Financial Independence through Real Estate

Of all the ways to retire early, I believe real estate is the most attainable of them. I recently wrote an article called “How We Plan to Retire on Dividends,” which laid out our plans to use investments to supplement our retirement. Then, I wrote an article called “Retire Rich, Retire Comfortable with a Business,” where I said business is a great way to supplement your passive income throughout retirement. 

So, where does real estate fit into the fold? I believe that real estate is the best wealth generator available to the standard person. The only issue is that it takes enormous amounts of financial education to obtain real estate.

Real estate is expensive, and it can be challenging for the standard person to wrap their head around financing. Especially now that there seems to be a shortage of affordable housing. For these reasons, I continue to write about real estate. 

How the Rich Buy Their Bling

Without financial education, you will not join in the profits, tax benefits, and passive income from real estate. Kristina and I own three homes, and one of them has been a nightmare, but they have made us financially independent. 

I’ll give you a quick example of the power of real estate. In June 2021, I will reach 22 years in the Marine Corps. The military will provide me with a $200/month pay raise, which will be taxed. In 2021, my rent went up across two homes, and we are working on a refinance on the third. In total, we will bring in an extra $500/month. My next pay raise in the military will be at 24 years of service. In January 2022, I can reassess my rents and see what I can change, if warranted. I am in complete control of my income. 

And that is the power of owning real estate; you are in control. Sure, you have to deal with tenants from time to time, but that is part of being an adult. You will not become wealthy by hiding from the world and investing in your 401K. Well, maybe you will but at age 65+.

Where do you start? You have to start by building your mindset. I recommend the book “Unfair Advantage” by my favorite author Robert Kiyosaki. He tells us how real estate falls into our overall portfolio. Then there are books on single-family residences “Build a Rental Property Empire,” multi-family residences “Zero Down,” and real estate basics “The ABCs of Real Estate Investing.”

How to Prosper During the Next Recession

Now, this is the hard part. Once you have some education, you have to do something. Having all the information in the world will buy you no dividends if you fail to act. Some ideas are to become a real estate wholesaler, a real estate agent/investor, or invest in parcels of land. 

By taking acting, you will start the learning process, and over time your knowledge will grow. I didn’t always have a blog or publish books. In fact, I am relatively new to both. But I had to jump in so I could learn on the fly. Even if you don’t have a ton of money, you can find great mentors by sacrificing your time. 

The book “Sold” describes the life of a big-time real estate agent. Great real estate agents are always looking for someone to off-load menial tasks from their plate. If you are motivated, you can become an intern, albeit making poor wages, but learning from the best.

But do you have what it takes to learn and build yourself? I’ll be honest; most people do not have what it takes. It is far easier to work a job. Most jobs require little innovation or true problem-solving capabilities. No, resetting your computer when it is slow is not critical-thinking.  

Living a Middle-Class Life is Stressful

We have become a society of laggards who see eight hours of work as “eight hours AT work.” We are no longer paid by our performance or the products we produce—this makes us slow, lazy, and dumb. The world of real estate is entirely different. 

If you want to find tax lien properties, land for pennies on the dollar, or private money lenders, you will have to hustle. There is no clock to punch. My wife and I are financially free, and I accredit it to real estate.

Of course, I read 46 books over the last nine months, but beyond that, real estate was the key. We have two roommates that pay us a combined $1,600/month in rent. This money goes straight into our dividend portfolio. We are now entirely free, and we can both retire today. However, there is more to do.

I can increase my military retirement, help our dividend portfolio to reach $1 million, and expand the royalties from my books. And finally, there is more real estate to purchase.

In today’s world, we need to be creative to find financing. That is why I am writing the Creative Financing in Real Estate series (101, 102, and 103). We also need to find new opportunities in affordable housing like tiny homes. 

How to Create “Luck” With Money

Don’t forget that we can maximize the land that we own as well. Real estate does not have to be you buying more homes; you can turn a profit on your residence. There are ideas like opening a dog park, a farm, or running an herb garden. How about making a vineyard?

Real estate is a mindset. One of my first articles was “How to Leverage Real Estate at Any Age,” where I talked about keeping your monthly housing costs low for the entirety of your lifetime. “Mortgage Zero” goes even deeper into this line of reasoning. 

With housing at an all-time high and employment wages stagnant, people are leveraging their futures to buy into the market. I assume people pay 50-75% of their salaries into their mortgage costs and housing expenses. Paying this amount is financial suicide. Millennials are feeling the effects of this as well. It is more challenging than ever for millennials to become homeowners. 

We have to start working together; brothers and sisters need to start buying homes together, building up their finances, and becoming conglomerates. Adult children need to start coming home to assist parents and start businesses together. Using home equity to buy homes in smaller cities may be a way to get into the real estate market without taking on too much leverage. 

Mentorship is Dead

The only way out of this rut is to share and work as a team. These corporations love when a young family buys a home that is 60% of their income. These young people will soon be in credit card debt, student debt, wedding debt, ring debt, vacation debt, car debt, divorce debt, private school debt, etc. They own you. 

Avoid all of this crap. Use the four steps to become rich, and you will be happier than you can imagine. It all comes to this quote “Wealth is having excess income vs. expenses.” This quote is probably the most compelling statement I can find about becoming wealthy.

A person who makes $4,000/month and spends $2,000/month is wealthy. A person who makes $20,000/month and spends $22,000/month is broke. Somehow in America, we can’t seem to grasp this simple concept. If we did, we would all work together to reduce our expenses and build true wealth.

If you can understand this quote, you can understand the value of real estate. Getting into real estate doesn’t mean that you have to become a landlord. It means that you will maximize your personal residence to reduce mortgage and housing costs to 0% or, even better, earn a profit. If you can do this, you will become rich. You will have achieved financial independence through real estate. Good Luck!

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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.  I have no business relationship with any company whose stock is mentioned in this article.