 to deal with, as an example, which once more is not optimal. You might be asking, well shouldn ' t I just reduce'tax obligations and also hold off on paying taxes for as long as possible? As well as the response is not necessarily. It can make sense to go ahead and also pre pay some taxes by obtaining calculated, the reason for that is that you will at some point have to pay tax obligations on your pre tax cash as well as it could occur in a huge lump, as well as that can bump you up right into the highest tax obligation brackets, so it can be far better to smooth out the price at which you attract from those accounts as well as with any luck keep yourself in reduced tax obligation brace, at least reasonably speaking.So when your RMDs or your required minimum distributions kick in after age 72 under present regulation, that could potentially bump you up into the highest tax obligation brackets, possibly you want to smooth points out as well as take some income early. So let ' s take a look at the inquiry of, Do you have enough with some specific numbers, and prior to we eye those numbers, just wish to mention that I am Justin Pritchard. I help individuals prepare for retirement and also spend for the future. I ' ve got some great resources, I think, in the description below, several of the important things that we ' ve been chatting regarding right here today, as well as some general retired life intending information. If this is on your mind, I believe a great deal of that is going to be really useful for you. Please have a look at that and also allow me recognize what you assume of what you discover. It ' s also a great time for a pleasant pointer, This is simply a brief video clip, I can ' t possibly cover whatever. Please three-way and quadruple check'with some experts like a Certified public accountant or a financial consultant before you make any type of decisions, so allow ' s get back right into these questions, Do you have enough? As we constantly need to discuss, it depends upon where you are as well as exactly how much you invest as well as how things benefit you.Are you fortunate to retire into a good market, or are you unfortunate and also retiring into a negative market? All of these different facets are mosting likely to affect your success, but allow ' s jump over to my monetary preparation tool and also take a look at an instance. This is just a theoretical example, it ' s the world ' s most over streamlined example, so please keep that in mind, with a genuine individual, we ' ve got a lot much more taking place. The world is a complex place and
points get messier, however we ' re keeping it very easy below, just to chat about an instance of how things might look, so he or she has one million in pre tax possessions as well as 350,000 in a brokerage firm account, as well as if we just swiftly look at their dashboard right here, quite high likelihood of success, so allow ' s make it'a little bit'extra interesting and state … Maybe that individual retirement account has, let ' s state, 700,000 in it. What is that going to do? As well as incidentally, this is still a great deal greater than a great deal of individuals have, but once more, if you ' re going to be retiring at 55, you usually have rather low expenses and/or a great deal of assets.So let ' s remember here that retirees wear ' t always invest at a flat inflation changed level, and I ' ll get right into the assumptions below in a second, yet let ' s just take a look at if this individual spends at rising cost of living minus 1 %using the retired life costs “smile,” that significantly improves their opportunities, and I ' ve obtained video clips on why you may consider that as a potential reality, so you'can check into that later on at your leisure, yet as for the presumptions, we presume they spend about 50,000 a year, retire'at age 55. The returns are 5.5 %per year, and also inflation is 3%per year. Wouldn ' t that be freshening if we got 3%… So we eye their earnings below age 55, absolutely nothing', and afterwards Social Safety and security starts at 70. They ' re doing a Social Safety and security bridge method. I ' ve got video clips on that particular as well, or at the very least one video, the complete year starts here later, and also after that their Social Protection change for rising cost of living, considering their taxes, we have absolutely no taxes in these earlier years since they are just not pulling from those pre tax obligation accounts. Maybe not getting much, if anything, in regards to capital gains,'perhaps their reduction is wiping that out, so we might have a possibility right here to in fact do something and also once again, pre pay some tax obligations and pull some taxed revenue'forward.In reality, if we eye their federal income tax bracket, you can see that it ' s fairly reduced from 55 on, possibly they desire to draw some of this earnings ahead to ensure that later on in life, they are drawing whatever out of the pre tax obligation accounts simultaneously. It just depends on what ' s essential to you and what you intend to attempt to do, and that brings us to some tips for doing calculations, whether you are doing this with somebody, an economic coordinator or on your own, you intend to consider that space in between when you quit working as well as when your earnings advantages start from, allow ' s say, Social Protection, there ' s also that space between when you stop functioning and also when Medicare starts, and also that ' s an additional essential thing to check out, yet what are your approaches available there? Should you take some income, and precisely how much? That ' s going to be a location where you might have some control, so it ' s worth doing some excellent planning.We also desire to look very closely at the inflation and also investment returns, and also what are the assumptions in any kind of software application that you ' re making use of? These are truly important inputs and also they can considerably transform what takes place …'You saw what happened when we switched over from a level rising cost of living modified boost annually to the retirement costs smile, simply a refined little adjustment has a big distinction on how points unfold, as well as in that circumstance, by the means, we would normally have healthcare boosting at'a much faster rate.But like I said, we use an over streamlined example and didn ' t necessarily consist of that in
this case, yet you do intend to click via or ask concerns on what exactly are the presumptions and also are you on board with those assumptions?'You might additionally need to make some changes, and also this is just the fact of retiring at an early age when you may have 30 plus years of retired life left, a lot can happen, and there really is a whole lot of benefit to making small changes, particularly during market collisions, for example, so. If things are not necessarily going terrific, some little tweaks might possibly enhance the possibilities of success considerably, that might imply something as easy as avoiding a rising cost of living modification for a year or 2, or maybe dialing back some holiday spending.These are things you put on ' t intend to do, that ' s for certain, however with those little changes, you can potentially keep things on the right track, and that method you put on ' t need to go back to function or make bigger sacrifices. And also so I wish you located that valuable. If you did, please leave a fast thumbs up, thanks as well as take treatment.
Yes, it'' s a great round number.And there are some intriguing tax obligation approaches that are available around that age, however allow ' s state you could retire a little bit previously at 54, would certainly you want to make that occur? A problem below is that not every company allows you to do that, so 401k strategies can set a lot of their own policies, and one of them might be that they wear
' t allow you just call them up and take cash whenever you want, they could make you … Withdraw the whole quantity, so if that ' s the case, this isn ' t going to function, so be sure to three-way check with your employer and the plan suppliers and locate out precisely just how this would certainly work logistically or if it will certainly also function. It simply depends on what ' s important to you and also what you desire to attempt to do, as well as that brings us to some ideas for doing estimations, whether you are doing this with somebody, an economic planner or on your own, you want to look at that space between when you stop working as well as when your revenue benefits start from, let ' s claim, Social Protection, there ' s also that void between when you quit functioning as well as when Medicare starts, and that ' s one more essential point to look at, but what are your techniques readily available there? That ' s going to be an area where you might have some control, so it ' s worth doing some excellent planning.We additionally desire to look very closely at the inflation and also financial investment returns, and what are the assumptions in any software that you ' re using? If points are not necessarily going great, some little tweaks might potentially enhance the opportunities of success significantly, that might mean something as straightforward as skipping an inflation adjustment for a year or two, or possibly calling back some trip spending.These are points you wear ' t want to do, that ' s for certain, yet with those little changes, you can potentially keep points on track, as well as that way you put on ' t have to go back to work or make larger sacrifices.
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Our $3.7 Million Fat FIRE Strategy | New Investment Strategy to Retire Early by 45
Jason 0 Comments Career after Retirement Retire Wealthy
In september 2021, i published a video about our fat fire strategy in the amount of 2 8 million dollars and that video is still by far the best performing video, and it was like the 15th video i’ve ever made for this channel with less than 150 subscribers, our fat fire strategy, became the core of my youtube channel here at fireside chat and that video had a complete breakdown of our fire expenses like housing, health care and discretionary like travel, entertainment and fine dining. A lot has changed since that video was published in september 2021. We’re seeing a high inflation rate, like we’ve, never seen before, unless you’re a baby boomer who experienced high inflation in the 70s, the stock market, like the s p 500. Dow and nasdaq is down 20 25 or even 30 since the beginning of 2022. I also had a significant life event and i recently got married to my beautiful wife, whom i dated for over four years, and we’re still fine tuning our fat fire strategy to make sure that we can retire early together for uh by age 45. After doing several fat fire calculations based on our income, expenses, inflation and investment, we’re going to have to change our fat fire number from 2 8 million dollars to about 3 7 million dollars, and this is the most conservative conservative fat fire number. We came up with and we would also like to live in several locations and not just stay in one place during our retirement, which will increase our baseline expenses. If you’re brand new to my channel, my name is sai and welcome. So in this video. I’m gon na go over how we’re investing to achieve fat fire of 3 7 million dollars and how we’re, prioritizing our savings and investment based on our future expenses, so we can retire early from the 95 workforce. This is a juicy video and i hope you get a lot out of it. Also don’t forget to check out my grammarly affiliate link in the description below so the first thing we had to figure out was our fat fire number. Now we have several fire strategies like lean fire, which is for people who want to live a minimalistic lifestyle coast fire, which is for people who want to coast into normal retirement and barista fire, which is for people who want to take a part time job to Pay for health care expenses, while using their nest, eggs to pay for their retirement lifestyle, be sure to check out those videos, and i will put those links in the description below but fat. Fire is the lifestyle we want where we can truly enjoy our lives by traveling, the world and living in several locations. We don’t know what those countries are just yet, but we plan to travel overseas at least once or twice a year to do some research. So the first thing we have to do was to figure out our annual expenses. Originally, we would have been happy with just 100 000 a year in passive income using the 4 withdrawal rate. So what that means is that, with a 2 5 million dollar investment portfolio, we would withdraw 4 of that portfolio every year in the amount of one hundred thousand dollars. We would also have uh three hundred thousand dollars or ten percent of our total portfolio in cash or cds on the sideline. In case we experience a bear market, like we’re, seeing now in 2022, so we wouldn’t have to sell our stocks at a loss from our investment portfolio. Our baseline expenses will increase based on inflation, but that doesn’t mean every single expense. In our household is going to dramatically increase our mortgage payments, for example, will remain the same because they would be at a 30 year fixed mortgage rate, and another possibility is that we pay off our home completely if the mortgage rate stays above six percent for the Next 10 years, which would suck, in my opinion and, however, paying six six percent interest for our primary residence, wouldn’t be worth it anymore. If the stock market performs seven percent on average annually, even if the market performs 10 annually, the margin isn’t wide enough for us to justify to keep making mortgage payments. Then let me know in the comment section down below if you have a different, take or different approach on our strategy, i would estimate our baseline expenses between housing utilities, transportation, groceries and healthcare expenses to be anywhere around 50 and 75 000 a year based on a Three percent annual inflation rate and the only wild card we have is healthcare, and i can only imagine our healthcare expenses to continue to increase over the coming years and especially if we decide to retire in the us. We’re also going to have several properties in different states or different countries, and that will increase our basic housing expenses with our fat fire number at 3, 7 million dollars, the 4 withdrawal rate will be 148 000 a year. The 3 withdrawal rate will be around 111 000 a year if we end up not spending too much money due to a bear market or other short term catalysts. After the baseline expenses, we could spend anywhere between 36 and 61 000 a year on travel and entertainment. Keep in mind that we’re going to recalculate our fire number every year, based on our future expenses and inflation, make sure to watch the entire video, and i will show you our passive income sources and the investment strategy by the way. If you need help creating your own fire strategy, you can schedule a free one on one 20 minute financial coaching session by visiting fischer com, coaching for our fat fire strategy. We’re going to prioritize our savings and investments in this order. Cash for annual expenses like taxes – and we want to have at least 10 to 15 percent of our net worth in liquid assets. So if our net worth is a million dollars, then we want to have at least one hundred thousand dollars in cash or cash equivalent assets. The second priority is our retirement accounts like tsp pensions, iras and hsas, and i will talk more about that in a little bit. The third priority is our non retirement assets like the taxable brokerage accounts for our early retirement between the ages of 45 and 60. The fourth priority is our travel fund, entertainment and our daughter’s college fund. I also have a fire checklist that we follow and you can download for free by visiting fightcech com contact. We have our emergency fund in a completely separate savings, account that we do not touch unless it’s for emergency medical expenses or anything else that’s unexpected. Our rule is that we only use it if it’s an unexpected emergency, and i strongly encourage you to check out this video i made about the emergency fund and i will link that video in the description below just keep in mind that the differences between A rainy day fund and an emergency fund is that in a rainy day fund you need to cash right away for a blown tire, and an emergency fund is to cover your living expenses. While you’re looking for a new source of income and since we’re debt free and we have a fully funded emergency fund, we maxed out our tsp iras and hsas between my wife and i we contribute up to 50 000 a year, including our Employer matches and she has the nevada state pension fund, which is a lot different than the traditional retirement accounts like 401k or tsp. She contributes 15 of her income and her employer makes a 100 match to her personal contribution, and i can contribute up to 20 500 and another eight hundred dollars from my employer match to be exact. We contribute a total of forty, nine thousand six hundred and thirty one dollars, and we expect the contribution limits to increase over the years. We also prioritize our roth iras and since we exceed our roth ira income limits, we have to do what’s called a backdoor roth ira, and i will link that video in the description below we each contribute six thousand dollars to our traditional iras as non Deductible contributions and then we convert the six thousand dollars to our roth iras. That’s a total of twelve thousand dollars between the two of us and just keep in mind that the rules for roth iras are different like contributions, conversions and earnings. And i strongly encourage you to watch the video about the five year conversion ladder, so you have a better understanding of the roth ira conversion rules. We don’t plan to touch our roth iras until we’re in our 60s or 70s, because we want our roth ira race to grow tax free as much as possible and as long as possible. We expect to have about four million dollars total in our roth ira race. By the time we turn 60 Hsa is another investment account that we own through our employers, and i understand that not everyone is eligible to contribute to the hsa, especially if you have tricare hsa stands for health savings account and it’s completely different from the Healthcare fsa, which stands for flexible savings account and the hsa comes with triple tax advantages, so we can contribute to it in pre tax dollars, which lowers our taxable income. We can invest what we put in the hsa into an index fund like the s p, 500 index fund and the interest and earnings will grow tax free. We can also withdraw from our hsa tax free as long as as we use it for medical expenses and we keep every receipt from medical, dental and vision expenses we paid in cash, so we can get reimbursed for those expenses during our early retirement. When we turn 65, we can withdraw from our hsa for non medical expenses and only pay federal income taxes for the withdrawals. Since we file our taxes jointly, we contribute up to 7 300 a year for our family hsa. If we don’t make any withdrawals during our early retirement, we should have about two hundred and fifty thousand dollars by the time we turn 50 years old by age 65. We should have 1 2 million dollars in our hsa, with a 10 average annual rate of return between tsp state pension funds, uh roth iras and hsas. We’re contributing a total of 68 931 dollars just for the year 2022 and we’re expecting the contribution limits to increase, at least for the next few years, due to high inflation hsa’s contribution limits for 2023 is already increased from seventy. Three hundred dollars to seventy seven hundred dollars. I expect the contribution limits for iras to increase from six thousand dollars to possibly seven thousand dollars and 401k or tsp from 20 500 to possibly 21 500. We also contribute to our non retirement. Investment accounts, like the taxable brokerage accounts. We have one brokerage account that only invests in aggressive and high growth stocks. We have another brokerage account that only invests in income based stocks that pay quarterly dividends to their shareholders. We’re hoping to consistently invest 50 000. A year into these taxable brokerage accounts so that by the time we retire early in 2032, we would have at least one million dollars in our dividend: stock portfolio and another million dollars in our growth stock portfolio. If we maintain a four percent annual dividend yield in one of those accounts, we should make forty thousand dollars a year just in dividend income and keep in mind that the tax rate for dividends is also different from the federal income tax. We expect to have minimal earned income, and that puts us in that zero percent capital gains tax category based on my calculation, and if we make less than eighty four thousand dollars a year in earned income, our dividend tax rate should remain zero percent. As long as congress, doesn’t mess up mess up our tax rates, our goal is to minimize our taxes as much as possible during our early retirement. So now let’s go back to my fire checklist for a minute and we’re already saving over 60 of our income towards our retirement and non retirement accounts and whatever we have remaining usually goes to our travel and entertainment fund. And we call that our sinking funds – we’re, currently saving anywhere between 10 and 15 000 a year into our travel fund, and if we decide to travel more or our income continues to increase, then we’ll bump it up to our uh, maybe 20, To 30 000 a year, we’re also contributing to our daughter,’s. 529. It it’s projected to cover a significant amount of expenses for college tuitions. We’re not too worried about her college tuition because i already transferred my post 911 gi bill over to her and several years ago, and even if my daughter ends up not using the 529 college fund, i can change the beneficiary to my future grandkids or Even to myself, if i want to by the way you can get our free fire resources, including these spreadsheets, by visiting fischer com contact, you can also check out the fight such as shop, and i have all of my stuff on my bookshelf. At firesidechat com shopping. Now let’s talk about our income sources during our early retirement, if 2022 taught us anything and that is to diversify our income sources, so we don’t have all of our money in the stock market with 3 7 million dollars our net worth should Be anywhere between six and nine million dollars, one of our main sources of income is our dividend, and i’m gon na be very conservative here and say we’ll make anywhere between 40 and 50 000 a year in dividend income just from our taxable Brokerage account at the same time, we’re going to convert what we have in our traditional retirement accounts to our roth iras and that will trigger a taxable event right. However, since our earned income is zero because we will be retired, every 50 000 we convert from our traditional retirement accounts will be taxed at 12, as opposed to 32 percent based on our current income. So for every conversion we make from a traditional to a roth account there’s a five year waiting period before uh before we can withdraw that conversion, completely tax free from our roth ira. So what we’ll need to do is have extra cash to cover expenses during the first five years of conversion to keep our taxes at the lowest rate possible. So when we convert fifty thousand dollars in the year 2032, we will have to wait until january. First, 1st 2037 to make the 50 000 withdrawal completely tax, free and penalty free. We just need to make sure that we have enough cash or other income sources to cover between 2032 and 2037. This is a common fire strategy that early retirees use. So i strongly encourage you to check out this video about the 5 year conversion ladder. We prioritize our retirement accounts over our non retirement accounts because our retirement accounts, like the tsp pension fund, iras and hsas, are like a full back plan. If we decide not to retire early and we want to grow our tax advantage, retirement accounts as much as possible, so we can retire comfortably when we turn 60 years old, completely. Tax free and our primary focus is building our stock market and real estate portfolios. To make sure the money can last during our early retirement between the ages of 45 and 60, consistency and patience are the keys to our financial success. We’ll always invest up to the maximum contribution limits to our tsp ira and hsa and will save at least half of our income to both retirement and non retirement accounts. Whenever we experience a bear market like in 2022, we’re excited to invest in these stocks with a discount and it’s like going to a black friday sale at best buy and what’s different about this bear market is that we’re Dealing with high inflation as well, we increased our fire number because the prices we’re seeing now should be the prices we see five years from now, and i think a lot of these expenses are already priced in and we’re not going to see Much of a decline in the future, but instead there will be a slowdown in the inflation rate in 2023 and possibly into 2024. This is why budgeting is so important for everyone who is pursuing financial independence and retiring early from the 9 to 5 workforce, and if you want to know more about how to invest for your future, be sure to check out these two videos so that’s It i appreciate you watching my video don’t forget to subscribe and i hope to see you in the next video have a good one Music. You

Planning Your Retirement? Watch Out For These 3 Common Mistakes! | Retirement in Canada
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
That '' s Exactly how Bad Guidance Spreads Individuals maintain making usual mistakes.If you make these errors, it ' s not your fault. That ' s why I wear ' t like this technique. There you ' ll locate me talking in detail about some of the retirement problems I ' m having today.
Every person'' s retired life is various. That '' s Just how Bad Guidance Spreads People keep making usual mistakes.If you make these mistakes, it ' s not your fault. Allow ' s obtain into three of the most common errors as well as assist you intend a far better retirement. That ' s why I don ' t like this technique. There you ' ll find me speaking in information about some of the retirement problems I ' m having today.

How to Retire in 9 Years Starting With ZERO (A 5-Step Guide)
Jason 0 Comments Career after Retirement Retire Wealthy
are you over the age of 50 with no plan in sight for your retirement don't worry there's still hope it's never too late to get started hey guys welcome back to the channel in today's video we're going to teach you some tips on how to plan for your retirement even if you are starting late in life first of all you need to know that retirement is freedom which means that when you retire you should be able to do whatever you want whether to travel to your favorite destinations spend more time with your family or work on your own projects so let me take you through the steps of your journey to financial freedom first step is to cut your expenses write down all your monthly expenses think of your main fundamental expenses as your running cost as if you're running a company things like rent builds groceries internet so you can watch more of our videos and car payment remember that you could always find cheaper alternatives for some of your main expenses for example you could always move to a cheaper house and save on your rent or if you have a rental car you could rent a cheaper car that also matches your needs the key here is not to minimize your quality of life but to minimize the amount you spend on that quality now write down the other expenses that you could survive without this might differ from one person to another it could be your netflix or amazon prime subscription or it could be the designer clothes that you usually buy these are the items that you could totally scratch from your expenses the more you cut the more you save and in the fifth step i'm going to tell you how we are going to use all this extra money to get you even more money always remember that it's not about how much you earn is what you keep you could be earning much more than others but you're also spending much more than they do keep monitoring your expenses you can do this through a simple written list or even through apps such as zoho expense or expense point second step is to set your expectations remember when we said in the beginning of our video that retirement is freedom well you need to think of your freedom figure which is basically the amount of money you expect per year after your retirement now multiply this number by 25 i'm sure you will get a crazy seven figure number this is going to be your goal i bet you're thinking now that it's impossible but please don't close the video yet because in the last two steps i'm going to show you how you can make this possible you need to lower your expectations for the time being in order to get those results in the future it's a match a fight if you will wealth versus cash flow set your own goals for now and for the future not based on what you see around you or on social media it doesn't have to be a 25 million dollar mansion in beverly hills a huge yacht and a supercar but that doesn't mean you shouldn't be enjoying your retirement it's about being realistic and aware of your situation what you can achieve in the future third step is to consider working longer now i know what you must be thinking i'm watching this video to know how to retire early but bear with me you may retire by the age of 60 or even 65.
But if you retire by the age of 70 you are increasing your social security check to nearly double plus there's also more money going into your 401k what's 401k oh you didn't know well i will explain this in the next step if you can't bear the thought of staying at your current job any longer than you need to then you should look into quitting your current job and finding another one something that you will enjoy more you you'll be surprised at the amount of companies that are currently looking for workers with experience be aware of your physical health keep up with your regular medical check-ups eat healthfully do any form of physical exercise could be something as small as taking a relaxing walk every day all this keeps you energetic so that you may continue working at the top of your game fourth step is to open an investment account this account could be funded by the money you save as a result of cutting expenses remember step one or you could open a 401k account if you don't already have one a 401k plan is a company sponsored retirement account where employers can contribute their income and employers usually match contributions up to a certain amount there are two basic types of 401ks traditionally and roth which differ primarily in how they're taxed with a traditional 401k employee contributions are pre-tax meaning they've reduced taxable income ban withdrawals are taxed during retirement employee contributions to rough 401ks are made with after tax income there's no tax deduction in the contribution year but withdrawals are tax-free so if you don't have a 401k yet what are you waiting for start one and make use of all this non-taxable income now it's time to invest your money which takes us to the last step the fifth and last step is to increase your income well you can always ask for a raise in your current job if the thought of asking for more pay sounds daunting then you can try looking for a new job with a better salary which may not be as challenging as you think there are many ways to promote your skills and experience to other companies you can upload your resume to sites such as indeed.com or linkedin.com let the companies come to you but there is an even easier way to increase your income through a side hustle one of the easiest ways to do so is through creating an amazon individual seller account it's free to create but you need to pay a commission of 99 cents for every sale that you make on amazon not intrigued yet hear this according to a recent survey of amazon sellers twenty percent make between one thousand dollars and five thousand dollars per month which i believe is great for a side hustle or even a decent second income you can even sell your own private label products on amazon around 67 percent of all amazon sellers run their business using the private label method private labeling is a process of manufacturing a pre-existing item preferably with product improvements putting your branding and logos on it and selling it to consumers sometimes it is referred to as wide labeling or brand creation the process has been around for years and is common in countless retail stores targets mainstays brand and walmart's great value are two examples of private label brands your site hustle could also be building websites or content writing there are millions of ways to start a site hustle it's all based on the set of tools that you possess be sure to check out my videos covering this topic and i'll post a link in the description below and remember you can always learn a new skill and this skill could be your next source of income so never stop learning another way to increase your income is by creating a passive income stream passive means you don't actually need to actively trade your time for money you are basically making money while you sleep there are three ways to earn passive income stock markets you don't need to call a local broker anymore there are plenty of applications that you can use to trade stocks that's what makes it the easiest way to gain passive income i'll post some links in the description below for some of my favorite exchanges that i use to trade stocks and crypto cryptocurrency is part of the new modern era with many ways for you to earn passively if you are willing to accept its high risk prices of cryptocurrencies including bitcoin have been falling in 2022 amid a worldwide crypto price crash this could also mark a perfect opportunity to buy with prices being so low check out this video i made where i go over the top five cryptos that billionaire kevin o'leary from shark tank is currently investing in but remember be wise when investing in crypto never put in more than you are willing to lose other options include real estate it's harder to get into it as you need to save up enough to pay for a down payment once purchase you can then get a tenant to rent out the house which will cover payments on the mortgage and hopefully a bit more use any cash flow to pay down the principal faster after a few years you will have paid off the house and can now enjoy some free cash flow from your rental property the earlier you start doing this the sooner you can pay off the mortgage debt now that we have been through each of the five steps of your journey to freedom keep this in mind your life is not going to change unless you take the initiative a nine to five job alone is not enough to build wealth have faith in yourself have faith in your abilities you're not alone in this situation and if other people can do it so can you improve your physical and mental health this will keep you more focused and energetic to work on your goals and it saves you from spending a lot of money down the road on treatment and medications this is it for me today i hope this video has given you as much hope as it did to me don't forget to hit the like button and subscribe to our channel watch our previous videos you never know what piece of information could change your life
Read MoreHow To Retire Early Through Property Investing | A Retirement Planning Pension Strategy
Jason 0 Comments Retirement Planning
Most people will likely consider it impossible when they come across this video’s thumbnail. However, I want to demonstrate how it is feasible to retire in two years by investing in a specific type of property, simply by taking action. My name is Tony Law from Your First Four Houses, and I coach individuals on how to construct a small property portfolio that produces a substantial income stream, enabling them to become financially independent and leave their regular jobs if they choose to. For 21 years, I worked in a kitchen business where I traded my time for money, but in under two years, I managed to substitute that kitchen income with a passive or relatively passive rental income. In this video, I’ll demonstrate how you can accomplish the same.
Now, let’s assume that you do not require 10,000 pounds per month to retire and live comfortably. The average household income in the UK appears to be between 28,000 to 35,000 pounds per year, depending on where you live, although living comfortably on that amount might be challenging for some. To keep things simple, let’s round it up to 42,000 pounds per year, which equates to 3,500 pounds per month in passive rental income. While some may think that figure is low, I believe most people could retire and live comfortably on that amount if they had no other expenses. So, we now have a clear objective to work towards.
When looking to earn a passive income of 3,500 pounds per month, the first step is to determine how many rental units are needed to achieve this goal. The number of properties required will depend on the deals and strategies employed, but for the purposes of this exercise, let’s assume an average cash flow of 500 pounds per month after all expenses. With this in mind, seven properties would be needed to generate 3,500 pounds per month. While this may seem daunting, it is achievable within a two-year timeframe with the right approach and effort.
Achieving a passive income of 3,500 pounds per month may seem like an impossible feat, but let me show you how it can be done. As a property investment coach, my goal is to help people build a small property portfolio that generates a great income, allowing them to achieve financial freedom.
To start, we need to break down the numbers. 3,500 pounds per month can be achieved with a portfolio of seven properties, each generating an average cashflow of 500 pounds per month. While this may seem daunting, I believe it can be accomplished in just two years with a ton of effort and action.
In the first year, you may acquire two to three properties, with the remaining four to five acquired in the second year as your experience and confidence grow. Although it won’t be easy, with hard work and dedication, you can achieve this target.
If you’re interested in learning about the 15 tasks you can do in the next seven days to help achieve your goals, check out my video. Property investing may require hard work, but the rewards are worth it. In just a couple of years, you can replace your income entirely.
To assist you on your journey, I have updated my 50 point checklist for buying investment properties. If you’re interested in receiving a copy, click the link provided or see the description box below. My goal is to help you achieve financial freedom through property investment.
As found on Youtube
Read MoreHow we Retired at 40..💰7 tips to succeed for Early Retirement💰
Jason 0 Comments Retire Wealthy
Hey guys retired at 40 I’m going on a little road trip today just me and Murph and last week I reached a milestone on my channel and I hit a million views total and 10,000 subscribers in the same week since I’ve been getting requests for quite a long time about how I retired at 40 and I’m on a long road trip right now I figured what better time to share the story so without further ado here’s the retired at 40 story so before I get started I want to say that this is not in any way a brag story in fact I’m definitely not a showy type guy I enjoy very simple things in life and money to me is more of just a vehicle to be able to retire young and have my family live a comfortable and an easy life and to be able to enjoy lots of life experiences and be comfortable in life before I’m old and gray so really the journey began in about 2002 graduated from Iowa State University with a degree in marketing and business and by that point I have met my wife Kelly she had already graduated from school and she was kind of waiting for me and we wanted to move west out of the Midwest to move west see some new territory and get closer to the outdoors so I grabbed my degree ran out the door packed up my 1987 Ranger fully equipped with eight foot hay racks full of all of my personal belongings and we drove to Littleton Colorado and at this point in my life I had $200 in my pocket and Kelly had about the same so being completely naive and basically completely broke but with a degree I was on the search for the best suit and tie job that I could possibly find so I bounced around for a couple months just working some kind of halfway jobs and I quickly realized that I did not want to wear a suit and tie and I wanted nothing to do with the man and working a nine-to-five job well Kelly had found a job in a real estate office working the front desk and she had become friends with a couple of the big-time Realtors there one of which you caught wind that I had some handyman type skills but he made me a deal that if he paid cash for a house and I fixed it up that he would split the profit with us 50/50 and at this point in my life all I saw was dollar signs if I was completely blown away that there was someone that could pay cash for a house this is coming from a guy who had less than $200 in his pocket at this point it was pretty much scraping by I tried to hold back my excitement to him but naturally I said yes please let’s do that I was working the graveyard shift at Target stocking shelves I’d worked for 10 hours I would go home grab a little bit of breakfast and I’d head over to the property and work on it for another five or six hours I try and catch a few hours of sleep and then I would rinse and repeat it was at this point in my life that I learned a few different things one you really have to dig deep to reach your goals in life because I was not getting paid by the hour and at this point I didn’t know how much money I was gonna make I didn’t know if I would make $500 when this was all done or if I was going to make $5,000 when this is all done so I learned that a lot of things that can benefit you financially you have to put in the work upfront without knowing what your final outcome is going to be after about three months which seemed like an eternity of working seven days a week for sometimes 15 sometimes 20 hours a day on this house the house was ready to go on the market and it was all finished it looked great and then before you knew it it’s sold and then the house closed and at this point I still didn’t know what we were gonna make off it but for me it didn’t matter the hard part was done I didn’t have any of my own money into it I just had my time basically so the guy we were doing the investment with hands me an envelope and I opened it up and at $8,000 being twenty-two years old and having $8,000 I might as well have hit the lottery and that brings me to my second valuable lesson that I learned and that is being responsible with money so when you have $8,000 and you’re 22 years old a lot of people would go buy a new car they’d go buy some flashy things some pretty things but to me I had realized that if I can make $8,000 once I can make $8,000 again and again and again and again so I can either go p*&% the $8,000 away that I had worked my a#* off for or I can take that $8,000 and do exactly what he did but do it myself and potentially make twice or three times as much money so my wife being in a real estate office we became acquainted with quite a few smart people financially smart people we learned a lot about real estate very quickly because we were willing to learn which is my next valuable life lesson is that you never stop learning so we took our $8,000 we put a small down payment on a condo in Littleton because we realized that giving someone else our money was you might as well be throwing it away we wanted to be working towards something and it own something on our own so we took our other four or five thousand dollars and we started our search for a real estate investment that we could do all of our all on her own and get a hundred percent of the profits so after some searching we did find a place we found a small town home it was not in as nice of area as we were living it was smaller it needed lots of work but that takes us to our next light life lesson that we learned and that is to sacrifice for a greater payoff in the future so we had only lived in our condo for a very short time but we realized that if we moved into the real estate investment that we could rent out the place that we are living at and move into the place that we were fixing up that we’d have to be paying a mortgage on anyway we had our first real estate investment and we had our first rental so being 22 years old and owning two properties and carrying two mortgages and at this point I’m still working at Target was a pretty scary proposition in life but all I could see was that $8,000 check they had started to change our lives I also want to point out and kind of give a shout-out to my parents and to my wife’s parents because neither one of our parents ever handed us anything in life they always made us work for what we achieved in fact when we move we tried to convince my parents to co-sign on our mortgage for the condo that we bought and they said no way at the time I was very very mad at them and I thought I would never forgive them in hindsight it was one of the best things they’ve ever done for me because it just made me have that fire in my belly and really just want to work to get what I wanted so back to having two mortgages that was a completely scary thing in my life I was making something like 10 dollars an hour at Target I think Kelly was making $13 an hour at the real estate office she was working at we could barely afford the condo we had but now he had two.
God bless the banks lending money to anyone at that point on the very plus side of that we learned that someone else can pay our mortgage and we’re basically getting that money for free and then later we figured out that there are many many many tax benefits and huge benefits of owning a rental property so we quickly learned that trying to pay for materials and the things needed to fix up an investment property on just barely over minimum wage is not easy to do the thing that happened next couldn’t have come at a more perfect time so all of a sudden I had money to spend to fix up this house and it would just get me to that next big paycheck that much quicker so that’s what we did we fixed up the house we doubled our money we rolled it into the next one so we kept bouncing from house to house quite a few times and that sacrifice of from going from a nice house to live in to going to a crappy house to live in to fix up to making it nice again to going to another crappy house to fix up it became pretty stressful but we always had our eyes on the prize “are you still with me Murph?” after doing this two or three times I remember getting a check for the last one and the check was forty one thousand dollars so at that point it didn’t make sense to work at Target anymore so I just started doing it full-time but we never took the big proceeds from the real estate and put it into our actual living we always rolled it into the next property and that kind of gave us the baseline of even how we live today we always live well below our means we take the money that we make and we put it into things that will make us an income not into something that will lose us money but you do have to treat yourself every once in a while otherwise there’s no reason to make the money in the first place Kelly saw many of the high producing Realtors making large amounts of money so she decided to get a real estate license and she created her own real estate business so now we really felt like we had the world by the balls because we were getting paid a commission to buy the property and then we were saving half of the Commission when we sold the property and I was fixing him up so we just get rolling our profits in rolling our profits in rolling our profits in until family we were able to buy a house and now that we could get a house we were playing with the big boys the profits were much larger but so was the risk and we really didn’t want to lose all the way it worked for for the last couple of years so we did a few houses and we made some great money but instead of selling them and pulling out our profits we kept them as rentals and it was at this point that we really started building up our rental inventory at this point it was about 2006 or 2007 and real estate was starting to slow down a little bit but we have purchased a large house I’m a courage that was really a big risk for us it was a large house to fix up it was our biggest project for sure it took us the most money to fix it up and we had the most money into it so we lived in this house for about 8 months while we were fixing it up and we kind of decided after doing about 12 properties that the moving all the time was starting to get kind of old and we were kind of getting older ourselves and we decided that we wanted to have kids and kind of settle down a little bit Murph are you with me? sometimes I feel like I’m just talking to myself so after the eight months was up we finished the house we sold it and shortly after the real estate market completely crashed the bubble had burst and Colorado was one of the hardest hit States we got out of the house just in the nick of time and not only did the real-estate market bubble burst we found out that we couldn’t have kids and it seemed like a real low point in our lives but around 2007 when all this happened we realized our next lesson with every negative there is a big positive that can be gained from it and you can just use it as fuel for your fire so the recession was tough we thought our great life had come to an end we thought we were gonna have to get regular jobs you know people were losing their jobs left and right people were losing their houses Colorado was hit very very hard one of the worst states during the recession and we learned that what goes up must come down and in this case it came down hard in many cases not just real estate when things are bad that’s the time to invest and if you’re smart with your money and you’ve been saving while everyone else spending that’s the time to benefit though from about 2008 to 2012 we were buying rentals so we were able to adapt I started doing contracting because that’s pretty much what I was doing before but now I had to be doing work for someone else and Kelly’s always been a mover and a shaker and even a bad real estate market she was able to keep her business moving we were buying things for pennies on a dollar and even though we were not making great money and in some cases losing a little bit of money on rentals we were able to stick it out and after lots of lots of years of lots of lots of heartache and lots of lots of doctors we were able to have two boys so about 2014/2015 real estate started creeping back up again prices kept going through the roof and just when he thought it was the peak they just kept going up stuff was flying off the shelves you could list a house and it would have multiple offers within 24 hours so we had about age 35 we were completely debt-free we had several rentals that we were cash flowing we didn’t owe any money on the rentals so all that money was just rolling into a bank account when you have no bills and you have an income coming in your net worth starts to grow very quickly so we rode out the storm Kelly’s business was doing great my contracting business was doing great we have liquidated a lot of our real estate in Colorado we had capital to play with we had two beautiful young boys and then I fell to my knees crying like a little baby I had herniated a disc in my back and I was on a walker for about a month contracting for me was out of the question I didn’t even want to think about picking something up so I took some time off and I raised our kids which at first I thought would just be for a few months and then a year passed and then another year passed and I decided that I kind of liked it we had rental income coming in Kelley’s business was doing better than it had ever been in fact she had started her own she had several people working for her and just as a little side income I got to do what I love to do which is antiques I was just buying and selling antiques so we were trying to be very strategic at this point because we owned a fair amount of property in Colorado but we knew that our ultimate goal was to retire at 40 and at the rate things were going up we didn’t want to sell too early because we didn’t want to miss out on that upside but we didn’t want to sell too late because we didn’t want to risk the chance of taking a step back so as some regret we sold the majority of our properties in around 2017 but this was a game-changer because we were able to make cash for every rental that we purchased so we loaded up on rentals in Iowa we actually purchased our property that we’re going to move into which is actually where I’m headed now and that kind of brings us up to speed to current date I take care of our 10 rentals which keep which keeps me pretty busy just in itself i buy and sell antiques i get to see my kids all the time we have a good rental income coming in now we do youtube oh yeah we also do a couple fix and flips every year Kelly has her real estate team with about 10 employees and in June of 2020 we’re going to retire at 40 so all in all life is great I have a wonderful family I have enough assets and passive income to live a comfortable life
As found on Youtube
Read MoreHow To Retire Early? (Young And Rich: Is It Possible?)
Jason 0 Comments Retire Wealthy
Hey, what’s up? John Sonmez here from simpleprogrammer.com. Tired of pushy recruiters sending you LinkedIn requests for jobs you have no interest in? Tired of blasting out resumes into the dark? If so, you should check out Hired.com. Hired.com flips job searching on its head by having top employers like Facebook come to you after you fill out one simple application. You also get your own job coach to help you on your next job search. If you haven’t checked it out, I highly recommend you at least fill out the application. Just go to Hired.com/simpleprogrammer. When you get hired with Hired, you’ll get double the normal sign-on bonus for using that link. Today we’re going to be talking about real estate.
Yes. I have done some videos on real estate. Some of you are like, “What the heck? Why is this guy talking about real estate?” Well, I’ve done fairly well in the real estate realm. If you’re interested, you can always check out my playlist on real estate investment and investment in general. I’m not going to go into all the details here, but occasionally I like to answer a few real estate questions on this channel. I got one here from Jonathan and he says, “I’m 21 and set a goal that I want to retire by 40 to 45.” Cool. “With 20K of passive rental property income.” Man, that’s awesome. I like that. I love that goal. That’s a good goal. “Currently saving money to buy my first property and hopefully, when I get a web development job I can speed up the process. My question is how do I plan for this goal?” This is good.
So, 21, Jonathan is 21 and he’s thinking this way and he’s got this plan by 40 to 45 to make 20K of passive income from rental properties. I love this. This is great. “Thanks for everything you do and have a beautiful day.” I am having a beautiful day. Thank you, Jonathan. “P.S. I was thinking of buying a duplex and live in one and I rent out the other one so basically the tenant pays my mortgage.” So, okay, there’s a lot of ways to approach this. I think Jonathan has got his head screwed on right. Well, I’ll start with the last, the P.S. of renting out a duplex and living in one side. I think that’s a great idea. This is a fantastic thing. More people should do this. A lot of you young people out there that are thinking about renting or buying a house, consider buying a duplex and renting out one side and if you find the right deal which—it’s out there, you could actually have the renters pay your rent.
You see what I’m saying? You could actually live for totally free by having a duplex and renting out one side. I’m not going to say it’s going to be super easy. I’m not going to say that those deals are everywhere. It depends on where you’re at. You’re not going to find that deal in California or New York, San Francisco, not going to happen, but if you’re in the Midwest you might be able to find that deal. I’ve seen it before. I think that’s a great idea, but let’s talk about the plan. 21, you want to retire by 40 to 45. You want to get 20K of passive real estate income. It’s not going to be easy, but it’s certainly doable. What you need to do is you need to calculate backwards where you need to be and have a real solid plan for this.
I can give you a general outline, but I haven’t run the numbers so I can’t tell you exactly. There are going to be some factors in here, but you actually need to take a spreadsheet and actually need to calculate this and figure this out. It’s going to be fairly complex, but you don’t have to be super detailed. You can kind of ballpark this, but you do need a spreadsheet. You can get some rough answers here, but calculate this out, 20K of passive income from real estate. Let’s say 45. What does your gross need to be? You’re going to have expenses, you’re going to have rents, I mean you’re going to have property management, you’re going to have a bunch of things here. That can give you an idea of what kind of wrench you need to be pulling in. It’s not going to be a 20K wrench, you’re not just getting 20K. It might be like 30 or 40K a month of rents. In order to get 40K a month of rent how many properties do you need and how much will those properties cost? How can you divide that over time and put inflation into the equation a little bit here over that period of time? Work backwards and make a spreadsheet and run some scenarios.
This is going to take time and some planning. Like I said, you can rough ballpark it. If I were just going to give you what I think would probably work for you, it also depends on how big your budget is. How much money are you investing every year? How much money do you have to invest every year. If you can put 10K down onto a rental property every year that’s different than, “Hey, I’ve got 50K to invest in real estate every year.” That’s different. Or 100K. Those are all different scenarios. What you’re planning based on your current scenario might—there may not be—there might be this gap and you might be like, “Well, how do I get there?” It might not be apparent.
You might have to do some other things. You might need to make more money in your job or start a side business in order to fuel that. I had to do that to reach some of my real estate goals. Think about that and calculate that out. I’ll give you kind of a rough timeline, a rough plan that I would have if I were you which would be something like—and this was the plan I initially developed when I was doing this which would be to buy one property every year, regardless. The nice thing I like about this plan is that it’s scalable.
The size of the property depends—is dependent upon how much money that you have in that year. When I first started in real estate investment when I was close to your age, I think I bought my first house at 19, but I really started doing investments around 21 and started this plan of buying one house per year. I think the first house that I bought I was able to put $10,000 down. It was like a $100,000 house or $120,000 house. The next year it was probably about the same and then probably like the third or fourth year I had more money. I was able to put $20,000 or $30,000 down. I got to the point where I was buying properties and I was putting about $20, $30, $40,000 down every year on a property when I buy it. Some of that was because of the real estate that I was already making me money. Some of it was because I was making more money in my job and I had businesses and side things going on which helped me to do that. That’s the kind of plan that I would—it’s not going to happen magically. I think that’s the key thing. You actually have to have a solid plan for this and you can run these numbers and calculate this out.
There’s actually a really good book that I recommend called The Millionaire Real Estate Investor. I think that’s by Garry Keller, the founder of Keller Williams if I recall correctly. I don’t recommend very many real estate books, simply because a lot of them are crap. The reason why I’m really going to recommend that book to you is because it has these charts that show you—it gives you a realistic expectation over 20 years what the value of a property is likely to be, how much money you’re likely to make from it, cashflow and all that. Again, it’s as complex equation. You’re not going to be able to nail this down perfectly, but at least if you run the numbers and you do the best job that you can, you can have a ballpark idea and you can always adjust the plan. You’ve got to have—you’ve got to know where you are and where you need to go in order to reach these goals. I’ll also recommend for you—I have a course that I created called Simple Real Estate Investing for Software Developers.
You can check that out here. If you buy that course, obviously it has a money back guarantee on it, but that’s going to help you to give you the basics of everything I know about investing. Just to give you a background, I have about 26 rental properties. They are all paid off. I started investing when I was 19. I kind of know what I’m talking about here. I don’t give a lot of bull shit advice about this. I give you exactly—practical advice on how to get started and how to do this.
The reason why I created the course, even though it might not seem like it goes along with a lot of my other content, it was just simply because I was tired of so many people giving BS real estate advice and doing all these kind of scamming, no money down, speculative moves that just doesn’t make sense. You need some kind of practical advice so that’s what I put together there. Go check that out. This is good. I think you’ve got a good plan here. You just need to develop the plan further and it’s going to be very dependent on your individual factors and—I think you have information though to say, “Okay, can you do this in 45—by the time you’re 45?” absolutely! I believe that you can. It’s not going to be easy, it’s going to be hard to do. 20K is a pretty big number but it’s certainly possible, but you’re going to have to start moving now, which it seems like you’re going to do, and you have to have a plan and it’s going to take a lot of work and a lot of effort and you got to find good deals in order to be able to do this in that time frame.
All right, I hope that is helpful to you. If you have a question for me, you can email me at [email protected]. Don’t forget to click the subscribe button if you haven’t already. Click that Subscribe. Click the bell to make sure you don’t miss any videos especially if you like the real estate stuff because, hey, those videos might not show up and then you’d miss it and then you wouldn’t find out the secret to life and how to make millions of dollars. All right, I’ll talk to you next time. Take care .
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