![]() On the other spectrum, you can reach Financial Freedom very quickly be down sizing your lifestyle, paying off debt and then living very frugally for the rest of your life. This income should be viewed as in addition to your baseline retirement planning. The benefit of real estate and the passive income it provides will be to allow you to live as large a life as you are willing to build. If you have a diversified portfolio, including a fully funded retirement, then you will reach Financial Freedom even if your “business” real estate empire crumbles. ![]() I do not include the “good-debt” in this Financial Freedom definition because the debt of rental properties should be considered a business and separate from your personal debt. “One has achieved Financial Freedom when they have accumulated enough savings and passive income to cover all expenses in excess, while paying off all personal debts, car loans, primary mortgage, second home mortgage (if not an STR), credit card debt and student loan debt.” So I have changed my Financial Freedom definition…. However, there are many great arguments for why you should not payoff your rental property debt…. ![]() Now if you have reached this level you are definitely winning but to reach Financial Freedom you need to move to the next level of eliminating your debt. In this scenario you have massive amounts of debt and are dependent on rental income to cover your debt and provide you with a source of passive income…. By investing in real estate you can reach a high level of Financial Independence quickly but technically you are not Financially Free… (We fully fund our retirement accounts but invest our additional savings in real estate). In fact, this is our chosen investment asset to speed up our path to Financial Freedom. There are so many benefits to this strategy that there are countless books, blogs, podcasts and conferences regarding the benefits of real estate. In this case, you will likely be assuming large amounts of “good debt” via mortgages but this “good debt” is covered via rental income and actually produces a net positive cash-flow. How?īy increasing your passive income streams while simultaneously decreasing your debt… Now there is actually a lot to unpack here… and this definition becomes more complicated if you are using real estate as your passive income-generating asset. The goal now is to increase your level of Financial Independence to the point that you reach Financial Freedom…. ![]() If you do not depend on others for your income and you have funds available after paying your expenses then you have reached Financial Independence. You are no longer dependent on family for your financial needs and you make a respectable income as a Physician. The good news is that you have already reached some form of Financial Independence. ![]() So how can you reach Financial Freedom?įirst, you need to reach Financial Independence. Achieving this model allows you to practice medicine on your own terms. Now with that said maybe the goal is to cut back on clinical hours a little… There is a great argument to be made that striving for Financial Freedom can improve your overall finances, decrease physician burnout, improve your experience in Medicine and prolong your career (If you want). In addition, you can still practice after achieving your goal. You spent half your life becoming a physician for a reason… There is nothing in the playbook that says you cannot enjoy practicing Medicine while pursing Financial Freedom. We do not subscribe to the idea of saving every dollar to retire in 3 years. Don’t wait to get “there” to enjoy your time in this world. That is one of the reasons that our motto is “Enjoy your Journey to Financial Freedom”. What does it mean to you?įinancial Freedom is the Holy Grail that many will seek but few will achieve. The definition of Financial Freedom is unique to each individual. ![]()
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