What is Financial Independence?
Financial independence is an economic indicator suggesting someone is no longer dependent on income generated from any type of job and that they are very flexible on the use of their own time already. People who already call themselves “financially independent” are already capable of getting their most basic needs with a more passive source of income.
In other words, those that have been deemed financially independent rely on a previously assembled portfolio of assets to generate income that is either equal to or greater than their expenses. Perhaps even more importantly, however, financial independence offers those who attain it the freedom to have control over their own time to devote to their families, passions and interests.
SO, HOW TO BE A FINANCIALLY INDEPENDENT PERSON WITH REAL ESTATE INVESTING?
First of all, did you know that real estate is one of the best ways to achieve financial independence?
Yes, you read it right! The passive income one can generate from a properly assembled portfolio of rental properties alone is enough to eliminate one’s dependence on the steady income generated from a job. That said, if you hope to achieve financial freedom through the use of real estate, there are several steps you can take to get started:
There is nothing more important to building a profitable rental portfolio than a sound education. Remember, it is the knowledge one gains that will guide them through each and every step of the real estate investing process. Plus, good real estate education can mitigate risk.
Set your financial goals
Assess your current financial situation and if you are comfortable with your current income, your goal should be to replicate it with the passive income generated from a portfolio of rental properties. Of course, you may adjust your own number to fit your personal preferences.
Plan Your Finances
Taking action to start reaching your goals is one of the crucial steps here. But how? The best place to get started is by researching financing options so you can begin looking for your first deal. It is very normal that new investors won’t have the money it takes to require an entire portfolio of rental properties, let alone a single asset. Luckily, there’s no need to invest with your own money since there are several ways aspiring investors can gain access to funding, the most promising of which is a private money lender.
Building An Investment Business
Investing in a single property is a great first step, and a necessary one at that. If for nothing else, you can’t possibly realize financial freedom with one deal, let alone your first one. Therefore, your goal shouldn’t be to complete a single deal, or even two or three, but rather to do enough deals until you are financially stable to build a rental portfolio.
Grow Your Portfolio
Growing a portfolio of rental properties will depend entirely on how much you need to make to realize financial freedom. For many, the more properties, the better.
In summary, the path to financial independence is a lot more manageable for those who are prepared for what will be expected of them. Understanding what it may take to rid yourself of the dependency of a traditional job is a great starting point, but those who are serious about learning how to achieve financial freedom should strongly consider the prospects of a cash flowing rental property portfolio. The passive nature of buy and hold assets should be able to supplement one’s income now and well into retirement.
Now, my question is do you also want to be financially independent? Share your thoughts below!