Comments on: Step 2: Create a Passive Income Stream One couple's story of escaping 9 to 5 until 65 Wed, 20 Jul 2016 17:22:09 +0000 hourly 1 By: Bryan Sun, 13 Sep 2015 21:48:52 +0000 ARB, I think you have a good understanding of all the different roles needed for rental properties. Jason is in the “renter for life” camp, not considering real estate as an investment approach. His dividend approach and frugal living is serving him well.

It is interesting that you are in fact considering owning a multifamily property. At least you will have your tenants nearby when you figure out their financial situation! 🙂

We were able to make progress in our financial independence by extra side jobs, working overtime, creating side hustles, and a variety of other methods. The passive income from our real estate has been the one area we focused the most to build earnings. In addition to this, we maxed out retirement accounts with our employers as a plan “B” – just in case the real estate did not provide the results we expected.

I learned a long time ago that to become wealthy, especially early, we would need to do more than work in a job for an employer. ARB, I know you understand that too and will do fine by sticking with it!

Take care!

By: ARB Fri, 11 Sep 2015 21:55:54 +0000 My dad has suggested rental properties, but I’m sort of with Jason from Dividend Mantra in that they seem to be a bit of a pain for a passive income source. I’m not against the idea, but I really don’t want to deal with tenants and try to figure out their financial situation and motives while staying in compliance with a dizzying array of regulations designed to protect them at my expense. Dealing with people and playing the roles of friendly customer service rep, law enforcement agent, and psychologist, all while dealing with more regulations than should ever exist is what I’m trying to get AWAY from.

That said, if I ever owned my own home, I would try to purchase a 2-4 unit property and live in one of the units. “Monetize everything” is something I’ve been saying lately, and that includes your living situation.

I’m still making passive income and savings my mission. I invest in dividend-paying blue chips with some P2P lending on the side, and I invest a higher percentage into my 401k than necessary to get my employer match. I also am trying to build income with my blog, and I’m looking at a second job with a work-at-home company that I’ve discovered thankfully is not a scam. I’m also saving money by not buying fancy cars and gadgets (though I will be buying an Xbox One with the leftover change from the end of each day that I am building up) and by going on weeklong spending fasts at least once a month. I’m at the end of a three week spending fast right now, actually.

It’s very fortunate, Bryan, that you had some great roles models growing up. I couldn’t imagine starting a business at 18. I’d say I couldn’t imagine starting a business now, but me and a friend actually tried to start an investment seminar business last year. It didn’t work out. Hopefully this blog serves as a digital role model of sorts to those just starting out in their working lives. So many young people think that they can handle forty years at a job, not realizing that just because they aren’t sick of work NOW doesn’t mean that they won’t be sick of it in a few years. They’ll wish at that point that they had at least one passive income stream should they decide to make a change in their lives.

ARB–Angry Retail Banker

By: Bryan Fri, 28 Aug 2015 17:22:04 +0000 Jenna,

Welcome to the community and thanks for commenting! 🙂 It appears equities are your preferred passive income choice looking at your website.

I have followed a multi-legged approach to my passive income stool that includes “legs” for cash, bonds, stocks, and rental real estate. We will also have a couple small pensions and Social Security as a bonus.

Our plan is to retire early with the ability to live on only our real estate income. This gives us a couple back up “legs” to draw on if things do not go as well as planned. I do plan to write a complete series of my experience with rental real estate with some valuable lessons learned. That should start sometime in October or November.

Take care,

By: Jenna L Fri, 28 Aug 2015 09:24:09 +0000 Some great ideas here. It sounds like you had lots of good advice about money and investing from people in your life.
I’m currently educating myself about personal finance and in particular, methods to reduce debt so that I can build a plan for the next five years.

By: Bryan Fri, 21 Aug 2015 19:59:43 +0000 Mr. Enchumbao,

Stock and real estate appear to be a common approach for us in the FIRE camp. Those 3 years will go by much faster than you think. I have had a bunch of three-year plans that tend to morph into something different before all of our goals were achieved. 🙂 Who knows what wacky adventures are coming your way!

I noticed that your website mentions something that is a significant reason why I am blogging today: “That life is easier when we learn from others’ mistakes instead of our own”. I like those words of wisdom.

My hope is that through my articles I can share our experiences that were successful and failed, helping people with their own FI journey.


By: Mr. Enchumbao Fri, 21 Aug 2015 18:43:07 +0000 Hi Bryan,
Great post. Passive income is definitely the way to go to achieve financial independence. Our passive income streams mostly come from real estate and stocks investments. We’re now less than 3 years away from reaching financial independence and it’s nice to see the money working for you instead of us just working for the money.

By: Bryan Thu, 20 Aug 2015 18:42:06 +0000 Rich,
Our family has been involved with real estate for decades as well. I agree that it does make sense to diversify investments into other passive income opportunities…. so all those eggs are not in one basket, increasing your risk. 🙂

Regarding PM’s, when you have many properties you can negotiate rates in the 5% to 8% range at first. Slowly those rates can increase over time. I have not seen rates over 10% for residential property management in my history. The management cost covers marketing, showing to prospective tenants, creating leases, collecting security deposits, paying vendors, evictions (not legal fees), reporting, and managing all other aspects of tenant calls. The repairs are always in addition to the management cost, with the funds deducted from our rental income.

I hope that helps! Take care.

By: Redeemed Finance Thu, 20 Aug 2015 15:07:59 +0000 The family has pretty much been heavy real-estate for the past 25 years. My parents did it in reverse with buying a 3 family home and living in it while also renting the other 2 units. Then purchased another, and another. Only recently have they begun to look at the investing/stock market side of it (529 for the grand kids and IRA for their retirements) but are still at least 75-80% real estate portfolio wise.
Looking forward I can see the importance of a property manager but here it seems that all the PM’s want 10-15% and then repairs are additional. Do you see the same types of fees involved with PM’s in your area? or your out of state areas?

By: Bryan Tue, 11 Aug 2015 16:57:30 +0000 DP,

Thanks for the feedback on the real estate series. I will probably have the first post out in late September or early October. I will post an article every Thursday evening for multiple weeks.

I started in the business by doing nearly every aspect of managing the property myself. This included finding tenants, cleaning, repairing, painting, accounting, marketing, etc. For the heavy duty plumping and electrical work past my abilities, I would hire someone. It did this for about 15 years.

My career took off and required me to relocated around the country on multiple occasions. When that began I continued to manage the tenants, used vendors for repairs, and vendors to help me show properties. We continued to acquire more properties and it became too much for me to manage without a property manager. We also lived out of state from the properties.

We are using a team of people now the takes care of most aspects of the business. It requires about 8 to 10 hours a month of my time today.

I hope that was helpful.

By: DP Tue, 11 Aug 2015 02:09:25 +0000 Bryan,

I feel confident in my investing abilities in the stock market, but still lack in the real estate department. Therefore, I am looking forward to your series on real estate purchases. Do you tend to act as landlord in your rental properties or do you rent it out? That seems like the biggest drawback to me in purchasing rental property.