[USER]

Am I on track to retire by 40?
I am 34, NW of $1.3M

I have:
$114k in cash
$375k in reitement accounts
$706k+ in equity in $2.2M of investment real estate.

$100k of equity in $245k of primary residence*

I generate between $80-130k of free cash flow annually from my rentals and there is about $120k/year of upside potential within my existing portfolio.

My day job is in corporate finance. I make about $135k/year from that.

I’m a very tired 34 year old and do not want to maintain this pace forever.

[Lauren]

The burn out gets real right around 40 years old. Keep squirreling away the financial freedom, then breakaway into something more laid back.

Once you’re total assets get to $4 million, it’s hard to feel joy (utility) from another dollar.

Time becomes the most valuable asset you own.

You need a gap account. Investing in a trust, joint, or individual that doesn’t have age limitations will improve your overall plan.

[Alexandra]

You could stop now and take a part time job doing something you enjoy

[Sherif]

Nice collection of assets. Why is the value of your primary and investment real estate significantly higher than your equity?

If it is because of a split with family members, then kudos to you, you can retire today if you wanted too but maybe try to achieve a habit of spending closer to your min monthly range of $3.5K instead of $10K.

If it is because of debt you owe on associated mortgages, then your net worth is more like negative 200-300K.

At that point you probably will need to work until you are ready to pay off the debt on the real estate (or sell some assets off to pay the balance of your mortgages)

[Tom]

If you quit your finance job and focused on growing your real estate cash business how quickly do you think you could feel retired?

[LaShonda]

I’m so intrigued by the renting by the room- if I understood correctly you are purchasing 3-4 bedroom SFH and then renting out each room.

What types of people do this?

How do you handle common areas etc?

[Dustin]

You are on the right track. I’m 39, NW $5M, retired. You can do it.
Couple questions:

1) Are you maxing out retirement and matching?

2) Why don’t you have any stock holdings?

3) Are you utilizing tax harvesting methods?

4) How are your rentals generating $130k in FCF?

I have 4 rentals and not at those levels. What’s your secret sauce?

[Ewa]

Few question to consider as part of your equation:
Are you currently single, do you plan to stay single, and if not do you see kids in your future?

What is your total annual spend inclusive of all rental expenses?

That said some helpful resources you should play with where you can do Monte Carlo sims based on different scenarios
(options for retirement ages):
Boldin
ProjectionLab

A little more rudimentary but I found really simple in my early journey is to plug in our numbers to evaluate what stage of financial independence.

[Lúa]

You can even pull the trigger now and dont have to wait until 40.

[John]

Heh, if I were in that position at 34, I would’ve either retired, or taken a break and found a more relaxed and enjoyable job, maybe part time.

But then I have a modest lifestyle.

[Mel]

Yes, if you live within your means, you can retire. And when you’re bored, you can come out of retirement and do what makes you happy

[Jeanette]

I could retire just off that cash flow from the properties

[Sarah]

Yes… worst case 10k/mo so $120k a year needed. So you can live just off real estate and leave your investments to grow until “retirement age/phase 2”

[Jade]

If you die at 100, that means you have to cover expenses for 60 years of your life. Can you do that?

[David]

That’s 5 years and change from now. Your earnings and investments look great.

Your variability in your monthly spend and the variability in your annual rental income is making it hard to say if you could FI/RE immediately.

Tighter budgeting and adding more rentals might help to smooth out the variation.

BTW, I’m only looking at this from the POV of rental income replacing your day job income stream.

Nice job keeping your own housing cheap while you build your real estate empire.

[Author]

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