When did we stop dreaming about retirement? As a nation, the media convinced us that we can never retire. However, that’s not the case.
Retirement is available to everyone, but it requires an enormous amount of work. So much work, in fact, that most people decide not to do it.
But retirement isn’t about leaving the workforce; it’s about the journey. The more you learn about ways to retire, the bigger the dream you can imagine. Let’s start with defining your basic dream retirement goals.
Passive Income Road Trip #2: Retirement Planning
What is your basic dream retirement? There are two main parts of your basic retirement: where will you be, and who will you be with? These basic questions will guide all of your follow-up actions.
I decided in 2019 that I wanted to retire on the white sand beaches of Pensacola, Florida. I wanted to be with my parents, wife, kids, and grandkids. I retired to Pensacola, Florida, in October 2023.
Now, I’m slowly building a sturdy life here in Florida. I am buying property and investing in dividends. I am ensuring that my family will survive and thrive for generations to come. Let’s look at these questions individually.
Who will you be with? Who do you want by your side during the most exciting part of your life? Some people want their spouse, and others their kids. You may not want anyone near you; it’s all up to you.
I decided to double and triple down on my family during retirement. I spent many years away during my 24-year career in the Marine Corps, and I realized the importance of family.
Passive Income Road Trip #1: Financial Mindset
If you plan on being with your spouse, you must ensure you both have enough resources to thrive. Retirement is much easier with one person, but it can also be very lonely. I love having my wife by my side every day, and I highly recommend it.
Where will you be? Where you decide to retire is a major part of your financial and cultural future. Will you retire overseas or in an expensive city?
Will you pay off your mortgage or downsize your home? Do you want to move to a small city in the United States or a big city in Thailand? The possibilities are endless; however, you must start preparing now.
You’ll be lost in the wind if you do not know where you’ll retire. There is just too much of a difference between retiring in Pensacola, Florida, and San Diego, California.
I recommend retiring somewhere very inexpensive. You can always travel to big, expensive cities, but your home base should be cheap.
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Let’s look at my scenario. My military pension is $9,100 a month, and my mortgage is $1,700. I also have a roommate who pays $1,000/month, which brings my housing costs to $700.
Therefore, I live in a 2,500-square-foot home on three acres for $700 a month—not a bad deal at all. Since I knew where I would retire, I bought a home here in January 2020. Five years later, I am reaping the rewards of being decisive early on.
The moment I decided where to retire, things “magacilly” fell in line. So I doubled down on my family and bought a house in Pensacola. Now, let’s talk about the different ways to retire.
The different ways to retire. You can now take your basic dream retirement and determine which financial method works best for you. Here are the four basic ways to retire: standard, dividends, real estate, and business.
Retirement the standard way. The standard retirement plan consists of saving in your 401 (k) and Roth IRA while accumulating points toward Social Security. This is the slow way to retire, and perhaps the riskiest.
Why is this way risky? In this method, you depend on the stock market and the government for all of your income. This way is good, as long as you support it with other methods.
Also, it will take a long time to accumulate at least $1 million in your 401K or Roth IRA. Your 401 (k) will generate a $40,000/year income as you sell shares. It’s not my favorite approach to retirement.
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Retirement with dividends. Dividend investing is my favorite way to retire; however, it’s not the most tax-friendly approach. I love dividends because I can be free as a bird.
The money in my account is mine, and I can decide to spend, save, or reinvest it. Of all the retirement methods, it gives you the most freedom.
You can also diversify your dividend investments by taking your income and transferring it to high-yield savings or treasury bonds, instead of reinvesting.
It can take quite some time to build your dividend snowball, but once it gets going, things move extremely quickly.
Retirement with real estate. Once you buy your first home, you have everything you need to accumulate wealth in real estate. The first purchase is the most challenging part of this path.
The Magic of Sales Funnel
Once you have your first home, I recommend getting a roommate (or two). This will help you save money for emergencies and toward your next place.
Once you have another 20% down payment, time to purchase another home. Let’s say you buy a new home every five years. You may own five houses by the time you turn 50.
As soon as you pay off one home, you are set. This rental income could provide a significant chunk of your living expenses.
You don’t need to become a real estate mogul; just own four to five homes. I think it’s quite possible to generate $10,000/month in rental income over a 25-year real estate career.
Retirement with business. The key to retiring with a business is ensuring it aligns with your basic retirement dream. If you plan to retire in Thailand and live on the beach, you want to build a business that suits this lifestyle.
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Once you determine your basic requirements, you can build a business that matches them. Let’s say you need to generate $5,000/month from your business.
You can create a consulting business that creates this much income with five clients (for example). You know exactly what you need.
Starting a business gives you maximum flexibility and the ability to create money out of thin air. Even if this isn’t your main retirement plan, everyone should have a little side business.
Mix and match retirement. I love to mix and match the retirement methods to create my Happy Cash Flow Retirement, which is the ideal scenario.
In reality, you would have a little of all these methods to ensure you get awesome results. The more advanced you become in each technique, the more wonderful outcomes you will see.
Start a Tutoring Business Toward Passive Income
Right now, I have a military pension, social security (maybe in 20 years), dividends, three homes, and a small writing business. I am setting myself up for long-term success no matter what comes my way.
Conclusion. So, what is your dream retirement? What method will you use to achieve it? There’s a lot going on, but there’s never been a better time to jump in.
Where do you start? Start by deciding how much you need to live your dream. Is it $5,000 a month or $20,000? This decision can guide your future choices.
Being able to retire is a massive blessing, and something we must pay forward to future generations. The more assets we accumulate (dividends, real estate, business), the more we can set our kids up for retirement success. 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. All Right Reserved Military Family Investing
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