How To Quit Your Job Through Investing In Real Estate

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If achieving financial freedom, eventually quitting your job or simply just retiring with enough money to last you the rest of your life is your goal, then you’ll need to focus on three main areas around money:

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1.  Earning money refers to increasing your earned income. The top 1% of the US earns roughly $450,000 per year or more which by any measure is not easy to do. Obviously, earning more money can help you achieve financial freedom (and quite your job) faster but by itself, isn’t the answer. Why? Well look at Mike Tyson, the heavyweight champion who earned over $400 million in his career but lost it all shortly after retiring from the sport.

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2. Keeping money refers to keeping as much of the money that you earn in YOUR pocket, typically by reducing expenses (the largest of which are taxes). The more money you keep of what you earn, the more options you will generally have in life. But if you really want to achieve financial freedom to quit your job and retire rich, you’ll need to learn how and where to grow your money.

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3. Growing money refers to how you’re able to multiply your money through smart investments. In general, the stock market has yielded roughly 8-9% per year for the past 30 years (with no particular tax advantages unlike real estate). This is certainly better than keeping your money in a savings account but there are far better options out there to grow your money faster (while saving on taxes), without taking on more risk.

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I’ve been working for as long as I can remember. Besides lemonade stands and buying and selling Pokemon cards as child, my first real job was for my parent’s small business around 10 years old. Since then, I’ve had at least nine other jobs. Believe me, I didn’t set out to switch jobs or companies so many times, but I’m a dreamer, what can I say.

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Through my experiences with all those employers, I’ve come to know well the bittersweet transition of quitting a job, the nerves and optimism that come with the recruitment process, and the adrenaline and jitters that come with starting a new job.

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When it comes to leaving a job, there can sometimes be pain, guilt, and sleepless nights. Or, vice versa, the thought of quitting a job can bring eager excitement and a sense of relief.

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Wherever you are on that spectrum, leaving a job is a big transition.

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In order to make the transition as smooth as possible, you might consider building up some financial assurance to help ease that transition.

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In this article, we’ll dive into the three key steps that will enable you to quit your job through investing in real estate, so you can spend more time with your family and pursue the things you love.

These three steps to quitting your job through investing in real estate include:

1.  Finding your freedom number

2. Building passive income

3. Tracking your progress

Why Leave Your Job

In this day and age, unlike with previous generations, it’s exceedingly rare for anyone to stay with a single company, or even in a single industry, throughout the course of their career. Career mobility allows people to continually experiment, grow, and pursue their passions.

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As a working father, entrepreneur, and business owner myself, I’m extremely proud to be part of this movement, and I hope to inspire and empower as many others as I can to build passive income for their families, so they can have the freedom to spend more time with their families and pursue their passions.

However, it can be difficult as a working parent to take that leap into working less or quitting your job altogether. For one, there’s the guilt. Every aspect of being a parent just comes with guilt, amirite? There can be a lot of guilt and fear that comes along with quitting your job, particularly a lucrative one, and particularly when you live in an area where the cost of living is high.

How will the change in income affect your family? How will you be able to continue contributing financially to your family? And alternatively, what if you stay at your job for the money, but your kids grow up without you having spent the time you wanted with them? See what I mean? Guilt.

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When it comes to making major life decisions like quitting your job, everyone approaches it differently. Some people just go for it, sort of the sink-or-swim approach. Others want more of a safety net.

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Many of the parents I talk to want some financial assurance before they feel comfortable quitting their jobs. And often, this financial assurance comes in the form of passive income.

So without further ado, let’s dive into the three steps that will enable you to build that financial assurance, so you can quit your job with as little guilt and fear as possible.

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Step 1 – Find Your Freedom Number

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The first step in building the financial assurance you might need to feel comfortable quitting your job is to find your freedom number. What’s a freedom number, you ask? Great question. I was hoping you’d ask.

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Your freedom number is the amount of passive income you would need in order to cover the expenses that come with your current lifestyle, and then some. Once you’ve reached your freedom number, you will officially be financially free. That is, you can maintain your current lifestyle while not having to work.

In order to find your freedom number, start by looking at the last six months of your expenses. Take out any large seasonal expenses, like holiday gifts or travel.

Take the average of your expenses over those six months. Then, add a 10% buffer. This is your freedom number.

For example, let’s say your expenses over the last six months were:

·   Month 1 – $9,500

·   Month 2 – $12,300

·   Month 3 – $8,700

·   Month 4 – $10,800

·   Month 5 – $9,100

·   Month 6 – $9,600

The average of these six months’ worth of expenses is $10,000. Add 10% of that, and you get $11,000. So your freedom number in this example would be $11,000.

Once you have this freedom number in mind, decide whether you would need to reach this entire number in passive income, or a certain portion of it, in order to build that financial assurance you need to step down to part-time work or quit your job altogether.

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Step 2 – Build Passive Income

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Next, once you have your freedom number in mind, you have a target to build toward. Now your goal is to build multiple streams of passive income so that you can reach and sustain that freedom number each month without having to work.

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There are many ways to build additional streams of income. If you’ve got some mad skillz, you might consider writing a book, creating an online course, or designing products to sell online. Each additional product represents an additional stream of potential income.

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Of course, these side hustles all take additional time and energy and hence may not be as passive as you’re hoping.

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Which brings me to, real estate investing.

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There are more people who become millionaires through investing in real estate than through any other path.

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Why is that? Partly because, you don’t have to have those mad skillz I mentioned above in order to invest in real estate. As long as you have some money to invest, you can put it into cash-flowing real estate and build pretty solid streams of passive income.

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At Wingate Capital, we help people invest passively in real estate syndications (i.e., group investments). In the vast majority of our investment opportunities, we offer an 8-10% annual cash-on-cash return (via monthly or quarterly cash flow distributions), along with additional returns upon the sale of the asset after the hold period (typically five years).

So, if you were to invest $100,000, you could feasibly create a passive income stream of around $8-10,000 per year, all while doing very little work.

With each additional investment, you are building an additional stream of passive income. And, just like building a house, you can lay those streams of passive income down brick by brick until you’ve reached your freedom number.

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This is one of the things I love talking to others about – leveraging passive real estate investments to build passive income, enabling them to have more flexibility in their work schedules and to be able to spend more time with their families or following their passions.

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Regardless of the path you choose, the main goal of this step is to build multiple streams of passive income, whether that’s investing in multiple pieces of real estate, creating and selling products for residual income, or some combination of the two.

Step 3 – Track Your Progress

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Finally, in order to track your progress toward your freedom number, you must be able to track how much passive income you’re bringing in each month.

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For one, as you build each stream of passive income, it’s just plain fun to watch that passive income number grow each month. And also, as you see how doable it is to build those passive income streams, you can start to plan for the future.

For example, if you choose to invest passively in real estate syndications, you might see that every $50,000 investment will give you roughly $350 per month in passive income. So, for example, by moving the $200,000 you currently have invested in the stock market to real estate syndications, you might generate $1,400 in passive income per month.

While $1,400 might still be a long way from your ultimate freedom number, it could be enough to cover your groceries each month. So, that’s one fewer thing you have to worry about financially.

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Each additional passive income stream will further help you defray your living expenses, until at some point, you reach the tipping point and feel comfortable moving to part-time work or quitting your job altogether while still maintaining that income.

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Recap

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The thought of making a job change and possibly taking on a reduction in income can stir up feelings of guilt and fear in anyone. However, whether your goal is to quit your job so that you can spend more time with your kids while they’re little, to pursue a passion project, or to start a business to change the world, you can do this.

Countless other people have done it, and so can you.

By following the three steps outlined above, you can start to take control of your financial future and plan for your early retirement. Start by finding your freedom number, then build passive income streams to reach part or all of that freedom number, and remember to track your progress along the way.

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The journey to building up the financial assurance you need to quit your job won’t always be easy, but when the path is rooted in your big Why, you’ll get there.

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Here's to your freedom!

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Chris

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