How you can start in 2020 to retire early, this video describes step by step how you can do the same thing.
Before going into the video right away, you first need to understand the two concepts of ‘how to retire early in 2020’.
The first term is retirement, now retiring isn’t like you stop working, and do nothing anymore. the idea of retiring is that you don’t have to work for money anymore, but that money is something that has been taken care of, and that the income you get is automated.
the second term is passive income, now it is not that if you want to retire early, you can just snap in your fingers, and all of a sudden money is being taken care of, and money just flows in by itself. passive income, is income that you gained by doing work up front, and getting the benefits later, in the future.
So with these two terms clear, let’s explain how you can retire early using real estate as your source of income ;)
Step 0: track your expenses, if you dont know how much you use per month, having the number of how much you make per month, isn’t going to make any sense.. otherwise, you will just use all the money that you get each month, instead of doing it the other way around.
once you have tracked your expenses, you know how much you need to have a basic living, and next to that… use all the remaining income to save up for your first real estate property.
Step 1: saving up the amount, save up about 30% of downpayment of a certain property. this is the hardest step, because it may look very silly… living a minimilistic life. and yet have 30k or 40k on your bank account. but the moment you have that amount… buy a property.
step 2: finding a property that fits the needs. the property you would want to find needs to be easy, cheap and reliable, since your job is to make money off the property, and yet… you dont want to find many things broken, i always say, have around 10k ready to repair the place… just simple cosmetic changes. to make the place attractive for people to live in.
step 3: fix up the property, add value to the property. don’t do hard stuff, do the simple things you or a contractor can easily do, but do make the place look more modern.
step 4: rent out the place. now there are different methods to rent out your place, but what is most important is to have a fair balance for income, rent, but also expenses of the property.
step 5: refinance the property. now that you fixed up the property, have somebody living in it… it feels like a home right now. and the bank, where you got the loan from, will like it as well. get someone to reappraise your property, and get a higher loan from the bank. with that, all of a sudden you can get more liquid cash out of your property. your job is to leave in as little money as possible, because that’s stuck in stones.. whereas liquid cash can be leveraged. and if we want to be retiring early, making sure to have more cash on hands, will make you grow faster.
step 6: rise and repeat, the moment you know how this trick works, saving up for the second property will be a lot easier. you know what you are working for, but the most important thing. don’t use the rental income that you get, but reinvest that as well, for the next property you are saving up for…
and the moment you get this ball rolling… before you know it, you have been at it for 10 years, and your retirement is secured! so start today in 2020, and retire in 2030. Have fun, and good luck!