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In order to understand why and how to retire on cash flow properties, it is first essential to understand that there are two very different philosophies about retirement
The overwhelming majority people pursue the Deferred Life Plan. It says you should work hard your entire life for somebody else with minimal vacation time, build up a “nest egg” (a finite sum of money), then retire at age 65, reduce your lifestyle and hope that you die before your nest-egg runs out.
The Maverick Plan says that building a portfolio of cash flow properties enables you to convert your hard earned money into streams of passive rental income that flow to you every month without you having to work for them. So, the more cash flow properties you own, the larger your stream of passive rental income and the more of your monthly expenses it covers. Then, when all of your living expenses are covered by your passive residual income, you have reached financial freedom because you no longer need to work for active income to finance your lifestyle.
Financial freedom allows you to recapture your time, which is really your most valuable asset. Then, you can spend more time with your family, travel the world, and pursue your dreams and passions in the present. And you won’t have to wait for some amorphous retirement date in the future. Rather, you can design your dream lifestyle today. Then, as you get into your golden years, you won’t have to worry about a finite sum of money running out. That’s because you’ll have a passive residual income stream that flows to you–a goose that lays golden eggs, and one which can be passed on to your heirs.
Learning how to retire on rental properties and become financially free starts with motivation. First, you need to get in touch with your interests, passions, dreams, goals and decide how you would like your lifestyle to look if money and time were no object. So, think of things you want to have, but even more of things you want to do (places you want to travel, skills you want to learn, experiences you want to have, etc). Most likely, some of your most important items won’t even cost any money. For example, coaching your daughter’s basketball team just requires time, which you will gradually be recapturing as you build your passive residual income streams. So, this list will serve as your motive and inspiration for buying rental properties.
Now you need to quantify your goals. In order to retire on cash flow properties, you need to know exactly how much passive income they must produce to cover the expenses of your dream lifestyle. So, for the items that cost money, list them all. Include everything from groceries, rent and car insurance to charitable contributions to experiences and learning pursuits. Maybe you want to learn to speak Italian, or take Tango lessons, or live in a foreign country for 3 months out of every year. But, whatever it is, price it, itemize it, and amortize the cost on a monthly basis.
This is just an example of the format, obviously you will have different or additional itemized expenses, so be sure to get them all down so you don’t underestimate. Then, total them up so you have “your number”.
Your Number = The amount of passive residual income needed to be financially free.
Write your number down and post it prominently where you can see it along with your list of dream lifestyle components it will afford you. So, in the example above, the number is $5,000 of passive monthly income, so we will use that to demonstrate. Now you have your motive, inspiration and quantifiable goal.
| Description of Lifestyle Expenses | Monthly Cost | |
| Food/Groceries | : | $600 |
| Rent/Mortgage | : | $2,000 |
| Contributions to favorite cause/charity | : | $500 |
| International Airfare for World Travel (remember, expenses amortized monthly!) |
: | $400 |
| Italian Language Class | : | $40 |
| Tango Dance Lessons | : | $60 |
| Car Payment, Insurance, Gas | : | $700 |
| Fun/Entertainment | : | $700 |
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| TOTAL | $5,000/mo | |
Next, start (or continue) buying cash flow properties in the best real estate markets and building your portfolio. Be sure to Conduct your real estate investment analysis and confirm how much cash you expect to have in your pocket each month from each property. Then, as you close on each property, subtract its net monthly cash flow from "your number" so you have a running tally of how much passive rental income you still need.
| Cash-Flow Properties | Net Monthly Cash Flow | Remaining to hit $5,000 |
| 123 Main Street | $600 | $4,400 |
| 742 Sprucewood Lane | $400 | $4,000 |
| 612 Cypress Ave | $800 | $3,200 |
| 834 Lakeview Drive | $500 | $2,700 |
| 972 Cedar Court | $700 | $2,000 |
| TOTAL | $3,000 | $2,000 |
Finally, Keep learning and honing your real estate investment strategy as you continue to buy cash flow properties. Maverick is here to help you identify the best real estate markets. build your portfolio, strategically mitigate risk, hit your investment goals and achieve financial freedom. You can do this! Just remain mentally focused on the incredible incentives that occur when you hit "your number"! And remember, your ability to retire on cash flow properties is not only about the passive residual income to finance your dream lifestyle, but also about recapturing the time you need to enjoy it!
Maverick can help you design your own personal plan to retire on cash flow properties at no cost. Register for your free, one-on-one video consultation with Maverick.
WE ARE NOT LEGAL, TAX, OR FINANCIAL PROFESSIONALS. THE CONTENT ON THIS PAGE IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS INDIVIDUALIZED ADVICE. IT IS YOUR DUTY TO CONSULT WITH YOUR OWN TAX, LEGAL AND FINANCIAL PROFESSIONALS ABOUT YOUR INDIVIDUAL SITUATION, APPLICABLE LAWS, AND THE SUITABILITY OF ANY INVESTMENT PROPERTY FOR YOU PERSONALLY. ALL REAL ESTATE INVESTING INVOLVES RISKS, WHICH BUYER ASSUMES, AND NO SPECIFIC RETURNS CAN EVER BE GUARANTEED BY ANYONE.
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