How To Quit Your Job Through Investing In Real Estate

2April, 2020

How To Quit Your Job Through Investing In Real Estate

By Shirley Xu

Do you like your job? If you do, congratulations! If you hate your job, have you thought about leaving ?

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

Quitting a job without financial back up can be dangerous. Don’t let your emotion take over you, you should plan in ahead. You might consider building up some financial assurance to help ease that transition.

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

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

Finding your freedom number
Building passive income
Tracking your progress

Why Leave Your Job

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

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

However, there will be many concerns: How will the change in income affect your family? How will you be able to continue contributing financially to your family?

Many of the people I talk to want some financial assurance before they feel comfortable quitting their jobs. (I am on your side, and I don’t think you should ever quit your job without backup). And often, this financial assurance comes in the form of passive income.

Then what are the steps you should take to ensure you are covered before quitting?

Step 1 – Find Your Freedom Number

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

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

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

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

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

Month 1 – $9,500
Month 2 – $12,300
Month 3 – $8,700
Month 4 – $10,800
Month 5 – $9,100
Month 6 – $9,600

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

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

Step 2 – Build Passive Income

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

Although there are many ways to build additional streams of income, and people who turn their hobby into a successful business, create youtube channel to share their knowledge …I was impressed that one of my friend is making several hundred even thousands per day on youtube.

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

Which brings me to, real estate investing.

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

Many of us don’t have the special skill / talent to do the side hurstle, some of us may not have time even invest actively in Real Estate, As long as you have some money to invest, you can put it into cash-flowing real estate and build pretty solid streams of passive income.

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

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

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

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

Step 3 – Track Your Progress

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

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

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

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

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

Recap

Whether your goal is to quit your job so that you can spend more time with your kids while they’re little, to pursue a passion project, or to start a business to change the world, you can do this.

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

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