How To Quit Your Job Through Investing In Real Estate
Any workplace transition, regardless of how many jobs you’ve had or how far along your career path you are, brings up emotions, concerns, and even some sleepless nights. The bittersweet emotions associated with leaving a job include regret, worry, anxiety, enthusiasm, adrenaline, and gratitude.
It only makes sense that having some cash on hand would make any transition less stressful. In this article, we’ll walk you through the three steps to transition from the 9-5 through real estate investing so that you can spend less time at a computer and more time doing things you love.
Why Leave Your Job
Unlike previous generations, few people today stay with the same employer or industry throughout their careers. At the same time, there is a massive shift towards work-from-home, remote positions, freelancers, and small businesses.
Many professionals (including yourself) want to make the leap and are conscious of the freedom they desire, but are afraid of the guilt and worry that comes with abandoning a career path, reducing their salary, and still being able to live a life they enjoy. Some of these anxieties may stem from a necessity to support a family or from the high expense of living in their area.
Passive income is the simple solution to all of the above. It may seem impossible to earn money without ever having to set foot in an office or work even a few hours a day, but we’re here to show you how.
Step 1 – Find Your Freedom Number
Finding your freedom number is the first step towards building a strong financial strategy for quitting your full-time employment with confidence. This is the amount of money that, depending on your current lifestyle, would more than cover your regular monthly expenses.
This is the amount of passive income you’ll need to be able to stop working and still pay all of your bills. Reviewing your expenses from the previous six months can quickly reveal this number.
Let’s pretend your expenses for the last six months look like this:
Month 1 – $ 8,600
Month 2 – $ 10,200
Month 3 – $ 10,500
Month 4 – $ 13,800
Month 5 – $ 6,100
Month 6 – $ 10,800
The average of these expenses is $10,000. Now, add a 10% buffer.
Your freedom number in this case is $11,000. This is how much you need to establish a consistent, passive income so you can leave your nine-to-five with confidence.
Step 2 – Build Passive Income
Now that you’ve calculated your target freedom number, you can start putting together multiple streams of income to equal that.
Writing a book, providing online courses, or designing products to sell online are all examples of passive income. Real estate investing, on the other hand, is my favorite because it involves far less time and work.
In fact, did you know that more people become millionaires through real estate investing than through any other means?
It’s true! This is due to the fact that you do not need to know how to write, build websites, or manufacture and promote items. You can invest in cash-flowing real estate and expand your income streams one deal at a time with some capital and dedication to research.
Passive real estate syndications investments can provide 8 to 10% yearly cash-on-cash returns, plus additional income when the asset is sold after an average of 5 years.
So, as an example, you could invest $100,000 and earn about $9,000 in passive income per year while doing very little work.
Get a few of these going, and you build, brick-by-brick toward your income goal/freedom number ($11,000 per month in the example above). Even just an extra one or two thousand a month relieves some financial pressure and allows for more flexibility in your personal schedule.
No matter how you choose to build your financial cushion – through real estate or online products or both, the main goal is to create multiple streams of passive income to reach your freedom number.
Step 3 – Track Your Progress
As you build each stream of income, it’s fun to keep track of your progress and watch that passive income number grow over time. Whether you’re an excel nerd or not, you’ll want to set up a system that allows you to see how much passive income you’re getting each month and which investments are outperforming others.
If you chose real estate syndications, for example, you could see that for every $50,000 you invest, you’ll make about $350 per month in passive income. By this calculation, you might consider transferring the $200,000 you have in the stock market to syndications and earning $1,400 per month.
While $1,400 is a long way from $11,000, it is a start. It will also likely cover your groceries for the month, giving you one less thing to worry about.
Each additional source of passive income you add covers another current living expense and adds to your freedom number mosaic. You’ll eventually reach a tipping point when you feel safe reducing your work hours or quitting your job entirely without experiencing a true income reduction.
Recap
Drastic changes and rapid transitions can easily cause anxiety or stress in any responsible adult, but this is especially true if you are responsible for a family or have high lifestyle/income goals. The most important thing to remember is that countless others have achieved passive income through the methods we’ve outlined, and you can, too.
The steps outlined here will assist you in identifying your personal passive income goals, setting a course to achieve those goals, and tracking your progress. Whatever your motivation for wanting to earn passive income, the three stages outlined above can help you gain the financial security you need to confidently quit your job.