I was doing the math today to figure out exactly how far away from retirement I really am, so I added a new element to the site so everyone could follow my progress. Unfortunately, I came to an unfortunate conclusion, I don't know if a million is enough?! So, with traditional safe investments I may make an APY of 5%, which would be about 50,000 a year. This should be enough to cover my estimated expenses, even with a kid (remember this would also include no mortgage). OOPS! What about taxes?
I figure now I need to make about $80000 a year pretax to cover my budget. Does this mean I need to save more money, or dip into the principal? I hope not, so my new task is find a way to make about 8% APY on my investment or have a passive income of about $6700 a month.
Since the way this plan has been evolving, commercial real estate has become a primary focus of my investment strategy. I think this passive income may be possible, but what that looks like in terms of real property value money wise is hard to say. If I had one good commercial investment and managed to pay it off I might make this on a property valued at less than a million.
The key to really making my strategy work is finding a good property management company to help me succeed. Managing one or two commercial properties or four or five residential units might be possible for one person. I think anything more would be ridiculous for a person with a full time job. So the trick will be finding a worthwhile property manager that won't cut in too much to the profit.
If you guys have any ideas on better ways to invest a million bucks once I have it let me know!
p.s. I'm going to take my real estate exam on the 18th, wish me luck!
2 comments:
Great idea for a blog! I'd aim to replace your current take home pay when you want to retire because your costs may go down when you stop working but probably not that much. Commercial is the way to go!
Maybe you'll even retire at 39!!!
:-)
Post a Comment