What's Your End Goal?

Question

Seems like most posts on here are about the "How" of real estate investing, but not as much about the "Why."

So why do you invest? Is it just to have more and more income? Is it to reach a certain amount of cash flow so you can afford to do something else? Is it just plain too much fun to stop? Has your reason changed over time?

Delwyn A. · Answer

• 1. Income and Cash Flow: One of the primary motivations for investing in real estate is to generate income and achieve positive cash flow. Rental properties can provide a steady stream of rental income, which can be particularly attractive for long-term wealth building and financial stability.
• 2. Diversification and Asset Appreciation: Real estate investments offer diversification benefits by providing an alternative asset class to traditional stocks and bonds. Additionally, properties can appreciate over time, allowing investors to benefit from both rental income and potential capital gains.
• 3. Long-Term Wealth Building: Real estate has been historically considered a reliable method for wealth accumulation. Property values tend to appreciate over the long term, and investors can leverage their investments to increase returns.
• 4. Tax Advantages: Real estate investing can provide various tax benefits, including deductions for mortgage interest, property taxes, depreciation, and more. These tax advantages can help investors reduce their overall tax liability and increase their after-tax returns.
• 5. Retirement Planning: Real estate can be a valuable component of retirement planning. Investors may acquire properties to generate passive income during retirement or even use real estate investments to fund their retirement years.
• 6. Personal Enjoyment and Passion: Some individuals find real estate investing enjoyable and fulfilling. They may have a passion for real estate and derive satisfaction from owning and managing properties, finding creative solutions, or participating in property development projects.

It's worth noting that individual motivations for investing in real estate can vary, and they may change over time as investors achieve their financial goals or experience shifts in their personal circumstances. Some investors may start with a desire for more income and later transition to a focus on wealth preservation or philanthropy. Others may simply find the process of investing in real estate to be fulfilling and continue to do so because they enjoy it.

Jason Nguyen · Answer

I have two portfolios. Cash flow portfolio to offset my living expenses which it's has already did. Appreciation portfolio to make me richer and richer every day. Being a real estate agent/consultant to help people accomplish the same result while spending all the time enjoying life with family. Isn't that the end goal for most people?

Brandon Elliott-Pandey · Answer

My reasons have definitely changed over time but my WHY has never waivered. I plan on seeing this beautiful world God has given to us and Real Estate provided the most opportunities to make that dream a PLAN :-)

Plus, my kids will be set, my wealth generation is basic on autopilot and my creativity can flourish here!

Wonderful question! :-)

Aaron Mazzrillo · Answer

To have enough passive income so I can live like a homeless person.

Lindsay Wilcox · Answer

In terms of 401(k), since I'm 27 and get 100% match from my employer on 5% of contributions, I'm going to stick with a "let's do both" approach. Real estate AND 401(k)!

Matt Devincenzo · Answer

Lindsay Wilcox look up Jeff Brown and he's got some blog posts on why not to invest in your 401K...I'll get back to the why when I have more time and I'm not at work or cooking dinner for a 3 year old.

Mark Podolsky · Answer

For the 3 W's... Work "when" I want.  Work "with" whom I want and Work "where" I want.  Real estate investing provides passive income so I can have total flexibility in my work and personal life.   That's why I love the passive income land investing provides for me.

James Vermillion · Answer

Goodness, my end goal has changed so many times I am not sure what it is anymore.  I try to focus on my short to medium term goals because anytime I set a goal further than a few years out so many unforeseen things change it is no longer valid.

Lindsay Wilcox · Answer

Will, thanks for sharing. I can't imagine how angry that would make me to have worked for 12 years and not have anything in retirement to show for it! That's actually why I like my 401(k), though. It's mine if I ever leave the job! Would be curious why you don't believe in them, but that may be a different discussion.

William Brace · Answer

Long story short, the company I work for was bought out years and years ago by a private equity company. The first thing they did is thinned our workforce to the point of almost killing the company. Then they dropped the pension plans we had, aka retirement. So I sit here with 12 years in and no retirement.

So I buy and hold my real estate as my retirement. I'm not a fan or believer of the 401K. I cashed out what I had after the buy out and paid down a rental and purchased another one. When my rental income begins to exceed what I make from my day job, I plan to quit. Not to retire early, but go find something I enjoy getting up everyday to do.