The New Way to "Retire"

For many Americans, retirement is simply a number. This number represents the amount of money that they must save up in order to pay their expenses from age 65 to the time they "kick the can". Many Americans believe that only by reaching this number will they achieve retirement. Obviously, this number varies depending on the individual's lifestyle. I just looked at ING's website and their advertisements of people who have found their number. Mary found her number to be $1,006,635. This is a complete joke. No human being needs that much money to retire at any age, let alone age 65.

What if I told you that a single individual could retire at the age of 40 with only $200,000. The following is one way that this could be done.

Take your $200,000 and buy yourself 4 houses. One for yourself, and 3 to rent out. If you don't believe that you can purchase four houses/condos/apartments/townhomes for under $200,000, just check out the Arizona and Nevada real estate markets. After buying all four homes outright in cash. You will have enough money coming in each month from your rental homes to "retire." Don't believe me? Here is your new budget.

Monthly Budget (made for a single person)
Rental Income from 3 homes: $2400
Mortgage:                              $0     (You owe nothing on your houses)
HOA Fees:                            $400 (All 4 houses may have HOA fees)
Food/Necessities:                  $300
Cell Phone:                            $100
Health Insurance:                    $200
Car Payment:                          $0     (Pay off that car loan)
Gas:                                       $300  (Think Toyota Corolla)
Car Insurance:                        $100
Utilities:                                  $300
Internet/Cable:                        $100
Other                                      $300 (Includes fun money, clothing, Christmas, birthdays, unexpected items)
Profit                                      $300

*I left out income taxes. Income taxes would be minimal on this amount of income per year.

Obviously, this budget is made for a single individual and it only satisfies their most basic needs. "Retiring" at 40 with a family may require you to buy 1-2 more rental homes to make enough money to cover their basic needs.

This is the new way to "retire". Cover basic needs by saving up money to buy assets that will produce cash consistently. We no longer need to spend our entire lives saving up money just to reach a "number".