How to obtain financial independence
Let’s say you make $60,000 a year. In 25 years, with inflation rate at 3%, you will need approximately $125,000 to have the same comfortable lifestyle.
To retire at 65 and draw $125,000 annually, you will need $1.8 million in capital and have it invested at 7% interest per year.
Take tax deferral plans into account, you will have to invest $1,100 every month at 10.5% interest for the next 25 years. Yikes!
Stream of income<
/strong> You invest in an $80,000 condo with a down payment of $20,000. You initial investment would grow to $167,000 with a growth rate of 3% per year over 25 years. Even after the tenant has paid off your mortgage, they will continue paying your rent. Which means if a tenant is paying $800 monthly, if 25 years, with a 3% growth rate, it would be $1670. Assuming ongoing operating expenses to be approximately 40%, you’d still be left with over $1,000 per month income. Now imaging having 6 or 7 such properties paying you’re a monthly income of over $1,000 each.
“Leverage is what makes real estate the most powerful investment of all time” –David Chilton, Noted Investment Expert and Author