The 3 Types of Real Estate “Retirement”
How much do you need/want to retire from real estate investing? Of course, this question implies that real estate entrepreneurs actually WANT to retire, and based on the responses from our Best Ever Show Community, this is definitely not the case. In fact, their views on real estate retirement can be broken into three categories: 1) I will never retire from investing, 2) I want $X in order to retire, and 3) If I reach my financial goals, I will shift my focus to other work.
When I asked the Best Ever Community why they initially became interested in real estate, only one response was loosely associated with retirement, which was the desire for financial freedom. Besides the correlation between early retirement and death, I think this is because individuals with a strong entrepreneurial spirit are attracted to real estate, and this spirit seems to never taper off or disappear. In fact, once people get a taste of real estate success, this entrepreneurial drive may even intensify!
Death is My Real Estate Retirement Plan
The most common response was that the investor planned on NEVER retiring. Dan Hanford sarcastically quipped that he didn’t even know what “retire” meant. Matthew Seaton, while wanting a bare minimum of $1 million by the age of 57, would prefer to continue working indefinitely, as the concept of traditional retirement sounds boring and outdated.
Dave Roberts needs 10 gazillion dollars in order to retire. This, I assume, implies that he doesn’t plan on ever retiring either – as a gazillion isn’t a real number.
Jeremy Brown kind of specified a dollar figure that he wants for real estate retirement, which is three times what he is making now. However, every time his income increases, his goal of “three times what I am making now” remains the same. Scaling in real estate investing and achieving your targets will definitely do that to you!
For both Charlie Kao and Stone Teran to retire, it will have to be over their dead bodies – LITERALLY. Charlie envisions himself eventually reducing his working hours, but he will remain in the real estate game until his children bury him. Stone doesn’t have a magic number either. He plans on working until he dies, but with the expectation of working fewer hours and less strenuously as he gets older.
I’ll Take the Cash
One investor specified a dollar figure he would need in order to move forward with his real estate retirement. Eric Kottner wants a net worth of $2.5 million and $250,000 per year in passive income by the time he turns 45. However, he didn’t specify if he would continue expanding from there, shift his focus to other entrepreneurial endeavors, or enjoy a traditional retirement.
Shift in Focus
The third category of real estate retirement is when an investor hits a specified “retirement number,” but rather than setting off into the sunset, they give themselves the permission to shift their focus to something else.
Melvin Music wants $1,000 per day for the rest of his life. It is more than he needs, but he wants that amounts so that he can “do a lot of good and help out a lot of folks.”
Neil Henderson’s bare minimum number is $700,000, assuming his personal residence is paid off and he doesn’t hold bad debt. At that point, he would work to maintain his business, but it would also open up a world of possibilities that would allow him to take greater real estate risks.
Lia Martinez wants $5,000 per month before her real estate retirement, which she is on pace to achieve by August 2018. Outstanding! Then, her plan is to move to Peru and shift her focus to other work, while maintaining her current real estate portfolio.
Julia Bykhovskaia, having a go big or go home mentality, wants a net worth of $20 million and a passive income of $500,000. Her reasoning for this goal is not to achieve it and be idle. It is because she wants the freedom to do what she wants (personally and work-wise), when she wants and with whomever she wants. Also, to be able to help people that she loves and to contribute to the causes she cares about.
From Growth to Retirement
Even if you never foresee your own real estate retirement, written goals are super beneficial for real estate entrepreneurs! This, of course, includes how much money you need to invest and/or save to feel comfortable walking away from the biz. It’s never too early to start planning! Keep a list of both long and short-term goals and, like many of the entrepreneurs above, let the sky be the limit!