One thing I’ve learned from firsthand experience over the years is this: there can be two distinct reactions to leaving a job. On one hand, there can be pain, guilt and so many sleepless nights spent worrying and agonizing. On the other hand, though, the thought of leaving a job can bring relief and cause eager excitement. No matter which side of the spectrum you fall, there can be no denying that leaving a job is a major life decision.
Nevertheless, building up financial security can help make the transition as painless as possible. In this article, we’ll be examining the three key steps that will help make it possible for you to quit your job through investing in real estate, so you can take time to live instead of feeling constantly like you are on a the corporate rat race that only offers exhaustion.
The three steps to quitting your job through investing in real estate are:
1. Finding your freedom number
2. Building passive income
3. Tracking your progress
Why Leave Your Job?
Nowadays, people who spend their entire professional career in a single company in particular or a single industry in general are rare. These days, the high level of career mobility gives people enough leeway to continually grow and experiment while chasing their dreams. Its not uncommon for millennials to have 5-6 throughout their careers.
Now more than ever, people are seizing control of their own lives, running their businesses, and making an impact through the platforms they’re building. A valuable step towards achieving financial freedom is to build passive income for yourself and your family and with financial freedom comes the freedom to spend more time with your family and pursue your passions.
Nevertheless, it can be excruciatingly difficult to make the change to working less or even not at all, particularly so for working moms. To begin with, there’s the automatic guilt that comes with quitting your job, especially if that job was a high-paying one. This guilt and fear is exacerbated if you live in a highbrow area, where the cost of living is on the high side.
What impact will the change in income have on your family? Will you still be able to contribute financially without the job? Should you keep the job and sacrifice family time? Pretty tough decisions to be made.
Life decisions such as quitting your job are never easy and everyone approaches it differently. However, for most people, the soft landing of financial assurance can make them comfortable enough to quit their jobs, and most times, this financial assurance is in form of passive income.
So, without wasting more time, let’s examine the three steps that will help you build that financial assurance that will give you the confidence to quit your job without any guilt or fear.
Step 1- Find Your Freedom Number
The first thing to do to build the financial freedom necessary for you to feel comfortable quitting your job is to find your freedom number. What’s a freedom number, though? Your freedom number, simply put, is the amount of passive income you would need to cover the costs of your current lifestyle and a little extra.
If you’re able to attain this number, you’ll have been able to get financial freedom. It means that you can maintain your lifestyle without needing to work. How to find this number? A good way to start is by examining your expenses within the last six months. Don’t include hefty seasonal expenses such as holiday gifts or travel costs. Calculate the average of your expenses over those six months, and then include a 10% buffer. That is your freedom number.
Let’s put this into practice. Assuming your expenses over the last six months were:
● Month 1- $9,500
● Month 2- $12,300
● Month 3- $8,700
● Month 4- $10,800
● Month 5- $9,100
● Month 6- $9,600
For these six months, the average expense is $10,000. Include 10% of that and you get $11,000. In this example, your freedom number would be $11,000. Just as soon as you’ve decided what your freedom number is, decide as to whether you want to reach the entire figure in passive income or just a portion of it.
Step 2- Build Passive Income
You know your freedom number and a target to aim for, now it’s time to reach it. You aim to build multiple streams of passive income so that you can attain, sustain and potentially even exceed that number without having to work another day. To be sure, there are myriad ways to build additional streams of income. If you’re resourceful and creative, you should consider writing a book, designing products to sell online, or creating an online course.
It should, however, be noted that these side hustles require considerable amounts of time and energy and maybe are not as passive as you are expecting. This sets us up nicely for the topic of real estate investing.
Quick fact: More people have become millionaires through investing in real estate than through any other career path.
Why is this so? Because you don’t need to have any skill at all to invest in real estate. Just as long as you have some money to invest, you can invest it into cash-flowing real estate and build solid streams of income. Let’s consider a quick real estate investment scenario. Let’s assume you invested $100,000 in a real estate syndication that offers an 8-10% annual cash-on-cash returns via monthly or quarterly cash flow distributions, you could create a passive income stream of $8-10,000 per year, without any significant work.
You build additional streams of passive income with each additional investment, and you can go on building them up until you reach your freedom number. Leveraging passive real estate investments to build passive income enables you to attain greater freedom to live a little more. No matter what path you choose, this step allows you to build multiple streams of passive income.
Step 3- Track Your Progress
For the last step, you will need to be able to track how much passive income you’re earning each month to track your progress towards your freedom number. For one thing, it’s deeply satisfying to watch your passive income number grow each month when you build multiple streams of income. Further, when you realize how easy it is to build these passive income streams, you can plan for the future with greater precision.
For instance, if you decide to invest passively in real estate syndications, you may notice that you earn approximately $350 per month in passive income for every $50,000 investment. So, when you decide to transfer the $200,000 you’ve invested in the stock exchange to real estate syndications, you may be earning about $1,400 in passive income each month.
Granted, that amount is a far cry from your ultimate freedom number, yet it could be enough to take care of a household need, eliminating that particular one from your list. As you continue to add passive income streams, you’ll eventually get to the point where you feel comfortable only working part-time or even quitting your job entirely while maintaining your income.
Conclusion
Simply thinking about quitting your job and settling for reduced income is enough to ignite nasty feelings of guilt and fear, in particular, in anyone. Nevertheless, no matter what your goal for seeking reduced work time, or even quitting the job is (spending more time with your family and kids while they’re still young, pursuing a passion that means a lot to you, starting a business or simply living your dreams), you definitely can achieve this.
If you strictly follow the steps listed above, you can wrest back control of your financial future and start planning now for your retirement. The first thing you need to do is to find your freedom number, then build multiple passive income streams to help cover part or all of your freedom number. Don’t forget to track your progress as you go along.
Building up financial freedom is a long and arduous process, in most cases, and it won’t always be easy to reach the pinnacle. In the same vein, gathering up the confidence to give up your job takes some doing, but it’s all part of the process. Slowly, but surely though, you’ll build up the financial assurance that will give you the confidence to quit your job and turn your attention to those things that matter to you.