For starters, I retired early at the age of 37 and the question I get asked the most is: “How you you able to retire early and quit your job?”
I LOVE this question because it shows the person asking is almost ready.
They are almost ready to the path to financial freedom that most people won’t. It is not an easy path but…
So worth it in the end. It took me just 6 years to replace my income from my J.O.B. (just over broke) and I want to show you how to do that too.
Benefits of Retiring Early with Financial Freedom:
- Never worry about bills again
- No longer work for that horrible boss or that J.O.B. you hate
- Have time to take up that hobby you always wanted to
- Be free to live where ever you want
- Not think of the price of the meal when you go out to eat
- Buy the car you want, not the car you need
The Steps to Retire Early with Financial Freedom:
- Calculate how much money you need to cover your expenses
- Make sure to add your new life expenses (living on a beach somewhere)
- Learn how to start investing in real estate
- Buy investments that make you money while you sleep
- Buy 1 property that makes you $250 a month in passive income
- Scale your business to 10 properties making you a total of $2,500 a month
- Grow to 20 properties making you a total of $5,000 a month in passive income
- Quit you J.O.B. and never work a 9 to 5 J.O.B. again!
And don’t worry, I’ll give you each and every step of the way in this article.
Honestly, it is SOOO simple, it is CRAZY why more people don’t do it.
It took me 6 years to get 19 properties with $6,500 a month in passive income to retire early and have financial freedom.
Picture Yourself Retire Early 5 Years From Now
Imagine walking into your boss’s office and say you were done. Done and not even giving a two-week notice. How would that make you feel?
- Would that be empowering?
- Would that be a relief?
- Would that make you feel like you are the king of the world?
How would it make you feel to walk away from the job, never work another job again, and have money coming in every single month?
This would allow you to pay your bills, travel the world, pick up and move to another country or state.
Retiring Early With Real Estate Is More than Possible
This is how my life dramatically changed. I learned how to quit your job by investing in real estate rental properties.
Listen to the Retire Early with Financial Freedom Podcast Episode:
I quit my job when I was 37 years old and I will never work another job again. I hope you are as excited as I am to talk about quitting your job.
Even if you haven’t started investing yet, you WILL be able to see the light at the end of the tunnel.
How to Retire Early, Quit Your Job, and Live the Dream with Passive Income
All this is possible with just two words:
You see, there are two types of income — active and passive. Active income comes from working a job and getting paid for the hours you work.
Passive income is where you do not work at all and you still get paid. Investing in real estate rental properties is the best way to earn passive income every single month.
Wouldn’t it be fantastic to get paid from the business you created?
As we are looking at the whole process of retiring early, keep in mind that your life will be dramatically changed because you will not depend on a job anymore.
You will be financially independent, financially free, and able to do whatever you want.
I personally love to travel. I take my family everywhere and we’ve gone to Japan for six weeks and we’ve gone to Europe for six weeks.
If you’ve listened to my prior podcasts, I was actually recording some of them from places like Germany, France, Ireland, and England.
I was recording them in those places, because I didn’t need a job and was traveling around. I still wanted to reach you through my podcast, so I was doing that on the entire trip.
Build Your Dream Life and Retire Early
What if your dream was to live in Hawaii? Let’s say you love surfing and you want to move to Hawaii, but you can’t because you don’t have a job there and you don’t have money to live there.
The beauty of real estate rental properties is that you aren’t locked down to any specific location, state, or country.
You can move to Germany, Austria, Africa, or anywhere you want and never work another job again, because you have money coming in every single month.
I started investing in 2007. If you remember, in 2007 housing prices were going up and the real estate bubble burst in 2008 or 2009.
I still own some of the properties I bought at that time and they are still making me money, because I invest in passive income which is cash flow.
Cash flow is money that comes in my pocket every single month.
When I get a property, I fix it up, get it rented, and make sure I make enough money from the rent, minus expenses.
That helps me live the life that I want. It is all about designing your life the way you want to live it. Gone are the days where you have to work at a job for 30 years and then collect a pension.
Now, it is all about being an entrepreneur and being somebody who creates. Buying a real estate rental property is the fastest and best way to start your passive income business.
I bought my first property in 2007 and bought my second property six months later. Six months after that, I bought my third property.
After six years, I had 19 properties that were each bringing me close to $300 or $400 a month in passive income. During that time, I bypassed a lot of luxuries and vacations.
Our one vacation a year was to drive from Fresno, California to Phoenix, Arizona to visit my in-laws.
That is all we did for those six years. After that, because I had passive income coming in, I was able to go on six-week vacations to Japan and Europe and two-week trips to Alaska.
I’ve taken two-week trips to Boston and to southern states like Texas and Arizona. It has been tremendous, because I can now live the life no one else can, because I sacrificed in the beginning.
The Steps How to Quit Your Job with Real Estate Investing
As we go through the steps of how to quit your job with real estate rental properties, remember that it takes time, patience, and perseverance.
It isn’t a get-rich-quick-scheme.
If you are looking to get rich quick, stop reading, because that isn’t what this is all about.
This is all about becoming wealthy, and by wealthy I mean you don’t just have money, you also have assets, a business, and companies that are working with you.
You start with buying one property at a time that makes you $250 a month.
Let’s jump into this process and the steps you need to take to quit your job with real estate.
Step 1: Calculate How Much Money You Need to Cover Your Expenses
Whether you are single or married, have kids or no kids, you need to figure out how much money comes out of your pocket every single month.
That is normally called a budget, where you go through and itemize all of your expenses to find out how much money comes in and how much money goes out, but the first part is calculating your expenses.
Make sure to include things like:
- cell phone
- automobile expenses (gas, tire changes, oil)
- student loans
- credit card debt
- any other debt
- car insurance
- medical insurance
- medical expenses
- and household items.
By calculating your monthly expenses, you will be able to see how much you will need to take in from rental properties in order to quit your job.
Once your income from your rental property business exceeds your expenses, you can quit your job! Make sure you have a good understanding of your expenses.
Let’s say you are an average family who has average expenses of $3,500 a month.
You will need to not only replace that amount, but you will also need to save for future investing.
However, most people don’t save and live paycheck to paycheck. I encourage you to start saving at least two to five percent of your paycheck every month.
If you make $1,000 per month, take out $20 a month and put it toward saving.
That is called paying yourself first. Save it until you have enough money to buy a property.
Or if you have a really fancy car and your payment is $500 a month. It may be wise to sell the car and buy one that costs $250 a month instead.
That would give you an extra $250 a month! You may love your car, but you need to cut expenses so you have more money to invest.
After nine years of investing, I was able to not only quit my job but I could buy whatever car I wanted, because I had so much money coming in that I didn’t have to worry about it. You want to get to that place as soon as possible.
Cut those expenses! Whether it is going out to eat less or just eating at home or packing a lunch.
Being on the other side of that, I can tell you, now I can eat out every single day if I want, because I sacrificed early on.
Step 2: Find Ways to Increase Your Income for Investing
It is all about getting more money in your pocket so you can buy properties. Let’s say you have a job where you work from 8:00am to 5:00pm.
There are ways to buy properties with low or no money down, but that is really hard to find.
It isn’t impossible, but it is difficult and takes a lot of work. It is so much easier to have cash available and give cash offers.
You still want to look at other ways to buy, like mortgages, other investors, seller financing, etc. For more on this topic, check out podcast episode 002, 7 Ways to Fund Your Rental Property Deals.
Step 3: Find Your Target Income for When You Retire Early
After you know your expenses, look at your future spending too.
- Do you want to travel the world?
- Do you want to move to Hawaii?
- Do you want to buy that expensive car?
Think of what you want to do and how much money is it going to take to live that lifestyle.
Let’s say you are bringing in $3,500 a month and you want to bring in an extra $500 to go toward future spending. Make sure to add that into your target income, so you know what to shoot for.
You will need to find enough properties that bring in passive income that give you $4,000 a month.
In addition to calculating your expenses and future spending, don’t forget to add in saving for future investing.
Imagine that you are still bringing in $250 a month, because you cut your car payment in half and you are putting that away. Don’t stop that —continue to put it away.
Step 4: Locate a Good Area to Start Investing
I talk about this extensively in podcast episode 005, How to Find a New Area of the Country to Invest for Your Real Estate Rental Business.
In this episode, I talk all about how to find a new area and what to look for. It is a great way to invest. A lot of people get scared about this, but I invest all over the country.
I have property managers everywhere running my business and I don’t do any of the work.
If you can find a property in your area where you can make money, go ahead and buy it. If you can’t, look at other places. I bought my first rental property in Ohio and I was living in California.
It was so much cheaper to buy in Ohio and I can make money every single month.
Step 5: Build a Real Estate Team to Automate the Business
Get a property manager and five or six realtors that are looking for properties for you.
You need to find:
- Property managers
- And many others
Obviously you will pay them, but you are not going to need to do any work. Your company is going to do the work for you.
Making Money with Rental Properties FREE Investing Course
Get it FREE and Subscribe to the MPI Newsletter with loads of investing tips, advice, and advanced strategies for investing in real estate.
Step 6: Determine How Many Properties You Will Need to Quit Your Job
Do not buy a rental property that doesn’t make you at least $250 or more a month in passive income. Wait until you find a property that makes at least this much or more.
Don’t settle —be diligent.
You may need to find properties that are off-market and you may need to talk sellers into coming down on their price. Once you do the work, you will find that there are plenty of fish in the sea.
There are so many properties out there — you just need to wait for the right deal to pop up and jump when you see it.
To determine how many properties you need, let’s look at $250. This is the amount you are going to shoot for on every single property you buy. This is the minimum, but I recommend trying to get $300.
If your target income is $4,000, divide that by $250. That comes to 16 properties. Remember, you are retiring early, so you need to make sure you cover all the expenses.
Sometimes it is hard to get started and to buy the first property, to know what you are doing, and to do it right. This is something I teach my students all the time.
I love working with new investors, and seasoned investors, and teaching them how to start their business and how to grow their business, so they can quit their jobs.
I do coaching and I have an online course that is full of videos that walks you through the process from beginning to end.
When I coach my students how to invest in real estate, I actually work with individuals, help them find properties, and help them build their businesses by making sure they buy the right properties and get them rented.
Step 7: Buy Your First Property
Here is the Ultimate Guide how to invest in real estate I recommend you read to learn how to do it.
The first property is always the hardest to get past the fear.
Step 8: Save Your Money for the Next Property
It will be very tempting to spend the passive income you get from your first property.
However, that will take away the ability to grow your business faster.
If you save an extra $250 a month, that is more you can put toward another property.
If you are already saving $250 by cutting your car payment in half, that’s $500 a month you are saving.
Step 9: Continue to Buy Properties when the Opportunity Arises
As soon as you have the financial ability, continue to buy properties as the opportunity arises.
Continue to go after the next deal.
You need to have the financial ability, whether that is cash in the bank, an investor, a family member, or mortgage.
If you cannot find a property that will make you at least $250 a month, don’t buy it.
Build your business so you find leads from realtors, wholesalers, and other people who are in the game. You want to be able to jump on the deal when it comes up.
Step 8: Don’t Spend the Passive Income
The longer you delay the gratification of spending the passive income, the quicker you can quit your job.
Saving it will allow you to buy more properties, so you can live the dream life later.
As you can imagine, this becomes a snowball and it gets bigger, and bigger, and bigger and pretty soon you can’t stop the money from coming in.
Step 9: Scale up Your Business by Refinancing Older Properties
In podcast episode 006, BRRRR Method to Drastically Increase your Rental Property Portfolio, I talk about how to increase your business growth and income by refinancing and using other people’s money (OPM).
When you refinance the property, you can use the equity to buy another property. It is amazing how fast you can grow your business by using OPM.
Step 10: Repeat the Process Until You Have Enough to Replace your Income
If you need 16 properties, keep doing this until you get 16 properties. It took me six years to get to my target income.
Step 11: Read Successfully Unemployed to Retire Early the Right Way
I wrote this book and it is going to show you how to prepare for a life without a job and retire early.
Everybody is so secure having a job, because having a regular paycheck coming in every month feels good. You can count on it being there. When you get rid of that security blanket, there are a lot of concerns that come up.
I have 16 different lessons to teach you like growing your business, having the drive of an entrepreneur, working on your business not in your business, and finding the right time to quit your job.
There are so many different lessons in this book that will help you prepare and when you quit your job you will be able to be successfully unemployed.
Step 12: Retire Early and Quit Your Job!
When you have enough money coming in, quit your job. I actually waited a year longer than I should have, because I was gun shy.
The security of a regular paycheck was too great and it was great getting both types of income.
However, I realized that I was actually losing money by working my job.
This was because even though I was making $45 or $50 an hour, I make more money investing in real estate per hour than I ever would at a job.
I make something like thousands of dollars an hour even in my retirement!
It only takes me three hours to buy a house. If I buy one a month and it brings me $250 a month, those three hours are going to make me close to $84 an hour.
Imagine me spending my time making $45 an hour when I could be making $84 an hour just from one month of rent. Imagine a lifetime of owning that property.
After 10 years of owning that property, I will have made thousands of dollars for those three hours of work. Retiring early, sooner than later is better, because you can use your time to build your business faster than ever.
It is so much better to not have a job. If you reach your target income, don’t put it off!
Pulling the trigger and saying “Boss, I quit!” is hard to do than not. But once you quit your job, you are going to wish you did it sooner.
It will be such a relief!
If you want to work with me, go to https://www.masterpassiveincome.com/courses to learn more.
- Real Estate Leverage | Get Funding for Real Estate Investing with Financing from Other People’s Money
- What Does House Poor Mean and How to Not Fall Into The House Poor Trap
- What is Pier and Beam Foundation
- Is It Better to Rent or to Buy a House?
- Guide to Rehab a House and Fix Up a Property Yourself or Hire Someone Else
Premium online courses for any level of investor: beginner-advanced. Completely go at your own pace and can be taken through "Self-Study" or through "Membership".
Inside the membership, attend live 90-minute Group Coaching sessions with Coach Dustin Heiner as he and the MPI Coaches teach you how to build a successful real estate investing business.
Connect with the MPI Coaches and the other like-minded investors inside the MPI Mastermind Community. Ask questions about investing and get feedback how to be successful in your business.