What if I told you that you could retire in a year? You might not believe me, especially if you've seen your investment portfolio eroded from the last few years' stock market declines.
But retirement IS possible in 12 months. It's not a far-fetched scheme and you have the ability to achieve it! I'm going to show you EXACTLY how to do it in this blog post. Step by step. With numbers.
By the end of this blog post, you'll have a game plan to retire sooner than you probably thought possible.
I talk a lot about being virtual real estate investor because I love Deal Making and traveling the world (That's why I'm The DM and The DN!). If you've read my 7 Fatal Flaws that Will Guarantee You'll Fail as a Real Estate Investor (which you can sign up for on the right), I talk about how it's possible to retire early by investing in real estate.
Let's start with a definition: In a previous blog post, I talked about what it means to retire. I define retirement as having the freedom to stop doing what you don't want to do for a living and to start living the life you dream of. If you do what you love to do, it doesn't feel like work and therefore you can "retire" while still earning an income.
Before I talk about retiring and how to do it in 12 months or less, I need to make this disclaimer: The ideas I'm talking about here might not be right for your specific situation. I'm using real numbers from real deals to show you how the numbers work but you might not get the same results. There are plenty of factors that can influence results. Got it? Good. Let's move on...
So, you're wondering how you can retire in 12 months or less. Is it possible! I'm here to tell you that, if that's what you choose, it is possible. If you start right now, you can retire in 12 months or less.
First: The secret to retiring that most people don't know
Here's the secret that has allowed me to "retire" at the age of 27: CASH doesn’t allow you to retire... CASH FLOW does.
I know many folks who have a million dollar net worth but they can’t retire because they are afraid of the cash running out! But when you have cash flow coming in each month like clockwork, you sit back and pursue your dreams to a level most would only dream about.
Cash flow is the secret. You don't need a mountain of cash to retire. You need a consistent, predictable, (and surprisingly small) amount of cash flow each month to retire.
Here's how to retire in 12 months or less
First, you need to figure out how much money you need to make each month to fund your retirement. (I'm not a financial advisor, but this is something you should think about anyway, even if you choose to retire farther in the future than a year from now). I can't tell you how much you'll need but use your current monthly expenses as a starting point. Caution: Don’t over inflate this number. How much money do you need to pay your bills each month? Write it down. If you don’t know, you should make sure to take some time to work on this number; it’s important. (I've provided you with a free, downloadable resource that you can print and use to figure out how much you need to retire: Click here to download the Target Monthly Expenses Worksheet PDF).
That's your target retirement monthly income level. That's your first goal – to just cover expenses. Obviously you can grow from there but let's just focus on the absolute bottom line to get you to retirement ASAP. (You can always shoot for more than that later, of course!).
Second, figure out what you can earn on an average real estate investing deal. I talk about this in a previous blog post series about Trifecta Profits. In one post, I talked about a real deal I've done in the Midwest (a fairly typical deal) that nets me $308/month. If you have never invested before, ask your real estate investing mentor or peers what they earn on average. You need an approximate number here. But each single family should make you around $250 a month give or take.
Third, figure out how many "average deals" it will take for you to achieve your target retirement income level.
Here's an example:
I'm going to use an example here but remember – these are example numbers only and might not reflect your specific situation.
First, I figure out my target retirement monthly income level: Let's say that I live in the Midwest and decide that I can retire comfortably on $60,000 per year. (That gives me some monthly play money, plus remember: I don't have to put anything away for retirement... because I'll be retired). If I want to earn $60,000 per year to retire comfortably, my target retirement monthly income is $5,000/month.
Second, I look at what I can earn from a typical real estate investing deal. In the example I gave in a previous blog post, I said $308 on that deal. But let's be conservative and say $250/month.
Third, I figure out how many cash-flowing deals at $250/month I need to make in order to earn $5,000/month. It's simple math: I need 20 deals.
(Astute readers will realize that I'm only factoring in cash flow – just one of the three forms of Trifecta Profit. That's because for this simple exercise I'm only concerned about cash flow. I'll talk more about this in a moment).
Can you do 20 deals in a year? If you've never invested before, it might sound like a lot. But it's not a lot. It's slightly less than 2 deals a month. Can you do 2 deals a month? Can you spend 30 days doing only 2 deals? Sure you can! I've done it. I know many others who have done it. If you do 2 deals a month, you'll have 24 properties by the end of the year – more than enough to retire on in this example.
How do I do that much? Where do I get the money?
I've talked in the past about digging your well before you are thirsty. Well guess what – you're thirsty now! I hope you've been digging your well. Finding investors for this many deals can seem like a daunting task but here are things to remember:
-
- Some investors will invest more than once. Instead of 24 investors, you might only need 18, 19, or 20 investors (or less).
- The money you make from the up-front cash can help you to fund future deals. (That's Trifecta Profits method #1 – always ask for more money. Read more about it at this blog post).
As I've said earlier in this blog post: You don't need a mountain of cash to retire. You need a consistent, predictable, (and surprisingly small) amount of cash flow each month to retire.
Also note: You would be (on paper) a millionaire and you would have a very large cash reserve for anything that would pop up... you could easily have $250,000 sitting in the bank as well with all this monthly cash flow coming to you monthly! CHA-CHING!
The DM,DN is never going to Retire???
... mean what would I do... travel more? :)
Honestly if you love what you do, you are already retired!
I love Deal Making and traveling so I don't plan to retire. In essence, I retired December 31st, 2005 that’s the first day of my new life when I left to South Beach, FL at the ripe old age of 27. But the possibility is there if I wanted to stop Deal Making and just travel, but that wouldn’t be fun for me.
If you want to retire, I've just given you a step by step way to do it much more easily than you may have thought.
Your never-will-retire friend and mentor,
Mark Evans DM, DN