Overwhelmed by trying to reach Financial Freedom? Use Buckets

[Rick Martin]

I think many of us overwhelm ourselves thinking we need to get to 100 doors to become financially free. There are many ways to skin a cat, so take a few different paths to get there. Try putting different sources of income in buckets to free up your time.

Let’s propose you are trying to replace your salary is $120k/year or 10k/month. Here is how you can reduce the dependence on that salary down to $30k, or more importantly down to 1/4 of your time. We do it in buckets.

For example:

Bucket 1: You have two active investments. One fourplex that pays you 10k/year, and you partner on a 20 unit, and your split on that is 20k per year. Total Active RE = $30k (you still get back your principal and profit at the sale).

Bucket 2: You passively invest $250k across five syndications that average 8% COC. That is another $20k (you still get back your principal and profit at the sale).

Bucket 3: Your new career that earns you income. Maybe you are a new syndicator, wholesaler, Airbnb host, or property manager, and you set that same attainable goal of $40k of annual fees/income as you build your new business. Whatever it is, that bucket’s goal is $40k

Bucket 4: Your necessary evil - your old career that you are trying to break away from. Now that you are consistently earning $90k from the other real estate-related income, you only need to make $30k from your old job, and you have negotiated a way to work part-time in order to do it. Now you are only working a ¼ of the year, and have ¾ of the year to focus on your new life.

$30k + $20k + $40k + $30k = $120k. In order to focus and get that life we want, we need the time to do so, so make it a goal of chipping away at the hours of that W2. Keep in mind, also, that there are many buckets that we can combine to replace that income, and get us to that goal of financial independence sooner. Soon you won't need that last one.