Posted by Frank Chin on September 23, 2003 at 16:33:16:
I know of dentists, lawyers, doctors, and other high income professionals who do REI as a retirement plan. My brother in law, the doctor, is one of them.
Both he and his wife who is a banker, and in their 40’s, have careers that they are happy and comfortable with. They are not exactly suffering in poverty, want to chuck their jobs yesterday, or need profits from quick deals in Real Estate to get them out of a financial rut.
For these folks, financial independence means another thing altogether. Many of them are self employed, but a stroke, bad accident, could put them into “financial hell” in quick order.
So REI means for my brother in law and wife, both in his mid forties, the ability to sell one of his properties, pay off the mortgage on the others, and be financially independent. He leveraged up from a free and clear multi family so as to not pay taxes on cash flow a few years back.
Many of us ASSUME that REI is a “be all and end all”. No such assumption is made of day traders or others playing the stock market on the side.
Recently, my brother in law mentioned that he’s in a position to “stop the world” for a few years, go travel. With rentals, and a management agent, I can see him doing it.
But creative RE is too close to being a job where he can’t easily step away. The money stops flowing after a while, particulary if one steps away for a few years.
In a way, while in his 40’s, his situation is similar to my dad in a nursing home. He’s stepping away for a while, whereas my dad stepped away permanently. But the rent checks will keep on flowing for both.