Say the words financial freedom and different things come to different people’s minds.
For some, financial freedom is having a good job that pays them more money than they need to live on each month. With their excess, they can buy fancy cars, a bigger house, or nice vacations. Being able to pay off their consumer debt, having a healthy emergency fund, and having money in the bank to fund their kid’s college create some significant peace of mind.
Others believe that financial freedom is a number. They look to sock away a nest egg of $2 million, $3 million, or whatever their number might be. They believe that hitting that number means they can utilize a safe withdrawal rate and draw down that nest egg to fund their retirement. If the number is big enough, then it should last the rest of their life without running out.
Trading Time For Money
While there is nothing wrong with either of the above definitions, they do come at a high cost…Time. And unfortunately, unlike money, time is not renewable.
Both of those scenarios center around earned income. Earned income is when you show up every day from 9 to 5, working 48 to 50 weeks a year, and you do that for 30 to 40 years. In other words, you sell your time for a paycheck.
As if that wasn’t bad enough, earned income is highly taxed. Now don’t get me wrong, I’m not opposed to work. I’m opposed to having to work. Ultimately, I want to spend my time doing what I want to do. Is it possible to uncouple time from money and receive paychecks that aren’t dependent on your labor? Is it possible to make work optional?
I Think Of Financial Freedom Differently
To me financial freedom is having recurrent streams of passive income that I cannot outlive. It’s having enough income to pay all of my bills without having to work for it.
Sure, I worked for earned income in my earlier years, but I lived on less than I made and I bought cash producing real estate. Over time, the passive income grew and I added to it by purchasing more income producing multifamily assets.
With my assets making money for me, it became less necessary for me to work for money. Again, I’m not advocating that people don’t work, but having freedom of time to do the work you want to do is a real blessing.
So if you agree that creating stable streams of passive income that covers all of your financial needs is the definition of financial freedom then the next step is to discover ways to create that passive income.
Investing In Multifamily Apartments Is One Of The Best Ways To Create Passive Income
If you Google “how to create passive income” you’ll see articles like:
- Top 8 Ways To Create Passive Income
- 17 Passive Income Ideas For Automating Your Cash Flow
- 25 Passive Income Ideas You Can Start Today
If you take the time to read any of these articles, you come across suggestions like these:
- Start a blog
- Create an online course
- Collect royalties from writing a book or a song
- Build an app
- Write an Ebook
- Create a website and sell products
- Rent out your tools
- Consider owning vending machines, arcade games, or laundromats
- License your photos
- Rent out a room in your house
I could go on with their suggestions, but is this the best they could come up with? I mean, really?! Are they serious? It’s not that those ideas can’t work; it’s just that they are so incredibly impractical for the average person.
Despite that, they all get one thing right. They all mention owning income producing real estate. Easily the best and most sensible way for developing passive income and ultimately financial freedom is through ownership of real estate.
Be an Investor, Not a Landlord
Typically the biggest hurdle to getting started with commercial multifamily real estate is the “L” word. Most people’s reluctance to invest in real estate comes from not wanting to become a landlord.
Those instincts are not wrong.
Ultimately, multifamily apartment investing success comes from specialized knowledge. Only those that possess the time, experience, and knowledge base should attempt active ownership and management.
For the rest of us, it is safer to hire that expertise. That’s what fractional investing is all about. Fractional investing is when like-minded investors pool their money together to buy high quality assets in stable markets across the country.
By leveraging the expertise and specialized knowledge of experienced professionals, we can stack the odds of success in our favor while sheltering ourselves from the management headaches. Investing in multifamily apartments is an excellent way to create stable streams of passive income and ultimately financial freedom. Being able to invest in apartments without becoming a landlord is what financial freedom is all about.