Hello all,
Just joined your group after spending a dozen hours over the past few days reading and it seems most people advocate a "boggleheads" type investment strategy. I suppose I'm one of those types too, with everything paper assets in or approximating a Vanguard "Lifestrategy" 60/40 fund. However, my wife and I are primarily focusing on a few decent paid-off rental properties to cover our basic cost of living first. We can reasonably expect a 8% income return for a cash investment ("CAP rate" in the biz) and this assumes roughly 50% expenses, professional management, etc (I'm also a biggerpockets type).
Here's the question: why focus on a 4% or even 3% withdraw rate from paper assets when 8% can happen with rental real estate? Is it just the hassle (and it can be even with management!)? Is rental RE viewed as riskier for liability reasons? If I suddenly had 2 million, I'd buy a lifestrategy fund and be done. I view real estate as a quicker path to FI.
As a side note, I've already survived NINE layoffs in 7 years. I suspect this is a big part of my financial independence obsession. Anyone else share that? Did modern corporate America create this?
I'm looking for some honest feedback, please, particularly regarding the risk / reward trade-off between rental properties and paper assets for ER types.
Thanks for the forum! Nobody else I know plans to retire early and what few people I've told that I save 75% of net income seem to think I'm too extreme, but I have no desire to spend more at the moment. Friends / coworkers live in debt no matter how much they make it seems so I try not to share my philosophy there. Good to see some like-minded folk.
Thank you,
Chris
Just joined your group after spending a dozen hours over the past few days reading and it seems most people advocate a "boggleheads" type investment strategy. I suppose I'm one of those types too, with everything paper assets in or approximating a Vanguard "Lifestrategy" 60/40 fund. However, my wife and I are primarily focusing on a few decent paid-off rental properties to cover our basic cost of living first. We can reasonably expect a 8% income return for a cash investment ("CAP rate" in the biz) and this assumes roughly 50% expenses, professional management, etc (I'm also a biggerpockets type).
Here's the question: why focus on a 4% or even 3% withdraw rate from paper assets when 8% can happen with rental real estate? Is it just the hassle (and it can be even with management!)? Is rental RE viewed as riskier for liability reasons? If I suddenly had 2 million, I'd buy a lifestrategy fund and be done. I view real estate as a quicker path to FI.
As a side note, I've already survived NINE layoffs in 7 years. I suspect this is a big part of my financial independence obsession. Anyone else share that? Did modern corporate America create this?
I'm looking for some honest feedback, please, particularly regarding the risk / reward trade-off between rental properties and paper assets for ER types.
Thanks for the forum! Nobody else I know plans to retire early and what few people I've told that I save 75% of net income seem to think I'm too extreme, but I have no desire to spend more at the moment. Friends / coworkers live in debt no matter how much they make it seems so I try not to share my philosophy there. Good to see some like-minded folk.
Thank you,
Chris
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