💲 My Plan To Retire In My 20’s | Financial Independence Retire Early With Real Estate

That’s right, there is a proven plan to retire in your 20’s with real estate! It was once impressive to retire at 50 years old, but today, there are plenty of 20 somethings who are following the financial independence retire early (fire) movement and retiring before their 30th birthday. If you follow my plan to retire in your 20’s with real estate you too will be well ahead of the curve, and will likley be retiring before your parents and grandparents!

Can You Really Retire In Your 20’s?

I’ll admit, the idea of retiring in your 20’s sounds unrealistic. We’re taught all of our lives that we need to graduate highschool, go to college, get a degree, and then work all of the best years of our lives until we’re too old to really enjoy it. And while the plan of retiring in your 20’s sounds like a clickbait YouTube title, the truth is, that it is very possible to retire early with real estate. And not just early, but much much earlier than what you’ve been taught by society.

Instead we are taught this idea that we can’t leave work for more than a week or two until our backs hurt, we can’t see or hear, many off our friends have passed away, and we can’t enjoy hiking the pyramids, exploring machu picchu, salsa dancing, or many of the other things that most dream to be able to do with our their free time. 

This idea that you need to work all of the best years of your life is flawed. The fact is that work does end up consuming the vast majority of our lives. Waking up every morning, working for 8+ hours, doing chores, eating, sleeping all on repeat. Living life for the weekend, and the one or two week vacation you get per year… if you’re lucky.

If you think about it, you spend one third of your life sleeping, one third of your life working, and only have a third left, and most of the third that you have left you don’t get until your 65+ or older. 

Well, I’m here to tell you it doesn’t have to be that way. I’ve got a plan based off of others who have successfully completed the journey to financial freedom and are examples of the Financial Independence Retire Early or FIRE movement. And I have personally made quite a lot of progress towards this goal myself in the last year.

I started my business four and a half years ago as a real estate agent. I got the idea of getting into real estate sales after buying my first house at the age of 21. I had been studying real estate investing in preparation for my first home purchase, but realized I didn’t make nearly enough money to buy the number of houses I would need to retire fast enough. At this rate it was going to take me 5+ years of saving to buy another house and I wouldn’t ever hit financial independence or early retirement.

I worked hard that first year in business, and my business ended up paying me well. I went from making 30k the year before at my bank job, to literally over tripling my income to over $100,000 my first year in real estate. 

But this alone isn’t the answer to retiring in your 20’s. There are plenty of real estate agents and business owners in their 70’s who still have to work day in and day out just to pay the bills. The answer isn’t as easy as just becoming a real estate agent or getting a high paying job. It’s where you put the money you make at your job that really counts.

The plan has been to first increase my income so much that I am able to purchase enough properties that I would make $10,000 a month in passive income, which would then allow me to quit my job, and pursue my aspirations of becoming a musician, travelling, and enjoying life and doing whatever else.

BUT.. The problem was that I wasn’t making much progress. Even though over the last few years I’ve been making multiple 6 figures, I still was struggling acquiring properties. In the first 4 years of my FIRE journey, I ended up only having 2 houses. One house I lived in, and the other was my rental. But I had continued saving up all of the money I was making in my business for the right big deal. 

And this year, even though they say we are at the top of the market, there are no deals out there, tenants aren’t paying, and whatever else, I have been able to acquire 6 rental units putting me at a total of 7 units now just over these last 6 months. Even in a semi-expensive west coast market like I’m in there are deals. It just takes patience to find them, and the resources to make the deal happen when it comes up.

The Real Estate Is Life Case Study

To break down how this is going to affect my retirement we’ll break down my real estate portfolio rental numbers so far.

$7900 Gross Rental Income

-$4100 Mortgage, Taxes, and Insurance

That’s a total of $3,800 a month in passive income. 

-$395 for Maintenance

-$395 for Cap X

-$395 for Vacancy

-$632 for Property management if you decide to hire one instead of managing yourself

These honestly are over estimates for the haters out there, all of these homes will have had complete rehabs, and vacancy is almost non-existent right now because of our housing shortage, but these are the numbers for the worst case scenario, being ultra conservative.

That still leaves me with just under $2,000 in cash flow after all reserves and expenses, the majority of which has all happened in the last 6 months.

The money I’m going to be making on cash flow after all expenses is $23,796 a year. That’s only a few thousand less than what I was making working 40+ hours in a cubicle at my bank job, which means realistically I could retire within the next year or so if I wanted to scrape by and live super lean.

So how can you start to do the same? Acquire rental units, collect passive income, and do so all while you’re still in your 20’s?  Here are the action steps you can take so you can come along on the journey to real estate millionaire, and retire early with real estate.

Step 1 – Increase Your Income

The first thing we need to focus on is increasing your income.

When I first decided I was going to start investing in real estate to create passive income I did some quick math and realized it was going to be extremely difficult to do only making $30k a year. The first thing you have to do is to increase your income, and continue to grow your net worth. This is what’s going to give you the amount needed to make investments that will really move the needle forward. 

The best way to make good money is to start a business. You can also do side hustles and freelance work. If you already have gone through college and are making a good wage as an employee that works too. You just have to get that income up high enough that you can get approved for loans, and can come up with down payments on properties as you go. This should be your first priority in reaching retirement in your 20’s, you must find a way to first increase your income.

Step 2 – Decrease Your Expenses

The next step is to decrease your expenses. Every dollar you spend today could be worth 10x by retirement age if invested wisely. If retiring in your 20’s is important to you you’re going to have to make some sacrifices. If you get your income up high enough it won’t be hard to save 50-75% of your income. Last year I made $300,000 and was able to live off of $75,000 or so, meaning I had saved over 75% of my income. The more money you make the easier it will be to increase your savings rate.

The only time this doesn’t work is if you haven’t first increased your income. Even if you save 100% of a dollar, it is still a dollar. You can only cut costs so much, and that’s why we first focus on increasing your income. The trick is not to fall victim of lifestyle inflation, where your expenses increase along with increases in wages. 

I’m sure you’ve seen plenty of folks who get raises at work, make more and more money, but somehow still don’t have any savings. Maybe they’ve gotten that nice car, nice house, always have the latest clothes, and never manage to gain any ground. That’s lifestyle inflation. To retire in your 20’s you’ll have to keep your expenses low relative to your income.

Step 3 – Invest The Difference

Next you’re going to take that money you’ve been saving, and invest it, invest it wisely. You will have to treat it like there is a big test that you need to study for. Read books, listen to podcasts, watch YouTube, do whatever you have to do to have enough knowledge to be dangerous. And then jump, make the plunge, and get the ball rolling. There are a lot of different strategies. One that I like is to buy a home with a low percentage down owner occupied loan. Even if you don’t qualify for any government backed loans, you can still buy a house with as little as 5% down, over and over again. Buy a house that needs a little updating, live in it for a year, fix it up while you live there, rent the first house, and then buy another. Do this once a year throughout your 20’s and it might be enough to make you a millionaire with just this one tip. 

If you get your income up, and don’t let lifestyle inflation catch up with you by increasing your expenses with a fancy house and car, you’ll easily be able to save up enough for a downpayment on a house each year. 

Are there other ways to become a millionaire and retire early? Yes. You can increase your income, save money, invest it in the stock market, and do so until you have enough money that you can meet the 4% rule. Once your portfolio exceeds 25x the amount you need per year,  you can withdraw 4% of your portfolio a year, while still maintaining your portfolio. 

But regardless of the investment vehicle you choose, you’re still going to have to focus on these 3 main action steps: increase your income (most easily done through business), keep your expenses low (don’t get caught up keeping up with the Joneses), and invest your money wisely. 

I personally think real estate is the best way to do this. The easiest, most tangible, and realistic way to retire in your 20’s if you follow these 3 action steps. 

If you haven’t already, don’t forget to slap that like button around for me and subscribe to the channel to follow us on the journey to real estate millionaire. Hit me up in the comments or on Instagram if there’s anything I can do to support you guys, and I’ll see you next week!