FIRE - The Simple Path To Wealth vs Real Estate Retirement

[Justin Foster]

I've been listening to the book The Simple Path to Wealth by JL Collins.  Its a great read and I encourage anyone who hasn't heard of Mr. Collins if you are new to this investing thing to check out his website

https://jlcollinsnh.com/

In the book, Mr. Collins basically suggests that the most powerful investing vehicle is a long position in the US stock market. He points out that investing in the total us stock market over the last 40 years would have yielded a ~11.9% ROI with dividends invested if someone had just stayed put. He mentions real estate very little so far (I'm just over half way through). I like his strategy, simplicity, and humility on this topic of which he is most certainly an expert. For those of you who have read it, I'm sure you know what I'm talking about.

My strategy for financial independence and early retirement has been heavily geared towards pumping all surplus money into real estate holdings. While I do contribute to my 401K to get the company match, we are heavily putting cash towards long term buy and hold properties in our local market. The potential for returns in our market and indeed the cash on cash I have achieved in my portfolio suggests that REI can have more upside; albeit, I am not a passive investor so this is not an apples to apples comparison. As I strategize about buy and hold properties I simply have a number in terms of # of doors in mind with monthly cash flow as a goal for Financial Independence. The investment strategy of FIRE with stocks and bonds is more focused on a withdrawal rate... Collins says ~4% annual withdrawal of your investment holdings to cover lifestyle. Others may say more or less.

So I'm wondering about others strategies that are diversifying their portfolio with stocks and real estate in the long game.  What are your thoughts of cash flow on the one hand and withdrawal rate on the other? In the short game, what kinds of strategies do you have to do with your cash as you search for real estate.  How do you maximize returns on cash with good liquidity while still protecting your money?