A lot of us have had this moment in our lives: we become parents and we want less time working and more time with family, but the income is just not there to support it.
Today, we talk with someone who has developed enough passive income to spend less time on work and more time raising his son. Sam Dogen is the writer behind Financial Samurai, a blog and podcast dedicated to slicing through money’s mysteries.
He is a regular contributor to CNBC and he’s been featured in major publications like MarketWatch, Business Insider, and Forbes. When he’s not writing or talking about money, he likes coaching and playing tennis and enjoying delicious food in San Francisco with his wife and young son.
We dive deep into why he got into passive income, the methods he used to get started and his life as a stay at home Dad.
Our first question of the month comes in from Christie from Cincinnati:
I love the podcast. I have two questions.
How long have you been on Dave Ramsey’s Baby Step 7?
We are on Baby Step 7 with 1 paid-for rental. We are considering selling the rental property and just investing in a mutual fund instead.
I know you keep talking about buying a rental, but after 8-10 years we are finding it really isn’t making as much money as we think the stock market could. And we won’t have to worry about tenants calling with a problem.
For our Fintech Spotlight segment this month, we are featuring our sponsor Roofstock. A company that makes investing in single-family rental properties radically simple.
I’ve invited the Director of Retail at Roofstock, Zach Evanish to tell us a little bit more about this online real estate marketplace and how it’s helping new and seasoned investors build wealth. We’re also going to discuss long-distance real estate investing and why it’s not as scary as it sounds.
Lately, I’ve been sharing our family’s interest in buying our first rental property. I’ve written articles, done at least a dozen podcast interviews on the subject and I’ve even looked at some houses with my wife Nicole.
I’ve learned 1% rule, the 50% rule and how to analyze a deal. It’s been fun!
During this whole time, I’ve been asking for people’s feedback, experience, and advice because I’m a complete newbie with real estate investing.
One person who reached out to me recently was my friend Deniz. He shared his difficulty with real estate investing over the past 13 years. He’s had tenant issues, rent competition and overall, it’s been difficult as he’s moved out of DC and into the suburbs as a new father.
Our conversation made me want to get more perspectives, pros and cons of real estate investing. We’re considering making a $100,000+ investment. I want to make sure our family is making a smart move.
With that said, here are 13 additional pros and cons from former and current real estate investors:
As Nicole and I save up for our first rental property, I’m trying to look at all angles before we proceed. We’ve talked about taking out a mortgage again. We’ve talked about saving up to buy all in cash. One method that’s super intriguing for us is the BRRRR Method of real estate investing. We’re going to discuss what that is and how it works today.
Billionaire Warren Buffett once said, “Never depend on a single income. Make investment to create a second source.”
All of the entrepreneurs I’ve interviewed on my podcast (or really any other podcast for that matter) have taken Mr. Buffett’s words to heart. If you’re going to create some serious wealth for you and your family, diversifying your income streams is the key to success.
Saving and long-term investing are crucial pieces to the wealth building puzzle as well. That being said, the puzzle for financial independence can be put together a whole lot faster when you increase your income.
Real estate investing has been something I’ve been interested in for a long time. The ability to own a home that provides a monthly passive income and grows in value at a consistent rate over time sounds quite appealing to me.
I don’t get as excited about flipping properties because it sounds like that’s a very detailed and focused skill. The margins are so tight that you need to be a master at your craft to succeed. Evidently, those well-produced HGTV home flippin’ shows make it look easier than it actually is.
The home mortgage is quite often the largest expense in your typical annual budget. Since your mortgage eats up such a huge chunk of your monthly income, completely ridding yourself of it could be quite freeing.
My wife Nicole and I completely agree with this sentiment of mortgage freedom. We’re just not interested in having a mortgage anymore. So, we’re getting rid of it.