i'm 28 and realized that i have a long way togo.

[sripunp]

Hey it's Paul here,

A few week ago i posted something about myself wanting to retire, the more i read i realized that the term retire is very vague. the more i dig, the more i know, the result is; that i know nothing.

I'm 28 with 40k income / year
my wife earns 40k income / year as well.
rental income of $900/ month = 10800 / year.
unearned income (passive income) ~ 1500/ month = 20000/ year.

My expenses is ~about $3200 a month. $1800 is the mortgage.

we both live below our mean although not by much. here is the reason why.
I've spend most of our saving to drug, alcohol and gambling, etc. Just kidding. LOL.

In seriousness, I spend most of our saving to build my own business and hopefully someday an empire. i have about 70k investing in it. Its a restaurant business. that is how i earn those passive income.

My goal is to build an empire. if and when my money is making money for me around 5k a month ~60k / year. Then I can retire. Retire to me mean I can work or not work less than 10 hours a week. 9 month out of the year would be ideal. i dont wish to sit down and do nothing all day though.

[HadEnuff]

Is there a question in there somewhere?

[sripunp]

Quote:

Originally Posted by HadEnuff Is there a question in there somewhere?

wondering if i'm playing my cards right? i dont want to be 60 and having no retirement. i understand many people would suggest 401k and ROTH, but i rather get into property and rental income.

is vanguard a good investment tool? if not. what is the good investment tool i should be looking for. i'm not looking for a financial advisor here.

[dixonge]

Quote:

Originally Posted by sripunp In seriousness, I spend most of our saving to build my own business and hopefully someday an empire. i have about 70k investing in it. Its a restaurant business. that is how i earn those passive income. My goal is to build an empire. if and when my money is making money for me around 5k a month ~60k / year. Then I can retire. Retire to me mean I can work or not work less than 10 hours a week. 9 month out of the year would be ideal. i dont wish to sit down and do nothing all day though.

It sounds like you are setting yourself up to be a self-employed business owner. If you can get reliable people to run everything you can work a lot less, but you will probably still be tied down.

To 'retire' would look a lot more like selling this business and then investing the money in the market, living off of the safe withdrawals. Several people on this forum have done just that.

[Papa bear]

Hedge your bets on the 401(k) and IRA's. Tax advantaged accounts are fantastic for wealth building.

I'm 32 with passive rental income, a small startup business, and an IPS. We still contribute a good portion to the tax advantaged accounts, but don't max them out.

[highlow65]

self -employed business owner often means working very hard and I can tell you personally if you don't watch closely especially in a cash business like a restaurant your profits will walk, I could be considered retired if I let someone run my coffee shops but no one looks out for your interest like yourself. It isn't passive at all, a lot of work.

[ivinsfan]

You call the business "passive income" how much time a week does it involve?

As a farmer I can tell you that I think of the restaurant business as being even riskier then farming and that's saying something! If you plan is to add more restaurants until you hit the number IMO, that's even riskier. An "empire" usually has many ups and downs along the way.

[sripunp]

Quote:

Originally Posted by highlow65 self -employed business owner often means working very hard and I can tell you personally if you don't watch closely especially in a cash business like a restaurant your profits will walk, I could be considered retired if I let someone run my coffee shops but no one looks out for your interest like yourself. It isn't passive at all, a lot of work.

That comment is very true. we, business owner, work very hard. I used to work 12+ hours a day, 6 days a week. Now i'm down to 11 hours a day 5 days a week. I was able to take 2 vacations last year 1 for a week and other for a month without a hitch. I have complete trust in my employee, but i do check it everyday. when i went on vacation for a month i do check all the receipt when i came back which took me a whole day. i have a security camera setup throughout the restaurant a well.

Quote:

Originally Posted by ivinsfan You call the business "passive income" how much time a week does it involve? As a farmer I can tell you that I think of the restaurant business as being even riskier then farming and that's saying something! If you plan is to add more restaurants until you hit the number IMO, that's even riskier. An "empire" usually has many ups and downs along the way.

i called it a passive income. because i dont have to be there the whole time. As of now i can easily take 2 weeks off and still make money. yes it is risky, but what else is there. a 50k investment with 3-4 years ROI is pretty damn good.

[ivinsfan]

I'm not clear about what you are saying.. do you have a "regular" job in addition to your business? If you work at your business 50 hours a week that is not "passive income"

[WestLake]

I have rental properties but also max out my 401K and Roth. You need every tool, in my opinion.


Sent from my iPhone using Early Retirement Forum

[sripunp]

Quote:

Originally Posted by ivinsfan I'm not clear about what you are saying.. do you have a "regular" job in addition to your business? If you work at your business 50 hours a week that is not "passive income"

it is passive if i dont earn it, right? My business earn money for me even if i dont go into work. I have people who work there making me money.

Quote:

Originally Posted by WestLake I have rental properties but also max out my 401K and Roth. You need every tool, in my opinion. Sent from my iPhone using Early Retirement Forum

okay what tools r u using for 401k and Roth?

[Fedup]

It seems like you are going to hang out in this forum for a long time.


Sent from my iPad using Early Retirement Forum

[sripunp]

Quote:

Originally Posted by Fedup It seems like you are going to hang out in this forum for a long time. Sent from my iPad using Early Retirement Forum

lol. i would love to join life after retirement forum soon, but it is doubtful for another 10-20 years or so.

[pb4uski]

Have you tried out Quicken Lifetime Planner?

[Standard Staples]

Quote:

Originally Posted by sripunp it is passive if i dont earn it, right? My business earn money for me even if i dont go into work. I have people who work there making me money.

Just because you have others working for you, that doesn't automatically make it passive income. If I'm CEO of a company, I probably have an army of people working under me, bringing in money, whether I'm in the office or not. However, as CEO, I'm in the office 70+ hours a week, looking over numbers, answering to investors, strategizing business growth, etc. Other people are working to make me a ton of money, but it certainly isn't passive income.

If you bring in $20K from the restaurant, but you worked 55 hours per week at the restaurant, you absolutely EARNED that money. It may not be a typical $X/hour guaranteed salary gig, but it is far from passive. If you cut your workload down to a few hours a week and brought in the same money, it would definitely be passive income.

At this stage, your rental property is your passive income. Unless there are major problems with maintenance or tenants, a rental property should require less than an hour per week. I probably spend no more than a few hours a year on mine.

[REWahoo]

Quote:

Originally Posted by Standard Staples Just because you have others working for you, that doesn't automatically make it passive income.

So true. Fact is, having people work for you and having to deal with them (recruiting, hiring, training, monitoring, and on and on...) is one of the least passive ways on earth to make a living.

[FreeBear]

Quote:

Originally Posted by REWahoo So true. Fact is, having people work for you and having to deal with them (recruiting, hiring, training, monitoring, and on and on...) is one of the least passive ways on earth to make a living.

+1

Yep, if being the boss was easily, I would have stayed at w*rk in mini-Mega and taken a management j*b. Not...

At least at mini-Mega, I wasn't risking my personal savings and capital, just a paycheck...

I greatly admire small business owners and RE investors, but I never had the courage or the desire to deal with customers/renters. "A man's got to know his limitations..."

[Options]

Quote:

Originally Posted by sripunp Hey it's Paul here, A few week ago i posted something about myself wanting to retire, the more i read i realized that the term retire is very vague. the more i dig, the more i know, the result is; that i know nothing. I'm 28 with 40k income / year my wife earns 40k income / year as well. rental income of $900/ month = 10800 / year. unearned income (passive income) ~ 1500/ month = 20000/ year. My expenses is ~about $3200 a month. $1800 is the mortgage. we both live below our mean although not by much. here is the reason why. I've spend most of our saving to drug, alcohol and gambling, etc. Just kidding. LOL. In seriousness, I spend most of our saving to build my own business and hopefully someday an empire. i have about 70k investing in it. Its a restaurant business. that is how i earn those passive income. My goal is to build an empire. if and when my money is making money for me around 5k a month ~60k / year. Then I can retire. Retire to me mean I can work or not work less than 10 hours a week. 9 month out of the year would be ideal. i don't wish to sit down and do nothing all day though.

Paul, IMO, at 28, your are doing very well. I recommend, however, not putting "the cart before the horse" in worrying about retirement at this point. That will take care of itself over time as a result of your hard work over the years. Yes, I would take the time to learn about investing, but I recommend for now putting your attention on maintaining and growing the business you have, and continuing to grow and manage your real estate assets, as you have expressed an interest in this (what we are interested in will be the easiest for us, we'll be the most persistent at, and have a better, more natural aptitude for).

I have a good friend who built his own successful commercial cleaning business from scratch in Los Angeles while also acquiring real estate properties in the Pacific Southwest. This is someone completely self-taught, without a college education, and who has worked very hard and done very well (and the nicest guy too!). He does everything a small business owner does: hires/manages employees, markets and sells the business services, and oversees all income/expenses. He has learned about real estate investing and built a lucrative real estate portfolio. He also has a sizable investment portfolio which is invested with Vanguard, and is now looking to retire in about ten years. He's about twice your age, but as you can see, all of what you are seeking is in fact possible, if you continue to put in the effort you are putting in now.

Regarding learning about investing, here's an excellent start:

https://www.etf.com/docs/IfYouCan.pdf

[sripunp]

just want to give this an update. i'm currently investing in roth ira. so far, it's been doing really well, too well in my opinion. i'm at almost 100% return this year. i've started investing a few months, shortly after i stumble upon this site and all of you (all above comments) believe i should invest in retirement. so i did. my business is doing well, cant complain really.

[COcheesehead]

An English teacher softly weeps.