Doesn’t retirement sound great? It is this thought in our head about the pot of gold at the end of the rainbow or the beautiful valley or something like that. I’ve said it before, but we are fed this rosy picture of never having to want for anything as long as we stay employed at the firm and keep our heads down. Just watch out for that forced retirement.
I have a good friend, call him Sam, who has a high-paying tech job. He is doing something similar to what he wanted to do in his college plan, but not quite. I keep telling him that he needs to go off on his own and develop the programs that he wants, on his time. He just can’t make that scary jump. His guaranteed (so to speak) income instantly would drop to zero and he would have to live off savings, of which he has little. So he tinkers around at home in the evenings and will continue working his job. But more and more he is fearful of younger workers who are coming into the company. They work for quite a bit less money and they are fresh out of school, with knowledge of the newest programs and methods.
His company recently sent him on a trip! An all-expenses paid trip across the country to their new office. What a great reward for years of service! While there…he trained a worker to do exactly what Sam does. Now, this could be an expansion, but a more sinister view is that this could be a replacement. It doesn’t really matter. What matters is Sam’s state of mind. He lives in fear of forced retirement. But he is not yet retirement age as defined by the government. If he were to lose his job, he would have great difficulty as an older worker trying to find a job in another company.
I wonder if he wishes that he would have taken my advice and gone out on his own. I’m not even talking about real estate here, but to be his own boss. He would have other worries but being forced to retire would not be one of them. Get your plan into place as soon as you can. Have a backup plan if that makes you feel better. Maybe you absolutely love your 9-5 job. That’s great! Just figure out your backup plan. Now.
Step 7. Retire?
The question mark is there because it is your decision. You have by now built up whatever empire you have planned. Perhaps you wanted to have ten houses you rent out producing each $1000 income per month, yielding $120,000 in profit every year. It will continue to do so until you die and/or pass them on to your heirs. You have a great manager that you handpicked and trained running the show and you barely have to make a decision by now. You could literally sit on a beach somewhere. All day. Drinking Mai Tais. Or whatever.
That sounds great, but you might want to do more. You love doing this real estate thing and it can transition into a hobby now. Every new purchase you make turns into more profit. You can do it or not as you wish. You can devote as much time per day as you want into acquisition, leaving all the details to your group of managers. This is your end-game. That is what is great about real estate: you get the fun of the chase. The acquisition. The income. The tax benefits. The leverage. The ease of expansion of the business. The ease of selling off parts if you want. The pleasure of watching the monthly rent come in.
If you are like me, your retirement is going to be from your day job. I doubt I’ll ever retire from my real estate empire. I enjoy it that much.
Come with me and we will get into the details so you can build yours.