Are you going to have enough passive income to live on when you retire? This is the question many people don’t have an answer to. Most people don’t even want to face the fact that some day they aren’t going to be able to work anymore, and have to retire from their job. Here is how the average person looks at retirement:
The average person will get a job with a company and work with that company for 25-30 years so that they will have a nice pension once he or she decides to retire. So basically, that person is working 25-30 years at the same company so that they can have passive income after they decide to retire. During their 25-30 year career, they also open an IRA and a 401k so that they will have a nice sum of money to live off of once they retire.
In my opinion, working for a company for 25-30 years just so you can have a nice pension when you retire is one of the most risky ways to retire, because you are not in control of your passive income. The best way to retire is with real estate, or with businesses that you own.
Real estate can provide you with a great retirement income, but only if you start early. For example, between your 25th birthday, and your 30th birthday you manage to buy 15 residential rental properties and carry 30 year mortgages on them. When you go to retire at age 60, the tenants have paid off the mortgages for your rental properties, and now almost all of the rental income you collect goes into your pocket. If you’re charging $1,000.00 a month in rent for each property, that’s a passive income of $15,000.00. That works out to $180,000.00 a year in passive income. Plus you can raise rent each year to beat inflation.
Retirement is all about passive income. The more passive income you have at retirement, the more enjoyable your life will be during retirement. You should have enough passive income to cover your expenses, with enough left over to do what you enjoy.
