132: Financial & Time Freedom Through Multifamily Apartments
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“Invest in inflation. It is the only thing going up” – Will Rogers.
It’s important to have multiple streams of income because if you don’t, you could end up working until you’re unable to anymore 😩😩.
It’s sad that we’ve come to expect retirement as a guaranteed stage of life, considering it’s actually a fairly recent concept.
People used to work until they physically couldn’t anymore, or until they passed away. It’s definitely something to keep in mind as we navigate our own financial futures.
Did you know that the Social Security Act was initially created to help ease the suffering of millions of Americans during a time of crisis? It definitely did a lot of good for a lot of people. But you might not know that, it was never meant to replace retirement savings entirely. It was only supposed to be a supplement to help cover the most basic needs.
It’s crazy 🤯🤯 to think about how much the average retirement age has changed over the years too. 50 years ago, people typically only retired around 12 years before they passed away.
Nowadays, if someone retires at age 65, they’re actually expected to live until at least 85 or even longer.
That really puts things into perspective, doesn’t it?
The sad truth 😢😢 is that it’s not really realistic to finance a 30-year retirement with just 30 years of work. It’s kind of a sobering thought, but it’s true.
Simply putting 10% of your income aside and hoping that it will be enough to finance a retirement that’s just as long as the years you’ve worked is probably just not going to cut it.
With this in mind, it’s important to start thinking about retirement planning early on and to think about ways to maximize your savings and investments so that you can build up a solid nest egg over time.
That might mean investing in a mix of stocks, bonds, and other assets, or it might mean looking into other ways to supplement your retirement income, like real estate or a side business. There’s no one-size-fits-all solution, but the important thing is to start thinking about it now so that you can be better prepared for the future. ❤️😇
Not surprisingly, one of the top fears among baby boomers is outliving their savings. It’s a pretty concerning issue, especially since 75% of Americans can expect to see their assets disappear before they pass away.
And even if Social Security manages to survive into the next generation, it won’t be enough to provide a decent standard of living on its own.
In fact, the current average benefits are only $1,294 per month. Can you imagine how difficult it would be to make that stretch in cities like New York, Los Angeles, Chicago, or Miami?
It’s interesting how sometimes it takes a major event to make a person realize they’ve been doing things wrong. In our case, we didn’t learn how to grow our income until a catastrophic event occurred in our world, and we lost everything.
Probably pretty similar to you, we used to think that sacrificing our time was the only way to achieve financial and time freedom.
We believed that time was equal to money, but it turns out that’s not the case at all.
It’s amazing how our perspectives can shift when we’re forced to re-evaluate our beliefs, isn’t it?
For us, it happened one evening while we were making dinner. We saw some news that our client (we were in the fashion manufacturing industry at the time) was shutting down all their stores! 😢😢
Can you imagine that terrible sinking feeling in the pit of our stomachs?
It was definitely a shock, and we had to act quickly because we relied solely on that one source of income. Without any demand, our business became obsolete overnight. It was a tough realization, but it made us realize something important that many people don’t realize – we actually had choices. And so do you.
We could have chosen to stay in the same lane, finding new clients and grinding away with never-ending stress, obligation, exhaustion, and expectation. But we knew that would ultimately lead to massive amounts of misery and underperformance. So we decided to take a different path. It was tough, but we didn’t give up.
Then one day, everything changed for us. 💫
We attended this real estate event back in March 2017 and were introduced to Robert Kiyosaki’s book, Rich Dad, Poor Dad. Boy, was that a game-changer for us.
Reading that book was like an awakening.
The number one principle we got from it was that the difference between rich people, poor people, and middle-class people is not how much money they make. It was such a profound realization for us and completely shifted our perspective on wealth and financial freedom.
Another takeaway for us was the realization that anyone, even someone working at McDonald’s, could become wealthy. It’s not about how much money you make, but how you manage and grow it.
That book really highlighted the differences between poor people, middle-class people, and rich people.
For example, poor people tend to believe that the primary purpose of money is to pay bills.
But if you think about it, how can you ever escape poverty if you view money in such a limited way? It’s just not possible.
We had to shift our mindset and start thinking like wealthy people.
It’s all about how you use your money to create more opportunities and generate more wealth, rather than simply using it to pay bills and survive. 💡
It’s easy to fall into the trap of thinking that as long as you have enough money to pay your bills and get by, you’re doing okay. But the truth is, that kind of thinking is what keeps people stuck in poverty.
The exciting thing is that it’s not about the amount of money you make or even the job you have. You could be making a lot of money at your job, but if you’re not using it wisely to create more wealth and opportunities for yourself, then you’ll still struggle financially.
As Jim Rohn once said, “Do they pay other people at your company more than they pay you?” If the answer is yes, then that means they’re capable of paying more. It’s just that they’ve chosen to pay you a certain amount. And that’s why we have to expand our awareness and start thinking like wealthy people. 🤓🤓
The primary purpose of money shouldn’t be just to pay bills – for lack of a better title, this is what we call a poor mentality.
It should be used to create more opportunities and financial freedom for ourselves. And that’s the mindset shift that can make all the difference.
Then there’s middle-class people, who often fall into the trap of thinking that the primary purpose of money is to maintain good credit. They focus so much on credit that they end up living beyond their means and creating a lifestyle that makes them look like they’re doing better than they really are.
They might make a little more money than it takes for them to survive, but instead of using that extra money to invest or create more wealth, they use it to buy things they can’t really afford.
They buy things on credit, thinking that they can just make the minimum payments and maintain their good credit score. 😵🥴
But the reality is that they’re just racking up more debt and digging themselves deeper into financial trouble. Please keep in mind that this is obviously a generalization, not an all-encompassing description of the middle class as a whole.
But the worst part 💔 is that this lifestyle can be very deceptive.
From the outside, it might look like they’re doing great, but in reality, they’re just barely keeping their heads above water. This is why it’s so important to shift our mindset and start thinking about money in terms of creating wealth and financial freedom, rather than just maintaining good credit or keeping up appearances.
So for rich people, it’s not just about making enough money to survive or to maintain a certain lifestyle, it’s about taking the 💰 money they have and using it to make even more money. 🤟❤️
It’s like a never-ending cycle of investing and growing their wealth.
This is a big difference from the mindset of poor and middle-class people who may just focus on paying their bills or maintaining their credit score. It’s really about expanding your mindset and thinking beyond just the present moment.
And all these are definitely something to think about and consider if you want to become wealthy and financially successful.
Not only that but if you don’t make money fast enough, inflation and taxation can really take a toll on your earnings. It’s like trying to fill up a bucket with a hole in it – the more water you pour in, the more it leaks out. ☹️
Inflation means that the value of your money decreases over time, and it’s happening faster than ever before.
👉 Here’s a frustrating example using some basic math: if there’s $100 💵 in the world and 100 people, each person gets $1. As soon as the government prints another $100, that $100 is now only worth 50 cents.
That sure sucks, no matter how you look at it.
On top of that, in the last few years, inflation has been greater than it’s ever been in human history.
We googled it, and at this moment in time, inflation is currently at 6.4%‼️
That means that every 10 years, our money is worth 64% less than it was a decade ago, which is a pretty significant decrease in value.
And then there’s taxation, which is the government taking a portion of your income as a way to generate revenue.
It can be really frustrating to work hard and earn money, only to see a chunk of it taken away in taxes.
Unfortunately 😞😞, if you’re not making money fast enough, inflation and taxation can quickly erode your dollars and leave you struggling to make ends meet.
That’s why it’s so important to focus on creating income streams that can keep up with or even outpace inflation and minimize your tax liability.
So once we got The Awakening, we asked ourselves: what’s next?
Enter: 🏢 Multifamily Apartment Investing
Stable Cash Flow
Multifamily apartments can be a really great option for generating stable cash flow.
The reason for this is that there are multiple units, which means that even if one tenant moves out, you still have other tenants paying rent to keep the 💰 cash flow going.
Plus, the rent payments are usually on a long-term lease, which makes it a really predictable and steady source of income for the investor. So, it’s definitely something to think about if you’re looking to invest in real estate.
Appreciation Potential
Investing in multifamily apartments can not only provide a steady stream of income, but they also appreciate in value over time.
Appreciation can happen due to various factors, like the location of the property, market demand, or upgrades made to the property. As an entrepreneur, you can use your business network and expertise to identify properties that have a high potential for appreciation.
Another great thing about multifamily properties is that they can appreciate with inflation ✨, which is a big advantage for investors. As the cost of living increases, so does the value of the property, allowing you to maintain or even increase your net worth. It’s a win-win situation! 🥳🥳
Economies of Scale
A unique advantage of multifamily apartments investing is the ability to benefit from economies of scale ⚖️.
Since multifamily properties have multiple units, the costs of maintenance, repairs, and management can be spread out across those units. This can lead to lower expenses and higher profitability for the investor.
Let’s not forget that multifamily apartments may be easier to manage than single-family properties, as there is one location and one set of tenants to deal with. This can make things a lot more straightforward for the investor, especially if they don’t have a lot of experience managing rental properties.
Tax Benefits
Investing in multifamily apartments can also provide some great tax benefits for entrepreneurs.
For example, the IRS allows investors to depreciate the value of the property over time, which can reduce taxable income and lower your overall tax bill.
Additionally, expenses like repairs, property taxes, and mortgage interest can be deducted from your taxable income, further reducing your tax burden.
These tax benefits can be a significant advantage for investors looking to maximize their profits and minimize their expenses.
Diversification
Diversification is also a key principle in investing.
By spreading your investments across different asset classes, you can help reduce the risk of losses in any one particular investment. This is because the performance of one asset class may not necessarily be correlated with the performance of another.
By adding multifamily apartments to your portfolio, you can diversify away from stocks and bonds, and potentially achieve greater returns in the long run.
Additionally, real estate investments can provide a hedge against inflation, which can be a significant advantage in uncertain economic times.
Inflation Hedge
Don’t forget also that multifamily apartments can provide a great hedge against inflation for investors.
When inflation increases 📊, the value of real estate properties tends to go up as well. So, owning multifamily properties can help investors protect their purchasing power and maintain the value of their investment over time.
This can be especially advantageous for entrepreneurs who are looking for long-term investment opportunities that can weather economic fluctuations. By investing in multifamily apartments, entrepreneurs can potentially benefit from both steady rental income and property appreciation, while also hedging against inflation.
Shifting Demographics
Demographics 🗺️ play a significant role in real estate investment, and the current shift toward a rental lifestyle is a trend that can’t be ignored.
With more and more people opting to rent rather than buy, multifamily apartments are becoming an increasingly attractive investment option for entrepreneurs.
This demographic shift towards renting has created a growing demand for rental properties, which means that investing in multifamily apartments can provide a stable and consistent income stream for investors.
As an entrepreneur, it’s essential to stay ahead of these trends and capitalize on them to make smart investment decisions.
The Big Picture
So, to sum it up, multifamily apartments can be a smart investment choice for high-level entrepreneurs for several reasons.
Firstly, they offer stable cash flow from rental income generated from multiple units, with the potential for long-term leases providing a predictable income source.
Additionally, multifamily properties have the potential to appreciate in value over time, providing a boost to the investor’s net worth. 🤩🤩
Investing in multifamily apartments can also offer tax benefits such as depreciation and expense deductions, and provide diversification to an entrepreneur’s investment portfolio.
The increasing trend towards renting rather than owning a home in the US makes multifamily properties a more attractive option for investors seeking a stable and growing income stream.
Of course, before investing in any real estate, it’s essential to conduct thorough research and due diligence.
For entrepreneurs looking to build long-term wealth, 🏢 multifamily apartments can be a wise investment choice.
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