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
“Leverage is what makes real estate the most powerful investment of all time” –David Chilton, Noted Investment Expert and Author
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.
