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Posted over 4 years ago

Landlords On FIRE - an investment that pays you back

FIRE - Financial Independence / Retire Early - has been discussed over and over again on other blogs.  I'll leave the reader to find websites like MrMoneyMustache.com and books such as The Simple Path to Wealth by JL Collins.  

Boiled down to an outline form, the goal is to save enough "F-You" money to pay your annual expenses for the rest of your life.  Thanks to the Trinity Study, or the 4% withdrawal rate, multiple your annual spending by 25 to get your "F-You" savings goal.  Achieve this number by:

1. Spend Less then you Earn.
2. Save the Difference.
3. Invest the Savings in low-cost broad market mutual funds such as VTSAX - Vanguard's Total Stock Market Index Fund.  

Looked at another way, if you have enough Monthly Passive Income to cover your monthly expenses, you've already achieved FIRE: 
A. Invest some of the Savings in Real Estate.
B. Own enough rental properties to generate enough cash (rental income after expenses) to cover your total monthly spending. 
C. Depreciate the properties over 27.5 years to offset net cash, and  lower your overall tax burden.



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