We’ve been talking all week about the origins of modern personal finance… and why it’s time to rethink our approach. Today let’s talk solutions.
To me, everything drives towards financial independence. Or financial freedom. Whichever you prefer.
Now, I realize these are often used as buzz words. And the people promoting them pitch the idea that they can enable a life of leisure and luxury. I’m not interested in any of that.
When I talk about financial freedom, what I’m interested in is the ability to live a purpose-driven life. For many of us, working a nine-to-five on the hamster wheel just isn’t satisfying.
So how do we achieve financial independence? It’s really rather simple.
It’s all about the power of assets. Remember Monopoly? Owning assets… that’s the game’s main lesson.
Today, we are in the midst of a sea change. As the economic climate shifts, clinging to old notions can be a losing battle.
Take retirement, for instance. The old system pitched the “nest egg” model. Remember those commercials asking, “What’s Your Number?” The message was simple: Save enough, hit your “number,” then retire.
But let’s be frank. That model is as ancient as a rotary phone. In today’s world, it’s not about accumulating a retirement stash. It’s about acquiring assets that yield income. Assets and income should be on the same team. We shouldn’t have to choose between them.
Here’s my philosophy. If we focus on increasing our income by acquiring the right assets, we make the entire concept of retirement obsolete. Then age becomes just a number. Whether 45 or 65, if our assets generate enough monthly income to cover our needs, voila! We’re independent.
Now, you might wonder, “Where does tax fit in?” So many investing programs promise big returns… but they’re completely mum on the issue of taxes.
Enter real estate – the unsung hero of financial strategies.
With real estate, we aren’t just investing. We’re building a business. And guess what? This venture can be incredibly tax-efficient. Rental real estate brings in more than just money. It can be a source of tax deductions, thanks to expenses and depreciation.
To break it down: Imagine owning ten properties, each producing $600 monthly. That’s an annual income of $72,000. And that income comes in tax-free.
Compare this to the nest egg model where we need to accumulate well over $1 million in financial assets to provide us with an annual income of $72,000 in retirement. Then we will be taxed every time we make a withdrawal from our retirement account.
Plus, every withdrawal we make from our nest egg reduces our assets. That doesn’t happen with rental real estate. In our example above, that $72,000 rolls in year after year without cannibalizing our asset base.
Sound magical? It is! But this isn’t about hitting the jackpot overnight. It’s a calculated, deliberate journey.
While it sounds straightforward, I won’t sugarcoat it. Like any good thing, it requires effort. Real estate isn’t a sprint. It’s a marathon.
The goal is crystal clear: Create a system that leads to financial independence. With the right strategy and patience, we can achieve financial freedom much faster than most would think possible.
But the system is only as good as its components.
Allocating resources wisely and investing in the right markets is key. Once we master that, we unlock a life where our time isn’t tied to a paycheck. We live on our terms, dedicating ourselves to passions, loved ones, and communities.
Before I sign off for the week, let’s bust one last myth. Achieving financial independence doesn’t require a miracle. Nor does it require us to work sixty hour weeks. With the right tools, knowledge, and network, it’s within reach for anyone.
And here’s the thing – those tools, knowledge, and network are right within the grasp of anyone who wants them… if they know where to look. And the best place to look is my new book. It’s titled Beyond the Nest Egg: How to Be Financially Independent Outside of a Broken System.
My goal with the book is threefold. First, I want to de-mystify what’s happening on the macroeconomic stage right now. Then we’re going to spell out exactly how to create true financial security through proper asset allocation. And finally we’re going to map out exactly how to achieve financial freedom through rental real estate.
We’re putting all the finishing touches on the book design right now. Our goal is to publish it next week. If you’d like to be among the first to get a copy, just go right here: Beyond the Nest Egg Book Launch
-Joe Withrow
P.S. Don’t just settle for retirement. Aim for freedom. Embrace the art of financial independence. It’s more than just a dream… it’s a legacy in the making.