How to Retire Early Financial Independence by Investing In Real Estate Rental Properties

My goal in life is to teach everyone how to retire early and achieve financial freedom so they never have to work a job again. In order to learn how to retire early you need to have passive income. 

The best way how to retire early, real estate investing. By investing in real estate, I was able to retire early at the age of 37 years old. With my 30+ properties, I achieved financial independence because all my properties made me money every month. On top of that, I only work 30 minutes a month on my properties and still make money.

One Property Makes Me $3,000 a Year or More

To retire early, I bought many rental properties. Each property brought me closer to financial independence. The very first property made me $250 a month in passive income.

If you make $250 a month, after an entire year, you will make $3,000!

$250 X 12 months = $3,000

Becoming financially independent takes a good plan and a way to implement it. I learned how to invest in real estate in 2006. Making enough money in your golden years can be a big concern but it doesn't have to be.

I quit my job when I was 37 years old and will never work another job again.

AND, I did not start with a lot of money, experience, or time. I had a full time job, a full time family, and no money.

Now, my life is amazing! I travel the world and do what I want.

Imagine your life:

1. Never have to worry about bills again
2. Never answer to a boss again
3. Having your mortgage paid off
4. Not work and still make $10,000 or more a month
5. Be able to do the things you want
6. Afford anything
7. Take back your life and be with your family
8. etc.

BUT… The real problem is that we were taught to retire at 68 years old… 

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HOW TO RETIRE EARLY FINANCIAL INDEPENDENCE

If you are like me, you are thinking “how do I retire early?” and “how do I protect myself from being fired, laid off, or my pension being taken away?”. How do you become financially independent?

I became financially independent at 37, and I am going to walk you through the steps I taught myself as I went through the entire process, and I will show you how I built my business from the ground up.

Listen to the How to Retire Early with Real Estate Episode:

After 10 years, I was able to quit my job and now I don’t need Social Security or a pension.

What Is Your Goal for Retiring Early

Think of these questions:

• What is your time-frame to become financial independent? 
• How much money do you need to retire early?
• What would you like to do with your life if you didn't have a job to go to every day?

Do you want to quit your job in eight years or do you want to make a certain amount of money?

If your income is $3,500 a month currently, is that what you are looking to replace? In five years, do you want to be free to travel? What is your goal?

Pause for a second and think about what your life will look like if, and when, you don’t have a job and don’t need to worry about your expenses. What is your goal?

My goal when I started investing was to quit my job in 10 years. When you are done thinking about this, take out a piece of paper and write your goal down so you can post it where you can always see it.

Whether it is in your wallet or purse, your phone, your dashboard, etc. Put it in a place you will see it every day.

The goal is not money. The goal is to change your life and design it the way you want it to be and not designed around your job. Focus on that goal every single day and when things get tough, you can fight and push through to that goal.

In the 10 years it took me to build my business, there were some setbacks. Sad to say but I lost a lot of money, because I didn’t know what I was doing.

I didn’t have someone teaching me the process and how to not lose money. I am here for you, and that is why I have the podcast, online courses, articles, and coaching. Fight for that goal day in and day out.

Plan for Retirement

Let’s say you save up one million dollars for your retirement. If you retire at age 62 or 65 and you live to age 85 or 90, do you think that million dollars is going to last that long? I hope it will!

Not everyone is going to be able to save a million dollars, and if they do it probably won’t last more than eight or ten years.

What if you only save up $500,000 or $250,000 or $100,000 for your retirement? You are not going to be able to live out your golden years like you want.

You are just hoping your money is not going to run out before you die and then you need to go back to work.

I know of many, many people who, after retiring, had to go back to work.

In fact, my uncle was a teacher, then a principal, then a superintendent, but 15 years after retiring, he had to go back to work because his pension was not covering everything.

It’s sad, but it is a fact of life — you may run out of money before you die. How much better it would be to be independent so you can live how you want to live in your golden years.

Calculate Your Total Personal Expenses

Look at all of the expenses that you have, including your car payment, mortgage, food, entertainment, taxes, insurance, cell phone, internet, cable, and total them up. Used this budget worksheet to help you.

Let’s say all of your expenses equal $2,800 a month. You need to look at how you get enough properties in your business to cover $2,800.

Think about how you can build your business big enough, so you can than use that money to pay off your expenses. Praise the Lord, I don’t need to worry about having enough money to pay my bills!

My properties make me money over and above my expenses.

If your expenses are $2,800 a month, but you only take home $2,500 a month, you are going $300 into debt every month. That is a problem! You may need to cut out expenses.

You may need to sell your car and buy a cheaper one. Your goal is to have enough money to save so you can invest in rental properties.

Complete Your Financial Statement

Print the Personal Financial Statement and fill it out. Make sure you fill out everything from your assets to liabilities. This is going to be a report card for your life.

This will show how you are performing in your financial life. Do you have more liabilities than assets? Are you going in debt every single month?

This is something you are going to use for future investing. See what your report card shows. Just by cutting a little bit of your expenses, you will be able to build your business faster and quit your job even sooner.

Figure Out Your Budget

If you make $2,500 a month, you need to make sure your expenses are below that, so you can save money every month.

Cut things out where you can. If you are going to four movies a month, cut that down to two or zero.

I’m not saying to cut it out forever, but sacrifice now so you can live however you want later. Make a budget and make sure you are saving at least $100 every single month.

f you can’t make it work, figure out how to make more money. You may need to pick up a second job or a start a side hustle.

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Find Your Target Income

If you are going to retire early, you need to look at how you can keep investing, buy more properties, and live the dream life. In March, I took my wife and four kids across Europe, through 11 different countries.

We saw everything and it was fantastic! We did that because I still have money coming in. In February, I bought three, single-family homes and a duplex, because I had the money coming in and those properties make me even more money.

Let’s say you make $2,500 a month and you start a side business or start driving for Uber, and now you are making $3,000 a month. Make sure you save that extra $500 every month to buy a property.

When you look at what your target income is, think about what you want to do with your life.

If your expenses are only $2,400 a month and you want to be able to have an extra $400 a month to invest and save for long trips, make sure you calculate that all in.

Know your target income and start saving!

Save for Future Investing

Save a minimum of $100 a month for future investing. The goal is 10 percent of your income.

When I was growing up I was not taught to save, so every time my kids get any money, this is what we do:
50% for savings
10% for God
20% to mommy for family expenses
20% for spending

When kids need to use their own money to buy things they want, they realize quickly how important or not important that thing is to them. Oftentimes, they end up saving their money or giving more to God.

Start now! Don’t look back and regret not saving earlier. Start where you are.

“The best time to plant a tree is or was was twenty years ago. The second best time is today.” — Chinese Proverb

Set Your Target Age to Retire

For me, I didn’t think about how much money I wanted, I just knew I wanted to give myself 10 years. I was actually able to quit in nine years, but I worked hard to get there.

Set your target age and strive to reach it. Have the criteria set up so you see the clock ticking.

Make sure you are buying properties that make you at least $200 to $250 a month in passive income. If you have 10 properties, that’s $2,000 in your pocket every single month.

If you need to cover $3,500 a month, you only need 12 to 16 properties to quit your job, depending on how much they are bringing in every month.

Scale Up With Leverage

Leverage means buying a property with a mortgage or taking loans out from somewhere else. You can scale up you business so much faster, if you use leverage.

I bought my first property in 2007 with $17,000 cash, which was our life savings.

After I bought it, I refinanced it and pulled all of that money out to buy my second property. I then refinanced my second property and bought my third and fourth properties.

I keep recycling that money over and over again. When you go with leverage, you are able to dramatically increase the number of properties you are able to buy.

See all about it here: www.masterpassiveincome.com/brrrr

Sacrifice Until You Quit Your Job and Retire Early

Sacrifice going on trips, going out to dinner, and other things, so you can live the life of your dreams later. Personally, I didn’t go on vacation for about seven or eight years, because I wanted to use that money to buy more properties.

Our annual vacation was driving 600 miles from Fresno, California to Phoenix, Arizona where my in-laws live for Christmas or Thanksgiving, and that was it!

We would go camping, but we didn’t go to Disneyland, Hawaii, or anywhere that cost $2,000 or $4,000.

Now, look at me!

In 2017, I took my entire family to Japan for six weeks and drove 1,200 miles around the country. All of that sacrifice was worth it. In 2018, I took my family through England, Ireland, Scotland, Israel, and Europe for six weeks.

I strongly recommend sacrificing now! Look for ways to save money so you can buy more properties.

As you go through this entire process of looking at your life and looking at what it is going to take to retire, I encourage you to also learn how to buy properties.

If you want to learn how to invest in real estate, check out these other podcasts:

Traditional Retirement Will Fail You

Before we get into retiring early, let’s talk about how some people in America tend to view retirement. Many people view Social Security as their retirement.

Do you believe that Social Security will be there when you retire or when you are at the age to retire?

I am 39 years old right now, and if it is there when I retire, that’s great! That would be extra money, but that is not going to be my main retirement strategy. From what I’ve read, Social Security is mostly gone.

Congress has used that money to pay off loans and it doesn’t have much left. The only way they are able to pay retirees is by the people who are working, and I don’t believe it will be there when I retire.

The Social Security system was never intended to be a full-blown retirement plan for you. It was created in case of emergency and in case you didn’t have the ability to take care of yourself. It was not meant to be retirement.

If you have any thoughts that your retirement will be Social Security, I strongly encourage you to get that out of your head. It could be gone tomorrow!

It has already been gutted and is completely relying on people in the workforce.

Social Security is almost like a Ponzi scheme.

This is where they take money from new investors to pay other investors, and the only way to keep it going is if they get new people investing.

In a previous episode, I talked about how I almost got sucked into a Ponzi scheme. Check out this episode to hear more.

Congress or the president can get rid of Social Security at any time!

They can pass a law and dissolve it at any point. I used to work for a county government, and county government has always been known for having a cushy retirement.

My boss, the Assessor, retired with 100 percent of his pay every month! He was making about $130,000 a year when he retired, and, because of the pension, now he gets that without working.

I quit my job because I realized they could loot that pension fund and I could be out. I didn’t want to be dependent on anyone, I wanted to be independent.

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