financial Freedom road signDo you desire financial freedom and not be tied down to a job for the rest of your life?

You probably are entrepreneurial minded and have a desire to be independent.

You are not alone in your thinking.

There are many people who feel the same but are trapped in their job.  So, what are the steps to financial freedom with passive income ideas?

Really, the biggest thing you need to address is how you think about yourself.  Do you see yourself as an employee or as someone who is being held back from better things?

These five steps will help you address this as well as set you on the path so financial freedom with passive income ideas.

Now that I have quit my job, I want to share the 5 steps I took to attain financial freedom with my passive income ideas.

The passive income path is definitely the road less taken but those who take it find the destination to be amazing!


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The 5 Step Process for Financial Freedom with Passive Income

In order to master passive income and retire and 10 years from your job, you need to plan and prepare for your escape wisely and these five steps will help you be successful.

  1. Develop and Master a Winning Mindset

  2. Find Your Investment Vehicle

  3. Create Personal Goals and Milestones

  4. Achieve Your Goals Daily/Weekly/Yearly

  5. Plan Your Escape When the Time Is Right


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Step 1 – Develop and Master Winning Mindset

There are many people in the world today that enjoy being an employee.  Most likely, you are not one of them.  If you are reading this right now, then you are one of the brave people out there that dare to go against the conventional thinking of working your entire life at a job and hope that you will be taken care of in your retirement.

I know this is not you and it is definitely not me.

To get you started down the path to financial freedom, you need to understand that the way you think about yourself will determine a lot of how you act.  If you believe that you are an investor, then your entire outlook in life will change to be as if you are an investor.  Other issues with the way you are currently thinking are how much you spend, how much you make, how you get paid, etc.

To start you down the path, I personally recommend that you get a copy of a book that transformed my understanding of what it takes to be financially free.

The greatest recommendation I can give you to develop and master a rich mindset is to read the book “The Richest Man in Babylon” by George S Clason. This book does an amazing job at telling a fictional story that teaches a lesson on how to be rich and have a rich mindset.

I personally read it three times and absolutely love the teachings and it. If you don’t have the time to read the book you can check out my summary of the book here. The summary will get you a good understanding on how to have a rich mindset but to develop even further, I suggest buying the book and reading it many times to help you stay the path and develop a rich mindset.

The main take away from the book you can apply today is to control your expenses and to pay yourself first.

Pay Yourself First

The first cure outlined in this book is to “Pay Yourself First”.  This means for every $100 that you take home, you keep in your purse/bank account $10. This money is to be saved, and not spent, for future investing. After time your bank account balance begins to grow bigger and bigger.

Over time you will have much more money in your bank account then when you did when you started.  Be careful not to spend this money on anything that will not make you money.  New cars, big tv’s, vacations, etc. are all types of items that take money out of your account but does not put any back.

Control Your Expenses

The second cure is to “Control Thy Expenses” which means to live below your means and don’t spend more than 90% of your earnings.  The only real way to do this is to list out exactly what your expenses are each month, then cut out expenses to get you below 90% of your income.

In order to have more money in your pocket that you can save for investing, you need to either increase income or decrease expenses.  Cutting expenses is hard to do but must be done in order for you to be rich.

How to Implement the First Two Cures to Quit Your Job

To understand how you can quit your job and 10 years, you need to look at your income and expenses and plan accordingly. If your income is high but your expenses are high it will be hard to save money and invest it. If you are going into debt every year then you will never escape your job because you are tied down to it. There are many who have a high paying J.O.B. (Just Over Broke), possibly making $100,000 a year in wages but they have expenses that are just as high as their income.

Their standard of living matches their income so they will always have to work the same J.O.B. year after year just to make ends meet. Likewise, if you have a lower paying J.O.B. making $40,000 a year in wages and have expenses of $40,000 or more every year, you are just treading water, not getting anywhere. You must work year after year, just like the person earning $100,000 a year.

Think of this scenario and ask yourself who is richer:

Peter:

Yearly Salary:       $100,000

Yearly Expenses: $120,000

Yearly Savings:     -$ 20,000

Starting Savings: $0

Starting Debt:    $0

Jill:

Yearly Salary:       $40,000

Yearly Expenses: $35,000

Yearly Savings:     $ 5,000

Starting Savings: $0

Starting Debt:     $0

Peter, who is following the way most poor people go, has a yearly salary of $100,000 and has $120,000 per year in expenses. His focus is on living in the now by living paycheck to paycheck. All his money plus what he borrows on his credit cards goes to lavish vacations, expensive cars, mortgages, etc.

After 5 years, Bill still has his $100,000 yearly salary and kept the same expenses and added yearly debt of $20,000 for a total debt of $100,000 after the 5 years.

Jill, who wants to start investing in real estate, has a yearly salary of $40,000 and has $35,000 per year in expenses. Her focus is living for the future and saving her money for passive income. All her money goes to pay her few bills while being wise with her money, by living in a home she can afford, going camping for vacations, driving a 15 year old car she bought for $3,000 cash 5 years ago.  She works hard to control her expenses and keep them below the income she makes from her J.O.B..  She also knows she needs to pay herself first and saves $5,000 a year to be invested in passive income ideas.

Jill is able to save $5,000 a year to invest in passive income which brings her cash flow each month through real estate. She can save for one year, buy a home with a FHA mortgage with only 3.5% down and rent it out with positive cash flow of $300 per month. Each year she does it over and over again, keeping her same expenses, but increasing her passive income and monthly cash flow.

In my opinion, even though Bill makes more money from his earned income, his expenses are so high that he is actually poor. He will be forced to work his job every day for the rest of his life in order to live and pay off the debt that he’s incurred. Jill on the other hand has the ability to save money and escape from her job by investing in rental properties to replace her earned income with passive income.

Let’s look at Jill’s numbers:

Income$         40,000
Expenses$         35,000
Savings$           5,000

Because Jill is able to save $5000 a year she will be able to invest that money into rental properties which will make her more money every year. If she is wise, she will keep her expenses low and she will continue to save the $5000 a year as well as any money she earns from a rental property to buy more properties.

Here is an example of how she will be able to increase her income in five years by $18,000.

RentalsMonthly P.I.Yearly P.I.Total Yearly Income With Job
Year 11$300$  3,600 $ 43,600
Year 22$600$ 7,200 $ 47,200
Year 33$900$ 10,800 $ 50,800
Year 44$1,200$ 14,400 $ 54,400
Year 55$1,500$ 18,000 $ 58,000
Total increase of yearly income$ 18,000

After purchasing one property she now has an annual income of $48,500 including her salary from her job. If she then saves that extra $300 a month, instead of spending it, she will now have $8500 to put towards another home that will make her another $300 a month. Now, in her third year of investing, she has two properties that bring her an extra $650 a month or $7,800 per year increase to her total income.

If Jill continues on the path of buying one house a year and save the money to buy more properties, she will have enough passive income in 5 years to earn $18,000 per year. With the investing in rental properties, this scenario is entirely possible.

It is not easy, and does take hard work and patience but if you are determined, you can be just like Jill and purchase one home per year with your savings.

For Jill, if she would continue her current path of acquiring one property per year for the next 7 years, at year 12, she would have 12 properties and earn $43,200 each year in passive income. Her passive income has now surpassing her monthly salary from her J.O.B. If she wanted to she could then retire and live off her income for the rest of her life.

RentalsMonthly P.I.Yearly P.I.Total Yearly Income with Job
Year 66$1,800$21,600$61,600
Year 77$2,100$25,200$65,200
Year 88$2,400$28,800$68,800
Year 99$2,700$32,400$72,400
Year 1010$3,000$36,000$76,000
Year 1111$3,300$39,600$79,600
Year 1212 $  3,600 $ 43,200 $  83,200

Accelerating the Rental Property Process

Because Jill decided to develop and master a rich mindset, she now has $43,200 of passive income per year that she did not have before. This is if she just bought one a year. Imagine if she was able to buy 2 or 3 per year. The growth could be dynamic!

By following the passive income model investing in rental properties and leveraging her properties with bank notes, saving the income, reinvesting the income into more homes, she could have 15 properties in 5-10 years. The properties would bring in for her $4,500 a month in income and replace her salary. In 5 years she could retire and live the good life.

Are you ready to quit your J.O.B. and take yourself on a new journey?

Find Your Investment Vehicle
(Rental Properties, Online Businesses, Stock Investing, etc.)

Many people desire to quit their job and design their life the way they want to live it, but it is hard to find the means in which to do it.

So how do you pick the passive income ideas that will allow you to be financially free?

Getting started is basically taking one step in the direction you want to go and making small course corrections as you are going along the path. I have made many small course corrections in my life as I have worked towards building my passive income to quit my job.

Find your investment vehicle

What about you? If you want to be financially free, where do you begin? What investment vehicle are you going to take to retire? Are you going to invest in stocks, mutual funds, real estate, businesses, or online businesses?

It can become a little daunting at times because there are so many different ways to build passive income but we are rarely ever taught any of these government schools.

It seems like the government school system teaches the students how to be employees and not employers or even investors. Everything is about following a process that you’re taught by the teacher that will help you to get the correct answer to the question.

I find that we become one of many cogs in a machine that work together to produce something that the machine desires to produce. Depending on who is controlling the machine, you get different outcomes and experiences being a cog.

What about you? Were you created to be a cog in the machine or the one who leads and drives it? Not everyone is created to be the driver, but the ones who are need to find the vehicle that will help them escape from being a cog in the machine to being the one who’s controlling it.

When I am talking about an investment vehicle, I am talking about finding a way to earn passive income. Simply put, passive income is doing the work once and getting paid over and over and over again. As an employee, you work one hour you get paid for one hour. No matter what your skill, trade or expertise is, you only get paid if YOU are working. I personally do not want to get paid for the hour I work but be paid by the value I create. Passive income can come in many different forms but the essence is to have your money work for you.


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I believe the entire goal of quitting your job is to have the time to do what you want, and not what someone else tells you to do. There are a lot jobs that are terrific and people even love the job that they do. But there are others who do not fit the “employee” mold. There are also those who just plain do not want to work at all. I am not talking to those people. I am talking to those who want quit their job so they can work hard on the things that pleases them and brings them even more money than they earned at their job.

With passive income if you stop working you are still being paid as opposed to a job. The amount of hours that you work is the amount of pay that you receive. I have many posts that show how passive income in rental properties allows you to get paid over and over again from the 10 hours of work you did at one point many years ago while still being paid every single month.

Let’s look at what are the three things you need to understand when you are looking for a place to invest your money.

Risk/Reward/Liquidity

There is one rule of thumb that you can’t use when you decide to invest: The greater the reward, the greater the risk. The reward would be the total amount of interest earned for your money and the risk is how likely you would lose the money you have invested. If you invest in something that has a high return, the risk of losing that money would be high as well. The opposite would be if you invest your money in something that has a low return, the risk of losing them below as well. Also, with the higher the risk, the less likely you will achieve the return. The lower the risk, the more likely you will achieve the return.

Take Risks Quote

Low Risk = Low Reward = High Ability to Achieve the Return

High Risk = High Return = Low Ability to Achieve the Return

For example, investing in the stock market would have a higher risk but a greater reward than investing in a savings account where there is little to no risk as well as little to almost no return.

Be very wary of any investment that has little to no risk but claims to have a very high reward. There are many ways that confidence men try to take money from unsuspecting hard-working people. Even in the real estate investing business, there are many “Guru’s” out there that say they will show you how to make money in real estate without any money or any hard work.

Another example of a confidence scheme is referred to as a Ponzi scheme. This more widely known con was recently made famous because of Bernie Madoff. A Ponzi scheme is a deceitful investment where the organization pays returns to its investors from new capital paid to it by new investors, rather than from profit earned by the organization running the investment scheme. What Bernie Madoff did was take money from new investors to pay his old investors interest but never actually made any money. This type of scheme only works as long as new money can be put into the system but eventually that will run out. I say all this to help you to keep a watchful eye on your money and not go after get rich quick schemes and other ways confidence men will try to take your money.

My Experience With Bad Investing

I personally almost fell victim to this Ponzi scheme in Fresno Ca. I was told about how a great investment opportunity would return my money with 10% interest compounded monthly with a 3 month commitment. This was a high return with “no” risk investment. I would make 10% on my money each month for three months. Without doing much to investigate the company, I took $10,000 of my money to the office of Heritage Pacific Leasing and was ready to “invest” it with the company because of the great returns.

I entered the office to find no receptionist. I rang the bell to let the employees know I was in the office and a secretary came out to great me. After informing her that I was ready to invest my $10,000 into their company, she told me that the company is not taking any more investments at this moment. Being shocked and bewildered, I left with my $10,000 confused.

That day, I found out that the owner of the company had just committed suicide the night before. Apparently he was under investigation from the FBI and his Ponzi Scheme was coming to an end. I had been considering investing in the company for a few months prior but just never took the time to give the company my money. Praise the Lord I was not able to give our savings to this company and have it lost for ever. If I had been one day earlier I would be $10,000 lighter and much further behind the investing game that I am today.

Liquidity

Another factor is how quickly you can access your money that you have invested. This is called liquidity. Investing in real estate has a low liquidity because it takes a long time for you to get your money’s out of the property that you bought. This process can take weeks to even months to get your money back out of the property you invested in. Investing in a stock of a company would have a moderate to high liquidity because all you need to do is sell your stock and pull your money out in the matter of a couple days. Likewise, investing in a savings account will allow you to access your money quickly, without any penalties or delays in getting your money.

Let’s look at what types of investment vehicles you can employ to help you earn passive income to replace your earned income.


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Investing in Real Estate

Risk: Moderate – Can be lessened to “Low” with education
Reward: Moderate – Can be increased to “High” with education
Liquidity: Very Low

Buy and hold:

This method of investing in real estate is to buy a property and hold onto the property while you rent it to a tenant who pays you monthly rent.  The rent should cover all your expenses and mortgage payment and leave you cash flow after all the expenses are paid. In my opinion, this is the best passive income idea out of them all. This is because you buy the house once, fix it up to be rent-ready, employ a property manager who will rent out the property and maintain it, and you’re done. Now all you need to do is collect your rent check from the property manager each month. Your money is working for you in your property in five different ways. Your property is the thing that is doing all the work.  Check out my post where I show how rental properties are the best investment for passive income.

You can get my FREE Investing Course on Rental Properties instantly:

Real Estate Strategies that are NOT Investing

Wholesaling:

Wholesaling a property is basically acquiring a contract on a property for a low price and reselling that contract to an investor for a higher price or for a commission. There many times were wholesalers can make $5000-$50,000 depending on the transaction and deal that they found. I personally believe that this is not passive income.  I don’t invest my time and y and time. It’s not really an investment because if you do not work, you do not earn any money. If you do not get the next property under contract and find a buyer for the property, you won’t make any money. But this is a way for you to make in a relatively short period of time.

Flipping:

Flipping a property is basically buying a property for a low price, fix up the property so the value is higher than it was when you purchased it, and sell it to a buyer for profit. It is not uncommon for someone to earn $20,000-$100,000 on one flip. Like wholesaling, I don’t believe this is a way of investing in passive income because it’s more of a job. If you do not find the next property to flip, you don’t earn any money.

Investing in the Stock Market

Risk: Moderate –If the company does poorly on its earnings the stock price will go down
Reward: Moderate – The stock market gains typically 8% to 10% per year
Liquidity: High – You can take your money out very easily

Investing in stocks, bonds, mutual funds, etc. is basically giving your money over to someone else to use.  In the stock market you are basically buying a part of a company, which is called a share in the company.  The value of that stock goes up and down as the company earns or loses money.With stocks, there are only two things you can do to make money: Hope and Wait.  You must hope and wait for the value of the shares to increase so you can then sell it at a higher price.  An individual investor has no say in the company and how it is ran.  The board of directors and the CEO are the ones who lead the company to either make a profit or lose money.

One positive way I can see possibly investing in stocks is to buy into a company that pays dividends.  Anyone can invest in a dividend paying stock which pays monthly or quarterly dividends (profits the company made above all expenses) which is a good way to have cash flow coming in.  The bad thing is that you need to invest millions of dollars in order to get any sort of dividend to live off of.

If you invest in a good company and their profits continually go up the price of the stock will go up. If you buy the stock at a low price and the company does well year after year, your shares should have increased then you have gained value in those shares.  If you buy the shares at a high price and sell them at a low price you lose value in those shares.  You realize your gains or losses when you sell the shares, not when you buy them. The difference between the buying price to the selling price is your profit or loss.

I personally do not put my money in the stock market for many reasons.  You can see how a 401K and an IRA have many problems that are costing you money. The bottom line is that you or I cannot control any of these companies thus cannot control my return on my money. I have personally lost over $10,000 in the stock market on a few different occasions trying to learn how to invest in the market. After those losses I realized that I do not enjoy investing in stock market and have found there are many better ways to invest.

Now I will say that there are many great investors who do a great job investing in stocks. Two people come to mind quickly for me are Warren buffet and Jim Rogers. These two men are brilliant investors in the stock market and of earn millions of dollars from it. Jim Rogers made so much money that he doesn’t have to work anymore and lives off the dividends that the stocks payout. Warren buffet continues to invest in the stock market, probably because he enjoys it, and he’s very good at it. There are many such men and women that do terrific in the stock market. I know that I am just not one of those people.

Investing to Gain Interest

The definition of interest is: Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. By that definition there are many possible ways to get paid regularly with your money.

Bank Savings Account

Risk: Extremely Low – Extremely unlikely you will lose your money
Reward: Extremely Low – Currently earn .010% monthly on average
Liquidity: Extremely High – You can take your money out very easily

The simplest form of interest would be to put your money in a bank savings account. Usually this is the lowest amount of interest you can earn from your hard earned money. I recently opened a savings account with Chase Bank because they advertised how they would give me $200 free to open a savings account with them. All I had to do was put in $1,000 to fund the account and I would earn $200 within the next month for free.

I read all the rules for this free money and found that I can put the money in a savings account and then as soon as I receive my $200 I could then pulled my money back out and use it however I want. The only thing that they required was that I would keep the savings account open for six months with a regular withdrawal of the minimum of $25 from my checking account into the savings account. I saw this as a way to make $200 in 15 minutes, so I jumped on it. That comes out to $800 for one hour of work!

For me, a bank savings account is not a way that I invest my money but a way that I park my money until I can invest it in more real estate. If you must invest your money in a savings account because it is one of the safest way “invest” your money, I would shop around with other banks to seeing is the highest interest rate.

I personally use Capital One 360 for parking my money. Their current rates are .75% return every month. There are many other benefits that I have found with using this bank for my checking and savings like bill pay, easy transfer, multiple savings accounts, and others that make banking online very easy.

In either bank, I do not put my money there in order to earn interest because the rate of return is so low but banks are a great way to park your money until you need it. A .75% return is good for savings account but it is nowhere near the rate of return that you can get from rental properties. In my post on how rental properties earn you money five different ways, I show how you can easily make 780% return on your money in one year if you invest wisely.


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Certificate of Deposit

Risk: Extremely Low – Extremely unlikely you will lose your money
Reward: Extremely Low – Currently earn 1.010% monthly on average
Liquidity: Moderate – You can take your money out at the end of the term or pay a penalty

A certificate of deposit (CD) is a timed deposit where you indicate to the bank a specific amount of time you will let them hold onto your money for a higher return than a normal savings account. The time frames for the CD vary depending on the bank but they can be in one, five, or 10 year increments but there are others out there. I personally go to www.bankrate.com to find interest rates on local and nationwide banks for CDs and other interest-bearing accounts.

A CD is beneficial for the bank because they are given a specific amount of time that they would be able use your money to lend to someone else at a higher rate.  If you withdraw it before the CDs maturity date, you will pay a penalty for pulling out early and breaking the contract that you sign with the bank. The benefit for you is that you get a slightly higher interest rate for your money than in a savings account. The liquidity is the problem though.  The level is moderate because you can still pull out your money but you will pay a penalty for doing so.

Money Market Accounts

Risk: Extremely Low – Extremely unlikely you will lose your money
Reward: Extremely Low – Currently earn 1.05% monthly on average
Liquidity: Extremely High – You can take your money out very easily

A money market account is a non-financial account that pays interest based on the current interest rates in the money market. Again, I go to www.bankrate.com to find the best money market accounts they give the best return. These do have low risk and relatively low reward but the liquidity is fairly high. The downside with a money market is you usually need higher deposit amount than a savings account or a CD. Sometimes the minimum would be $25,000 deposited in the account or you would incur a monthly fee.

Creating Content That Others Will Continually Buy

A much different way to earn passive income would be by spending your time rather than your money. The most expensive thing that you can spend in your life is not your money but your time. Time is only thing that you can never get back once it is spent. You can’t earn any more of it and you only have a limited amount of time to spend. For this reason, working a job for a living is spending an hour of your time for a defined amount of money. That time that you spent working for the wage you earn may have been spent making more money in a different career.  Also, your time could have been spent creating passive income generating businesses that will continually pay you after that one hour that you worked.

This is basically a way to get paid a royalty for the thing that you produced and that others will sell. Think of how much money the rock band the Beatles have earned over these many years. Each time one of their songs is played they get a royalty from the company who is playing the song. It may have taken the Beatles four or five hours to write and record the song “It’s a Hard Days Night” but they are still getting paid today from the royalties it generates whenever it’s played.

Think about a famous author like Stephen King who has written hundreds of books and continually gets paid whenever one is sold. This is a lasting creation from the author that will continually bring in passive income from the royalties it produces. Stephen King may take one to two months to write a book but will make millions from that one book depending on how many sells.

What about creating a blog or podcast that you would be able to inform your readers and listeners of anything that might interest them? That is also a form of passive income where you spend an hour and get paid continually. This blog post itself will have taken me 2 to 3 hours to write, edit, and post but will be on my blog for years to come for anyone to read. Now I’m not charging any money for the content but I am using this as a way to develop a business where I would be able to generate revenue in many different ways.

With my blog, I can gather readers of my content and I can also gather listeners from my podcast. I would be able to refer these readers and listeners to goods and services that would benefit them and I would make a commission for referring them.

Ways to make money online:

Create a Product: Ask the customers what they are looking for so you can create a solution for them.

Sponsorship: Find companies who want to market to your listeners and charge them a fee for sponsoring a podcast where you mention them in the episode.

Affiliates Sales: Refer your readers and listeners to an affiliate company who will give you a share of the revenue from the sales that you bring them.

Start a Membership/Mastermind Group: start a membership group where your customers pay a monthly membership to be a part of the group. This group would bring a benefit to the customer and help them in whatever they are currently doing.

Mentoring/Coaching: find others who want to do what you are currently doing and mentor/coach them in how you did it so that they can learn and do the same.

Conclusion

If you desire to earn passive income you need to find the investment vehicle that will bring in the income while not getting paid for an hour that you work. I suggest finding something that you are passionate about and figure out a way to make money from it.

I personally am not passionate about writing songs so I would not become a musician.

I am a passionate about real estate rental properties and helping others so this blog fits really well for me. If you are into selling crafts you make yourself, you may look into selling those products online at a place like www.Etsy.com.

Learn as much as you can about the investment vehicle you decide to go with and continually learn about how you can do it better. You should never stop learning but you should only learn the things that will benefit you in the endeavor that you are seeking.

I learn constantly about online businesses and real estate investing so I can continually develop those two aspects of my life. No matter what you choose to go after, do it 100% and never give up.

Persistence is the key to the game of passive income and as you build it, it will build upon itself. The more content I create my blog the better it gets, and the more rental properties I purchase the more money I make to purchase more rental properties.

Don’t try to make money fast, try to make money wisely.

Leave a comment below letting me know what your path to financial freedom is going to be in one vehicle you are going to take. I would love to hear how you’re doing and if there’s any way I can help you.


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Step 4 – Achieve Your Goals With Action

Achieve Your GoalsAlright, you’ve developed the mindset, found your investment vehicle, set your goals, and now it is time to achieve your goals. Like most worthwhile things in life, your goals will not come easy. As Thomas A. Edison said The three great essentials to achieve anything worthwhile are: Hard work, Stick-to-itiveness, and Common sense.

It is up to you now to make up your mind to achieve your goals.  No matter what type of passive income ideas you chose, you need to now work at achieving your goals.  The most important part of a goal is actually having a goal to attain. Make sure you have the right goal in mind that will help you get you to where you want to be. You will be successful in achieving your goals if you work at them every day, week, month, and year.

So, now that it is time for you to achieve the goals that you created for yourself, how do you go about doing that? The simple answer is to take one step down the path that you have created for yourself and keep on moving every day. They say that the journey of 1000 miles starts with a single step, and that is very true. Think about what your life will be like in five years from now if you accomplish your goals. If you don’t make a move right now in the direction that helps you achieve your goals, how much farther back would you be in five years if you don’t take that first step. The first step is the most crucial one because that sets you on that path you need to take in order to achieve your goals.  Don’t get stuck at the road blocks that may come up as you are on your path to success in with your goals.

Let me give you one thing that you can do today to help you accomplish your goals. This one thing will set you apart from most people who set goals for themselves because it gets you moving.

Start Moving!

All it takes to get your goals accomplished is to start moving. Let me give you an example. There are many times where it is hard for me to stop my investing to write blog posts because content doesn’t just come to my mind easily all the time. When I write my blog posts, there are many times where I don’t have the right words to say, the right ideas formed in my mind, nor even have the desire to write.

So what I do is get up from the desk, do some remedial task that gives my mind the ability to think and focus on what I’m going to write about. Could be something as easy as cleaning the dishes, picking up all my kids toys, or even working on my pool equipment in my backyard. These are tasks that do not take a lot of brain power but get me in a state of mind that allows me to get things done. I’m a project oriented type of person and with that I enjoy having lists. If I have a list of things to do I knock them out one by one in order of priority. By doing a remedial task gets me in the mode to keep moving down my list knocking them out one by one.

Even just writing this blog post right now, I just got done cleaning the kitchen and putting a whole chicken on my barbecue for dinner tonight. These do not take much thought to accomplish but gives me the ability to have an actionable item that I can accomplish, and then move onto the next item. All the while I am able to think about what I’m going to be writing in the next 20 minutes. Another small example is if I am writing a blog post, and feel like I’ve hit a wall, I just start writing anything that comes to mind even if it doesn’t make sense. That is what editing is for. So the biggest key that I can give you is to start moving because a body in motion tends to stay in motion and you need all the momentum you can get.

Now that you understand the importance of moving, here are more key traits you need to achieve your goals.

Make a Schedule

A long with moving, another major tool you should implement is to set up a schedule to help you accomplish your goals. You must have a deadline for your goals to help you have motivation to get your goals accomplished. You will probably not succeed if you do not have a working schedule that you can pace yourself off of. Now this schedule should not be anything set in stone but should be fluid and adjustable as you go along. This schedule will look something like a daily, weekly, monthly, and even yearly actionable items for your goals.

For example, let’s say you are a 230lb male right now and you want to weight 190lbs by this time next year. So you have one year to lose 40lbs to get you from 230lbs to 190lbs. Now the trick is to start with the end in view, meaning that if you want to lose 40 pounds in one year, you need to break it down in smaller measurable goals. Since the desired goal is 190lbs, you find the target amount you need to lose by subtracting 190 from 230 to know that you need to lose 40lbs in one year in order to reach your ideal weight and achieve your goal.

Daily:

For a daily goal, you divide the same 40 pounds by 365 days to find that you need to lose .10 pounds per day, each day to achieve your goal.

Weekly:

For a weekly goal, you divide 40 pounds by 52 weeks to find that you need to lose .77 pounds a week to reach her goal in one year.

Monthly:

For a monthly goal, you divide 40 pounds by 12 months to give you 3.333 pounds per month that you would need to lose in order to achieve your goal.

As you can see, breaking down this large goal of losing 40 pounds in one year is manageable because you spread out over many days into little chunks and in the end, they all total up to your desired goal.

Another terrific reason why you set up a schedule is that you can have measurable milestones that help you to track your progress. If after four weeks you should have lost 3.33 pounds but you only lost 2 pounds, then you know that you are behind and even make up your progress. Achieving your goals is all about taking steps towards the end result every day. If there is a day that you let slip by without you working toward your goal, that’s another day that you have to work extra hard to make up for the difference or put off your goal for another time in the future.

Create a Plan to Reach Your Goals

”Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” – Vincent van Gogh

Like setting up a schedule to achieve your goal, creating a plan will actually get you there. The schedule will make sure you have milestones to it attain, but making a plan is the road-map to get to each milestone and ultimately get to the destination of achieving your goal.

Looking back at the weight loss analogy, you can have a schedule that helps you lose .10 pounds a day, but if you don’t actually have a plan to lose that .10 pounds a day you will not be able to make your goal. Your plan can be something as simple as working out five days a week, or as elaborate as documenting each workout, what you eat, how you feel, and how much weight you lose. Depending on how you are wired, you may need very specific directions and plan to get to your destination, or you may only need minimal direction because the desire and attitude is in place that you don’t need to have step-by-step guidelines.

For me, my desires to quit my job in nine months, and I have a plan to buy an apartment complex, a four Plex, and a single family home all to rent out to gain me more income so I can quit my job. Now I have specific measurable goals and milestones and plan to get there but my plan will look different than yours. You need to find out how you are created and work to your strengths. If you need minimal direction then you need that type of plan. If you are the type that needs more of a step-by-step guide than that is a type of plan that you should go and create for yourself. In the end your goal needs to have a plan that allows you to follow in order to be successful in achieving your goal.

Desire Is the Key to Motivation

“Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal – a commitment to excellence – that will enable you to attain the success you seek.” – Mario Andretti

A goal without the desire to achieve the goal is infinitely harder to achieve than one that you have the desire and willpower to put the effort in to achieve. If there is any ability for you to give up on your goal because you do not have desire for it, you will give up much easier because the desire is not there. If you desire something, you are willing to do anything and everything in your power to obtain it. That is how you need to picture your goals, as something that you must attain in order to survive. As an example, there is nothing more powerful than the desire to survive.

Many years ago, the philosopher Socrates was approached by a young man who desired to gain wisdom asked Socrates if he would instruct this young man to to gain wisdom. Socrates took the young man to the ocean and walked him out into the waters. Socrates then asked “What do you desire?” The young man replied “I desire wisdom.” Socrates then proceeded to shove the young man’s head under the water for 30 seconds. Letting up the young man Socrates asked him “What do you desire?” The young man then replied “I desire wisdom.”

Socrates proceeded to shove the young man’s head under the water for 45 more seconds. After Socrates let the young man up out of the water he asked him “what do you desire?” The young man replied “I desire wisdom.” Socrates then shove the head of the young man back under the water out of 45 seconds. Letting the young man out of the water, Socrates again asked him “What do you desire?” The young man gasping and choking replied “Air, I desire air!” Socrates then replies to the young man “When you desire wisdom as much as you desire air, then you will find it.”When you have the desire for something, you have to fight as hard as you can to get it.

Make sure that your goals are ones that you will fight as hard as you can to achieve just like the young man who desired air. There is also another saying that I appreciate. “Necessity is the mother of invention”. To me that means that when you have the absolute necessity to get something done you will achieve it. If you were fired today and there was no unemployment, welfare, or financial support for you and your family, you would find every way possible to make money in order to provide for your family. If you desire to quit your job, the way to gain desire is to think that your job is not guaranteed to you and that you can get fired at any moment. It is actually true that you can get fired a moment but it’s never so real like when you actually get laid off or fired.

So make sure that you have the desire in you to accomplish your goals whatever they are.

Develop a Winning Attitude

Attitude: “The greatest discovery of our generation is that human beings can alter their lives by altering their attitudes of mind. As you think, so shall you be.” William James

Another great saying that I feel applies really well is “Fake it until you make it”. When I first heard this I didn’t really understand the full implications of what this meant. Of course it’s easy to understand the principle behind it but not fully understand how it can actually change your attitude and life. People that have already made “it” in life, no matter what “it” is, have a different perception about themselves or attitude about what they can do. They already believe that they can do whatever it is that they’re good at.  They do not have to convince themselves that they are a winner, a great investor, etc.

If you have the desire to be the next Tony Robbins, Dave Ramsey, or any of these self-help gurus, you need to have the attitude that you know what you’re talking about.  Not just that you know it, but that you actually believe in it and have incites that are worthwhile for other people to hear. If you don’t believe that you actually have what it takes, your attitude will not be there to help you achieve your goal. If you have the attitude that you are an investor, not an employee, then you are telling yourself that you are committed to the direction you are to take.

I remember when I made the shift and change my attitude from a negative attitude about my investing to a positive attitude about my investing.  For many years, I never told anyone that I was an investor because I felt I wasn’t good enough.  Once I started telling others I was an investor, I started to have the confidence in myself and my abilities.  Also, many doors and opportunities were opened all of the place. What I mean is that as I began telling people that I invested in rental properties as opposed to being an employee for the local government, I started to believe that this was my sole focus and I do not need my job any longer. Not to mention that many deals will come when people know that you’re an investor. The attitude alone is what is going to make you successful in anything that you do. If you don’t have the right attitude you’re setting yourself up for failure.

Remember to “Fake it until you make it”.

Keep the Goals on the Front of Your Mind

“By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be. Put your future in good hands — your own.” – Mark Victor Hansen

Do you write down your goals and make them specific so you can actually attain them? Let’s look at the weight analogy again. If your goal is a lose 40 pounds, you have something that is attainable, specific, and measurable, you can work hard towards that goal. If you make your goal to be that you want to just lose weight and not give a specific amount, it’s hard to gauge what a success is.

Write your goals down and read them over every day. This keeps these goals on your radar so that you can work on them daily weekly and monthly. Some people even rewrite their goals every day so that it’s brought into the forefront of their mind and reminds them to work on their goals. Whatever works for you to make sure that you work hard every day toward your goal is what you need to do. The key is to actually work on your goal and writing them down is a great way to keep yourself focused on achieving your goals.

Make it a Routine

Having a routine makes life much easier. You are not fighting against yourself to get things done since the activity is just a part of your everyday life and is just something that you do every day. It could be that the first hour of every day be devoted to you achieving your goals, or 30 minutes three times a day at a specific time of the day. I will give you an example for me, I have made it a routine in my life to listen to the audio Bible every morning as I go to work. Read the Bible is a priority to me so I make it a routine. I usually spend about 20 minutes driving to work and I use that time to listen to the audio Bible instead of music.  Now it’s routine that when I get on the car I plug-in my phone to listen to the audio Bible that I don’t have to force myself to do it.  I just start playing it and then enjoy the Bible as I listened to it.

Another thing that I do is during my lunch hour I always focus on my goals and what I can do to achieve these goals. You can take the entire lunch hour to work on your goals and that would be a dramatic increase from not working on your goals at all to working one hour a day on them. If you think about it, you’re already working, might as well work towards something that you desire that will enhance your life rather than make your boss rich.

Track your progress

Along with the milestones, schedule and plan, you will be able to track your progress as you go along. If you don’t track your progress you will wonder what happened and why you’re not anywhere near you where you need to be in order to achieve your goals. This doesn’t have to be anything elaborate, but it is necessary in order to make sure you’re on the right track. Your plan is basically your map and if you fall off the plan you veer off the direction your map should be taking.  You then have to get back on the right path follow the map and plan in order to achieve your goal.

For me, it is sad to say I veered off my course for about 8 months and went off path in the wrong direction.  I was not following my plan and keeping track of my progress which lead to me being complacent. If I had not gotten off my plan for those 8 months, I may already be retired by now. As it is, I still have nine more months left before I will retire or quit my job. I knew I needed to save six months worth of expenses before I quit my job and in those eight months I actually spent a lot of our savings on random things that didn’t really make our lives that much better.  This did send me on the wrong path that put me eight months out-of-the-way.

Even though I did lose those 8 months, I did not add insult to injury.  I learned the lesson that I need to learn. In any mistake, failure, or troubled times you encounter make sure that you learned something from it. What I learned is that I need to get back to the basics of the Richest Man in Babylon and not spend the money that I am earning. In my book review you will see that one of the cures for a lean purse is to stop spend passive income you earn. You can use that income to make more passive income by reinvesting it over and over again. So I went back through the richest man in Babylon and re-learned the seven cures because these are time-tested cures that have helped me get to where I am today and have now got me back on track to quit my job.

Keep Motivated

The last thing that you need to do is stay motivated toward your goals. Always be thinking of what the outcome is going to be from your goal and focus on that when times get rough. You will find at times that it’s hard to work toward your goals because of many different factors in your life but you must push through those. It may seem like your goal is getting further and further away, and it very well could be. I know for me, the goal got further away when I veered off for  those eight months.  But now I’m back on track and I’m working towards the goal of quitting my job.

The way I stay motivated is to picture the end and have that end in mind all the time. After I quit my job I will have many more hours to devote to my family to my business to my wife.  Just thinking of that keeps me focused on achieving my goals. Depending on what your goals are, and how you are built, you need to find out how you can stay motivated. It could be that you are keeping good record of everything going on with your goals. Or could be that you have an accountability person that will ask you how you’re doing once a week with your goals.  They will keep you on track to achieve your goals and you would do the same for them.

I am currently working with my brother who is my accountability partner for building online businesses and being financially independent. He recently got fired from his job and is now glad that he is able to devote 100% of his time to his online businesses rather than after hours from work. So he and I both have similar goals that we can hold each other accountable. It’s hard to be accountable to someone if they don’t have the same or similar type of goal as you. Whatever it takes though to help you be accountable to someone else that will ask you those hard questions like “have you done any work on your goals this week”?

Conclusion

Having your goals are a huge step in the right direction, but actually achieving your goals is where the money meets the road. You can have 1000 goals but if you don’t reach one of them there’s no point having them. Focus on two or three key goals and then set your plan up in order to achieve them. My one specific goal is to quit my job and I’ve set up many different intermediate goals in order to get there.

Step 5 – Plan Your Escape From Your Job with Financial Freedom

Work SucksThis is the last post of a five-part series on how to gain financial freedom with passive income.

What I consider freedom is being independent from anyone else and their authority over me. Having a job makes me dependent on someone else to provide me with employment in return for my working for them.

If I do not work, I do not get paid.

We have all agreed with our employer that we will work one hour and get paid a wage for that one hour.

This makes us dependent on our job because if you do not work, you do not get paid. Being financially free allows you to not be under the thumb of anyone and not be dependent on someone giving you money for the hour that you work.


**A great movie you should watch is Office Space.  This movie hits the nail on the head showing how much it sucks to have a job. If you have already seen it, go watch it again! 🙂


Hopefully at this point, you have already picked the investment vehicle that will take you on the path of passive income having your destination the financial freedom and independence.

I personally would encourage you to focus on investing in rental properties for many reasons that I have discussed at length. Check out this post on the five ways that rental properties make you money to help you get started.

Or you can take the making money with rental properties video mini course that will set you on the path to financial freedom. There is a lot to learn, but the great thing about real estate is that it moves very slow and you have plenty of time to learn as you go.

plan your escapePlan Your Escape

So how do you plan your escape from your job? Is there some sort of formula, step by step directions, or a road map that will get you there? I believe that it can be all of the above. I have already blazed the trail in making passive income with my rental properties so that I can quit my job. If you follow what I have already done, you will be successful too!

It is not easy to do the things we are scared to do. Quitting your job and living off your passive income is a very scary thing to do. If you are tired of working for someone else and want to quit your job, I’m here for you.

I am blazing the trail for everyone to follow as I quit my job with my passive income in rental properties and online businesses. These two strategies have increased my passive income above and beyond my earned income so I can now quit my job. I want to show you my thought process and plan in order to quit my job successfully and NEVER go back.

Here are the big idea things to think through in order to quit your job in a responsible way.


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Income

How much income do you need in order to survive? How are you going to pay your rent or mortgage, food bills, gas, insurance, etc. if you do not have any income? Let’s say that you do quit your job, how are you going to make money? How much money will you need to live off of? Your earned income is now gone so you need to develop your passive income so money will keep coming in each month.

A big question that you have already hopefully answered for yourself is how you will make your income now that you have quit your job. Remember that when you are working a job you are earning what is called earned income. You want to get away from earned income and work hard to gain passive income.

Passive income is where you work one time and continually be paid for the work you did. For example, it takes me about three hours to purchase a rental property and I get paid every single month by the rents that brings in. There’s no way to actually quantify the hourly wage I am making from those three hours I worked buying the house because the income continually grows each month.

The only time I would actually be able to calculate my hourly wage is if I sell the property and stop making money from the rents.

Another example is my e-book “How to Quit Your Job with Rental Properties” that I wrote and sell on my website and Amazon.com. I believe it took me close to 30 – 40 hours to write, edit, produce, and publish it, but each time the book sells, I make money. I did all the work up front creating the book and now the book is paying me continually.

As you saw on part two of this five-part series, you can see that your investment vehicle is vital to quitting your job with passive income. If you need more insight on how to create income without your job, go back to that post and hopefully will get plenty of information to find the right investment vehicle to invest your time in and create passive income.

Living Expenses

In today’s world, just about everyone needs money to survive. Unless you’re living on a homestead in Alaska, money is an important part of living. If you are like the rest of us, you need your income to help you to survive. Your living expenses will eat up your income and will eat you if you do not have a way to earn income, either passive or earned.

To find out how much income you need each month in passive cash flow, you need to calculate all of your expenses and total them up. The number that you get is your target goal for your passive income. If you haven’t already done it, download and fill out the quick budget worksheet to find your living expenses. Total all your expenses up and that is your total living expenses you need to cover with your passive income if you are to quit your job.

I suggest adding another 20% to your living expenses so you are able to save for future investing. If you currently have expenses that are $3000 a month you need to get enough passive income that covers $3000 plus another 20% on top of that equaling $3600 a month in income. You should be saving and the extra $600 a month and only spending it on investments that bring you more money into your pocket.

Shorten the timeline to quit your job

Another way to accelerate your ability to quit your job would be to reduce your expenses along with increasing your passive income. If you are spending the same $3,000 a month, try cutting your expenses by 30% to accelerate your ability to quit your job.

It could be cutting out cable television, super high-speed Internet, over expensive cell phone and plans, eat out half as much as you currently do, and many other simple ways to reduce your expenses.

The great thing about cutting expenses is that it allows you to save more money to invest. This will allow you to get more passive income faster because you have more money to invest. So on top of you having to make $2,100 in passive income a month instead of the $3,000, you now have $900 more each month that you can invest which will only help you to quit your job even faster.

Since you know that you already make enough to cover your $3,000 expenses you can save that $900 a month. You must know how much it costs for you to pay for the necessities of life. And NO. A latte at Starbucks is not a necessity. Wait to buy those when you have already quit your job and have enough money to splurge on items like this.

Both increasing your passive income and decreasing your expenses will get you on the fast track to quitting your job.


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SaveSavings

No matter how much money you bring in with passive income, the wise thing to do is to always have a savings and an emergency fund. Your savings is where you store all your money that you are going to invest into passive income producing properties.

The emergency fund is something that you do not use to spend on luxury items or investing or anything else. It is there just for emergencies to help you out a tough spots and handle the ebb and flow of passive income.

Since your income is passive it is not constant as a salary or an hourly wage. Some months are better than others, and some months can be pretty bad.

Speaking of bad months I went off track with my spending in year eight of my 10 year plan and spent way too much money. Usually have anywhere from $6,000-$8,000 coming in each month and I Spending like it had always came in. There was a three-month stretch where through evictions, tenants moving out, late rents, etc. I had a fraction of my regular income coming in.

So instead of a $6,000 check I got a $200 check one month, a $400 check the next month, then a $17 check the following month. These were some very bad months for me and I learned a big lesson because it took me off my path and set me back at least 6 to 8 months behind schedule.

I had a small amount saved in my interest-bearing account, maybe two months expenses, but I ran through that pretty quick. With my horrible spending habits and my passive income bringing in a fraction of the total income it usually did, I had to go into my savings in order to pay for things that I normally would have no concern about. After that storm, I changed everything.

I cut my expenses and spending dramatically and have been working really hard to make my passive income as regular and consistent as possible. Be it through evicting bad tenants, lowering rents by 10% to keep people in the unit, to getting section 8 tenants in my properties.

From that point forward I made it my goal to not spend money. After I learned that lesson I started taking pride in not spending any money other than absolute necessities. If something broke, I fixed it myself or did without it.

If we would normally eat out, I decided that we were to cut how much we were spending on food in half and made Top Ramen or PB & jelly sandwiches. Now I know that life is short and you want to spend your money the way you want to spend it, buying lattes, going out to lunch every day etc. but my opinion is that you save that life to when you can afford it through your passive income and you have already quit your job.

I suggest having a minimum of three months, and a maximum of six months of your expenses saved in an interest-bearing account.

So, how much money will you need in an emergency fund for those unexpected expenses? Take your monthly expenses, not including the 20% increase for investing, and multiply it by three to get your minimum amount and multiply it by six to get your maximum amount.

Now that you have your target amount, chip away at it with each paycheck and with each passive income check. $1,100 each month from my paycheck and put it towards my emergency fund. It is not easy but you can do it if you put your mind to it.

Spending Habits

I have already shared my mistake in my spending habits and how spending too much money took me down the wrong path and cost me eight months to get back on the path to quitting my job. What about you? Do you spend all that you earn or even more? Are you going into debt with all the spending you do? Without controlling your spending, you will surely run out of money fast.

My wife and I were raised to not have consumer debt. Consumer debt would be where you buy liabilities that do not bring on any money into your pocket. I was always taught to pay off my credit card balance every single month so I did not incur any interest. One time I did not pay the full balance and I got hit with an interest charge. Seeing that extra charge just for borrowing their money made me realize that I hate paying interest on things that are not earning me any money.

Because we were both raised to not have any consumer debt, we started off on the right foot and did not have to dig out of a hole that we created with extra debt saddled on us. Maybe you may have consumer debt that is eating away at your cash every month. You could be starting with $10,000, $30,000, or even $50,000 or more in consumer debt. This is something that you need to attack viciously in order to start down the path of passive income.

So there are actually two things here that we need to be concerned about. The first one is the amount of debt that you currently have, and the other is how much more debt you accumulating each month with your spending. Are you spending more than you bring in?

The way to figure out if you are going into debt is to take your income minus your expenses.  If you have more expenses than you have income then you are going into debt every month.

The first step is to stop spending more than you make in so you don’t continue going into debt. Everyone has the ability to cut something out of their expenses and it’s your job to now take a hatchet (metaphorically) and hack away at your expenses until you get under your income and stop going into debt. It could be something as simple as bring a sack lunch to work every day instead of going out to eat.

Or could be something as drastic as selling the $30,000 car that you have a loan on that you are paying $600 a month for the payment. Whatever it is in your expenses, be brutal and go after the expenses that are eating you alive. Just think about how much money you are wasting in interest each month because you are over spending.

Now that you’ve stopped over spending, you can now start attacking the debt that you currently have accumulated.

Let me give you an example.

If you have 3 credit cards and 3 other loans that all have a balance on them, I suggest you attack of the card that has the least amount of total debt on it. The reason why I suggest doing this is because you have the ability to get a quick win under your belt by getting rid of this one credit card quicker than all the others.

The other reason is once this credit card payment is gone, you are now able to take the payment that you had been paying on it and now apply that amount to the next lowest balance card.  Each time you pay off a card, you combine that money to your payment on the next card you are trying to pay off. You will be able to get rid of this card even faster because you now have more money to put towards the principal balance.

What you need to remember is that your spending habits will help or hurt you on your way to financial freedom. The more you spend the less money you have to invest. The less you spend, the more you have to invest.

Investing for the FutureFuture Investing

Believe me, I know that it’s hard to gain enough passive income just to replace your earned income let alone any extra income for investing. Even though it’s hard to do, you want to make sure that you can continually grow your passive income by having enough cash on hand to invest.

As I stated earlier, I believe that a good goal would be to have surpassed your earned income with your passive income by 20%. So whatever your earned income is, you want your passive income to be 120% of that total.

If you’re currently earning $3,000 a month, your goal should be $3,600 a month in passive income. With that extra $600, you are able to invest it back into other income producing assets that will bring in more money. So if you save $600 for one entire year you have another $7,200 to invest for your future. After two years that’s $14,400 that you can invest into the future.

Imagine this with me.

Your passive income is like a snowball that you create with your hands. It looks rather small in your hands but once you set it in motion by rolling a down a snow-covered hill, it will get bigger and bigger and roll faster and faster as it goes down the hill. So think of your passive income like a snowball. Your initial investment of $7,200 could be that small snowball in your hands. You use that $7,200 to purchase one rental property that brings in an extra $300 a month which would be an extra $3,600 on top of the $7,200 you earn in the second year.

That is a total of $10,800 in the second year that you can invest. Now you take that $10,800 and you buy another rental property that brings in another $300 each month in passive income. That would be a another $3,600 a year that you can use to invest in assets that bring you money every month. Now your total is $14,400 each year that you can invest.

With this money you can possibly purchase to rental properties with that $14,400 and bring in $600 more each month with these new properties. That would be another $7,200 on top of the $14,400 for a total passive income of $21,600 each year!

How amazing would that be if you continue this process for five, 10, or even 15 years? That snowball that started in your hands grew to a massive passive income producing gargantuan snowball.

If you follow this plan, you will continually grow your income over and over and make money hand over fist with your passive income. And remember, you are not doing any work because this is all passive income.

office space
Case of the Mondays…

How Real Estate Investing Helped Me Quit My Job with Passive Income

While I was building and running my business, I began to invest in real estate rental properties.

As I was seeing the returns from the rental properties, it became even more solidified in my mind that rentals where the best way to earn passive income and investment my money.

I absolutely love how my properties work for me 24 hours a day 365 days a year making me money.
Financial FREEDOM!

I don’t do anything with the properties because I have a property manager who does all the work for me and I pay well. All of the properties that I invest in I get a property manager even if they are in the same city because I don’t want to deal with managing properties I just want to be the investor who makes the money.

In 2007 I bought my first rental property in Ohio and invested all the income from it to buy more properties.

I decided to invest in Ohio because of the great rate of return on the properties compared to California where I live.  I would have a cash flow of $450 each month from only $15,000 invested into the property and I owned them outright.

In CA, I could by a $250,000 home, earn $100 a month, and have a monthly mortgage payment of $1,500.  If I have one eviction, I would be without a renter for 2 months or more.

The carrying costs could be $3,000 as well as cleaning and renting the property.  I could have $3,500+ out of my pocket for that one eviction.

In one year, I would only earn $1,200 cash from the rents which would be wiped out with one eviction.

With the properties in Ohio, I pay on average about $12,000 per home cash and have it rented for $550 per month with little to no mortgage payment.


making money with rental properties

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After my first property was rented and producing cash flow, I refinanced it and pulled out money to buy my second property.

The mortgage payment is only $150 per month and I was able to by a second property that earned $550 each month in rent.  Both of these rentals were single family homes that produce $550 in rent ever month.

$17,000 cash for the first and $15,000 cash for the second for a total of $32,000 and earned $1,100 in rent each month.  I was able to pocket about $850 each month after expenses and the payment for the note on the first property.

Once the second property was rented and producing cash, I refinanced it to pull out money out to invest in more rentals.

From refinancing the second property I was able to buy two properties and now had a total of four rental properties that produced $2,100 per month in rent.

The cash flow on those for properties are $1,800 a month in passive income that I earn by not doing a thing.

Since I was pulling in $1,800 a month in passive income from such little work, I decided this was the investment idea that I would stick with.

I saved all the money I earned from the rents and used it to buy more properties. Each year after that, I bought a minimum of three properties and sometimes even for properties in one year.

After nine years of investing in rental properties I have 19 rental properties and enough passive income from these properties that I can quit my job. These rental properties bring cash flow every month as a means of income that I can replace the earned income from my job.

It was slow going at first, buying one property the first year, two-three the next year, and so on. Now after nine years of investing in real estate rental properties I am able to quit my job because the passive income exceeds my job income.

I have a plan to actually quit my job and you can find out more about my progress reports and my plan here.

Conclusion

We are now at the end of the five-part series of how to be financially free with passive income. I know that there are a lot more things to discuss on how you can quit your job. This will hopefully give you the framework to develop your own strategy or you can follow my trail that I’ve already blazed for you. Now that you have the plan laid out for you, commit to it and believe that you can do it. You can quit your job with passive income even though you might feel like it is a long road with lots of issues that may come up.

Remember that I did this and am therefore you. You two can quit your job as long as you believe in yourself and follow the path.

Leave me a comment below and let me know how you are doing on your path to quitting your job and your passive income. I’d love to hear from you and look forward to you achieving your dreams!


making money with rental properties

Making Money with Rental Properties FREE Investing Course

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5 Steps to Financial Freedom