Want to travel the world with passive income continuously flowing in without relying heavily on a paycheck?
Want Ultimate Financial Freedom?
I suggest you invest in Real Estate.
This has been my motto 100% since I learned about the concept at the age of 21. Getting your mindset to think in a way where money works for you, not you working for money is the first step to gaining financial freedom. This is the ‘Rich Dad Poor Dad’ very first lesson that every high schooler should learn about. The next step is to educate yourself on how to invest and then where to invest. This post will give you tips on how to gain financial freedom through Real Estate.
Disclaimer: I’m not a Real Estate Agent but have worked as a VP in Business Development at Ticor Title for the past 12 years. In simpler terms, I am a “Title Rep” or “Sales Representative” in the Title Insurance Industry which belongs to Fidelity National Financial Title Group (a Fortune 300 company). Having been in the Real Estate field for over a decade, I have met and closed thousands of deals for multi-millionaires who have gained wealth through strategically investing in Real Estate. Whether your goal is to Travel the World, to have more time with your kids, to retire earlier, or simply to have more financial freedom so that you are not a slave to a paycheck, I believe that investing in Real Estate is the way to go. It is the one asset that will only appreciate in time.
Travel the World While Your Real Estate
Equity Grows & Cash Flows in
Some of you wonder how I travel so much. I do make a good income from my job and there are various ways including credit card/airline points. But I don’t ever tap into savings or deplete my bank account to travel. The money I spend traveling is essentially equivalent to the tax refund on interests paid on my Mortgages. This isn’t necessarily my formula or plan, but it’s to give you an idea of the extra passive income coming in where you don’t need to rely on your paycheck for. It’s the financial flexibility you’ll experience as you build equity in your Real Estate Portfolio.
I have previously written about how to turn your dreams into reality and how I designed my life to travel the world in my 20s. This post will be about re-wiring your mind into thinking of money as a vehicle to choice, freedom and more time to Travel. Also re-wiring the traditional outlook on truly enjoying life only after retirement. I hope you learn something from my practical guide on Achieving Financial Freedom through Real Estate. No matter what field you currently work in, this can be achieved by anyone, starting at just a few thousand dollars of your savings.
Achieving Financial Freedom through Real Estate
At the age of 33 years old, I currently own 3 properties. I continue to contribute to my 401k/Roth IRA Portfolio and Company Stocks on every paycheck. I’m invested into a steady, high-return Hard Money Fund with a 10% return on my investment. Since I’ve invested over 4 years ago, I have made back half of my investment in interests already.
Between these investments and tax-writeoffs, I generate enough cash flow to cover at least half of my monthly expenses. This includes my travels around the world and a very comfortable life here in Los Angeles. This means that while I continue to work at my job, I also have money that’s growing even while I sleep or take off to Italy for two weeks. My plan is to have enough cash flow come in by the time I’m 40 years old that my paycheck will be purely side money. And the awesome thing about my job is that it’s similar to my investments. Since I am in sales, my income is mainly commission-based. Hence my relationship-building through the last 12 years also translates to continual income growth.
Untapped Potential Among Friends and Peers
I see a lot of untapped potential among my friends who have some savings but may not necessarily have enough to afford their ‘dream home’ (or even a reasonably-priced home in the city). I am referring to people of all ages:
- Millennials just graduating college
- People my age – in their 30’s
- Those near retirement age who could have strategically made more money had they invested in real estate
Of course this ultimately comes down to each individual’s financial goals. Some people may be perfectly happy with their 9-5 job. The thought of any risk would bring them more of a headache than not. But it seems that most people are always wondering how to make more money, work less and have more time for leisure.
As many interviews and studies have shown, no one on their death bed ever wished that they had worked more. The common regrets have been that they wished they had stressed less, enjoyed the moment, spent more time with family/friends and wished that they had traveled more.
Re-wire Your Mentality on “Making Money”
I have always been drawn as well as been a bit depressed by this line in the song, “Bittersweet Symphony” by The Verve:
“Cause it’s a bittersweet symphony this life..
Trying to make ends meet, you’re a slave to the money then you die..”
Most of us raised in America and especially those raised in an Asian family were taught these practical, generic lessons:
- You must study hard in elementary school so that you can get in honor classes in junior high
- Study extra hard in junior high so that you are in AP classes in High School
- Take tutoring, pre-SAT/SAT classes and start studying for College exams
- Study ultra hard in High School so that you can get in the best college
- No time for enjoyment. Or the more extreme – even sports & extracurricular activities.
- Go to the best college so that you can get the best possible job out of college.
- This should automatically translate to the best salary
- Get a Masters degree such as an MBA to get paid even more
- This job after all these years of school will pay you well so that you can work hard for another 40 years until you retire
- Once you retire, if you are lucky to be retired at 65, then only then, you can start to enjoy Traveling the World and the finer things in life
I am not mocking this concept as I understand wholeheartedly the mentality behind these lessons. It certainly works as a guiding principle and foundation. But I also see alternative or parallel ways in living a life in which you can enjoy every step of the way and still make money. Being lazy isn’t going to get you anywhere. But I believe more in working smart than hard. A combination of working smart and hard will ultimately get you farthest. If you’re like me though, likely you would just prefer to work smart and still have a cush life.
Lessons Learned while Partying
in Hollywood in My Early 20’s
At the ripe age of 22, I learned lessons about Real Estate Investments that I hadn’t been taught. Growing up in a middle-class area of Hacienda Heights, we were taught the lessons I mentioned above: Study hard, go to a good college, get a good job, save money for retirement, and then enjoy. This is certainly a path that works, but as mentioned, I yearned to see the world and really hated the idea of having to rely solely on a paycheck.
My Sales Territory began in Beverly Hills. As anyone knows, that is one of the richest cities in the world. As a young female or for anyone visiting, one can’t help but be fascinated by the amount of wealth that exists there. Rodeo Drive is a cheesy photo-op of that reality: $10,000 purses, $50,000 suits and $1 million dollar cars. While it intrigued me, I wasn’t as drawn by the materialism but more so in how these people attained it. I have always been a curious soul in people and cultures.
The lazy, hater way of answering it is to automatically assume that they were all born rich. End of story. And since that wasn’t my reality, then I had no chance of reaching above the ‘lower’ to ‘middle-class life’. But those that dare to dig deeper will know that wealth like everything else has a beginning.
I was invited to many parties when I first started working. Parties in multi-million dollar mansions and bottle-service on a Wednesday night at the newest Hollywood clubs. On the surface, I looked like every other young girl milking this life as a young spring chicken. Many girls openly tried to date/marry these men to be able to attain that life in the long run. While I was enjoying the moment, I wanted to earn it for myself. I wanted to know that I could achieve it. Because nothing is more satisfying than independence and freedom to choose whatever it is you want to do.
First of the Lessons: Invest in Multi-Family Buildings
I had a deeper interest beyond the partying. I was curious how these people afforded this life. Sure, some had trust funds, were privileged to begin with and had high-paying jobs. But many were also building on generational wealth through Real Estate. Frankly, I knew early on that ‘marrying rich’ was not goal. My dad drilled in me at an early age that you can’t rely on anyone but yourself. So you do end up marrying rich? Great, but that’s still technically his/her money. In a perfect world, a married couple would share ‘everything’. But I never want to rely on anyone for money or anything for that matter. Whether it’s a rich husband or even having to rely on my parents. Just the thought of someone telling me that I can’t travel somewhere or buy something brings chill down my spine.
Relying on someone for money meant (to me) that they have authority over me. I hate authority and any control. This came with a powerful consequence, it meant that I had to do things on my own. And I was up for the challenge and still am today. It’s exhilarating.
Start Investing in Babysteps
As I had conversations with clients and new friends, I learned that most the people around me had immigrant parents who invested in Real Estate when they came to America in the 1950’s – 80’s. They took what little savings they had after working 3 jobs and bought their first property at (for example) $80,000. Then they turned it into 2 properties and kept saving more money. In time, it turned into multi-family units. Decades later, many have grown it into a massive real estate portfolio. Or simply just 2-3 large Apartment Buildings where they have enough cash flow to cover retirement at 45. Each property can potentially cover their children’s college. I liked this idea way better than relying on paychecks and accumulating a savings account at 0.05% interest.
With my endless curiosity and courage to think that anything is possible, I realized that to achieve financial freedom, I myself was also going to do this through investing in Real Estate. Even if I had to start from scratch.
A Different Way of Looking at Money
I have always thought that I do not want to become an addict of the ‘rat race’ or to money. Whether that’s an annoying boss or relying on a family member. Sure, you can also become a full on hippie living in a commune, with a minimalist life. But even then, you are still going to have to beg or work some side jobs for food.
Everyone has a different relationship with money. Because of horror stories, many people equate money to evil. Families and friends have been torn apart from ‘money’. But I do not believe that ‘money’ itself tears people apart. It’s human beings and how they decide to deal with money that steers them in a certain direction. This applies to religion and relationships too. Some people think that the more money they make, the more jealousy will arise from around them. Well maybe they are around the wrong people, or perhaps they obnoxiously flaunt money/material and act like a jerk because of it.
Some others, including myself,
equate money as a vehicle to attaining
whatever it is that you want in your life.
This is not to say that money equates to happiness or unhappiness. This is up to you. But having money and time can afford you the leisure to do what you want. It could be having time to attend your children’s sporting games and spending more time with your aging parents. If you wanted to take the day off, you won’t be stressed about the day wage that is off of your paycheck. You will have equity building in your properties and investments regardless.
Money cannot necessarily buy health or cure cancer now, but it can give you better healthcare. It can be better medicine or less wait times to see a doctor. In my case for the past decade, it’s afforded me to (just to name a few):
- Travel to close to 50 countries
- Host dinner and cocktail parties at my home with close friends
- Donate and have the time to volunteer with non-profits I support (domestically and internationally)
- Take my parents to nice dinners and buy their flights to destinations they choose
I have certainly bought a few nice purses along the way but my focus isn’t on a materialistic life. If I lost them, I wouldn’t be as sad as I would be if I was told I couldn’t travel or enjoy the food I love anymore. In fact, I turned in my car lease back in June this year and have been driving my very first car, a 2002 Ford Explorer around. It’s at 190,000 miles and I’ll drive it until it’s last legs. The older I get, the more I find material things a waste and a roadblock to happiness. I still stay in shared hostels half the time when I travel. Occasionally though, I will get a decent hotel room or eat a nice meal and it feels good to be able to afford it.
Lesson: The very first step to achieving financial freedom is to not see ‘money’ as evil. Human beings and their relationship to money make it ‘evil’ (or not) depending on what they want to do with it. Choose to see money as a vehicle to time and the things you love. When used in the right away, it can bring you more joy and fulfillment in your life.
Where I am on my Personal Real Estate Journey
I currently own 2 single family houses and a 4-unit building. My next goal is to buy another 2-4 unit and a single family house out of state. I am making enough Cash Flow now to cover my rent in a shared condo in Bel Air and more. Some people ask why I don’t purchase my own property to live in. I have calculated that my money will go farther if I invest it in income-producing properties. You’ll have to decide which path to take as there is no right answer.
Living cost in West Los Angeles is costly. My rent, monthly Yoga studio pass, eating out and standard cost of living is pretty high. But I have figured that with the cash flow I currently have now from my 3 properties + other investments, I could technically move to a place with lower standards of living, like Costa Rica and not have to work a day in my life again. That gives me continued fuel to keep investing so that I could build it up to the point where I can semi-retire off my cash flow even here in LA. My goal is that when and if I have kids, I can spend as much time as I want with them at home but still with my own hearty income.
My Goal is to Semi-Retire within 10 years through Real Estate
Retirement has a different meaning in this day in age. The old idea of retiring meant that you save enough money so that you don’t have to work again and enjoy the rest of your life. Many people these days, even after ‘retiring’ still find ways to challenge their brain and start new businesses. It just means that they don’t have to worry as much about monthly expenses.
My goal within 10 years is to have enough Real Estate Cash Flow that I don’t need a job income for monthly expenses. I will continue working for that paycheck as I’ve built a good book of clientele within my network, but it’ll just be bonus + play money.
My friend is a Wealth Advisor for Companies where she advises employees to put money away for 401k, Roth, long term investments. I contribute a % monthly too but that isn’t what I plan to retire with. I mean, I hope I live until 65, but what if I don’t? I’m not waiting until then to enjoy my life!
When I asked her thoughts on Real Estate Investing, she said that it was for the ‘wealthy’. I started with $15k at the age of 25, which was all my savings at the time. That house is worth 50% more today which I’ll keep forever. I then got into Multi-Units which are my favorite.
Timing the economy is important but there are always deals. There are neighborhood pockets yet to be discovered for investors. Areas that are getting more popular because it’s cheaper to live in. Or because big businesses are moving in. Depends how risky you’ll go.
Fellow Travelers who also love Real Estate!
“In March of 2016, after being inspired by authors Tim Ferris, Rolf Potts, and travel blogger Nomadic Matt, I headed off for my first 15-day solo backpacking trip across Costa Rica. A trip that as it turns out would later alter the trajectory of my life in an amazing way from that time on.
This was a quote from a new friend, Ryan Mellon of Williamsburg, Virginia who I met recently at a Travel Blogging conference. Most of the other attendees were thinking of quitting their job to travel and/or figuring out how they can make money in Travel Blogging. Ryan and I had a rarer, yet very agreeable discussion on how Real Estate has financed our life and travel. Certainly there are Travel Bloggers and Influencers who can make a six-figure income, but it also means that they working full time while traveling. Why not do both?
Bridging people within my network together and seeing it flourish to beneficial results (financially or in friendships) make my work/life more meaningful. Finding a good realtor is crucial as well. I think it’s obvious that anyone can become a realtor. I mean it’s one of the most populated professions in this country. Message me if you want to start your Real Estate Investing process and I can put you in touch with the best contacts (realtors, commercial brokers, lenders) for you to start!
We are in this together. To all live a life that is not indebted to making a living, but instead a living that is fulfilled with time to Travel the World, Good Food and more time with Family and Friends.
Read my more detailed post to get started in your Real Estate Journey: Practical Tips on Real Estate Investing.
Interested in learning more about how to achieve financial freedom through Real Estate Investing? I am hosting a one day seminar on January 12, 2019 in Los Angeles. Visit the Eventbrite Page for more information and to purchase a pre-sale ticket for only $60 before December 31, 2018 and $75 after!