Why do we buy multi-family properties? If I were to frame the answer in very romantic terms, I’d say that the two reasons are Financial Freedom (which is a function of Passive Cash Flow) and Financial Wealth (which is a function of Net Worth).
In my view, the order of importance is: One – Financial Freedom, and Two – Financial Wealth. The reason behind my perspective is a medical diagnosis of Multiple Sclerosis (MS).
I won’t bore you with the details here suffice it to say that MS will likely significantly impair my capacity to move as time goes on. This reality creates a problem – I can’t very well go to a job if I can’t move…
Solution to the Problem
I am not at that place yet; I can still move. However, with this in the back of my mind at all times, everything I do in my professional life has a narrow focus on addressing the reality of needing to create a circumstance whereby the money comes in regardless of my capacity to perform work. Simply put, my life in real estate represents a solution to this problem; I buy assets which generate passive cash flow, and thereby alleviate the need for traditional employment / self-employment.
Therefore, by definition in my consciousness real estate represents a vehicle toward Financial Freedom; not by choice, but by necessity… Not financial freedom in a sleazy guru selling you on a dream kind of way, but something a lot more profound than that – do you understand?
Therefore, the romantic ideal of financial freedom translates into reality in terms of Passive Cash Flow which when large enough will cover the cost of living. Buy enough assets which throw-off cash …read more