Are you wondering how to achieve financial freedom? Maybe you want to be a stay-at-home parent and be there for all the important moments in your children’s lives. Or you want to maintain your family’s lifestyle without working 60+ hours or more a week. Whatever the reason, many have this dream
The big question we need to answer is how do we make financial freedom a reality? Real estate—specifically rental properties—is one of the very best ways to build passive wealth for you an your family.
Why Spending Quality Time with Family is So Important
Parents know that being present for their children, not just spending time but quality time with them, is just as important as being able to provide financially for their needs and wants. Yet most households today have two working parents, which makes it increasingly difficult for many parents to find the time to be there physically, and when they can be, it’s hard to find the energy to be truly present. Much of this has to do with the rising cost of living, which makes dual income a necessity for many families.
Whether you work full-time or not, it’s extremely important to emphasize spending quality time with your children. Here are some of the benefits.
4 Benefits of Spending Quality Time with Your Child
- Children who interact positively with their parents are more likely to grow and develop into competent adults and become good parents. In fact, countless studies have found that even simple interactions, such as reading together, eating together, or simply having a one-on-one conversation, provide positive outcomes for children.
- Children who spend time with their parents are less likely to abuse drugs and alcohol or take part in other risky or illegal activities. For example, research conducted by the National Center on Addiction and Substance Abuse via Arizona State University shows that teens who have infrequent dinners with their families are “twice as likely to use tobacco, nearly twice as likely to use alcohol, and one and a half times more likely to use marijuana.”
- Children who spend quality time with their parents have higher self-esteem. Parents can help children build self-esteem by interacting with them in simple, positive activities. Walk around the block with your daughter, throw a baseball with your son, read your favorite book or watch your favorite movie as a family. Just take time to be together and enjoy one another’s company. By engaging in these activities, your children will feel valued and loved, which will help them have a more positive view of themselves.
- Families that emphasize spending time together form stronger emotional ties that help children adapt better to stressful situations. One long-term effect of spending quality time together as a family is that children with happy family memories are more likely to create the same type of loving environment with happy memories for their own children.
While it’s possible to provide the same benefits to your children while working full-time, it can be more challenging. This is why so many working parents feel guilty about how much time they spend (or don’t) with their kids. As mentioned briefly above, many families don’t have any choice. They can’t be there more because they have to work, and there are only so many hours in a day. The only solution for families in this situation is to focus on spending more quality time with their children.
But what if you didn’t need two “traditional” incomes to feel financially secure? What if you could generate enough passive income every month to replace your income and be there for your children?
Working Parents and the Dream of Financial Independence
According to a Pew Research Study, 46% of households in the United States have two parents who work full-time. On the other hand, only 26% of households fit the traditional parental work model, in which the father works full time and the mother stays at home.
The study also found that, while households with two full-time working parents are more financially secure than those with only one parent working full-time, these families also suffer from “trickier family dynamics.” About 56% of working parents say it’s difficult to balance family and work, 47% believe they don’t spend enough time with their kids, and 84% say they feel rushed at least some of the time.
How Do You Balance Work and Family Life?
The truth is that it is not easy to balance work and family. If you’re a working parent, especially if you’re part of a household with two working parents, you may:
- Have a higher standard of living and feel more financially secure.
- Have a better self-esteem because you feel like you are contributing to your family’s health and wellbeing.
- Have a large circle of friends and a social life outside the home
However, you may also feel:
- Overwhelmed with too much work and not enough time.
- Like you are missing out on family life/ seeing your children grow up.
- That you’re not there for your kids or your partner.
- Resentful of how much you have to do around the house on your days off.
- Too tired or busy to enjoy spending time with your family and friends.
Again, what if you could still enjoy all of these benefits of working without the negatives? What if you could invest in something that would generate enough cash flow so that you could quit your job and spend more time with your family? What if you could become financially free?
What is Financial Freedom Exactly?
Generally speaking, financial freedom means having enough wealth or passive income to live life on your own terms. That said, becoming financially free will mean something different to everyone.
What does it mean for you? If you have anything in common with RealWealth members, maybe it looks something like this:
- Quit your job to spend more time with your young children and growing family.
- You can work less and still give back to the community and be there for your children and spouse.
- Take back control of your financial future, generate cash flow to retire wealthy, and pay for your kids’ college tuition.
- Get out of the rat race and build a strategy to create generational wealth for your family.
- Create a stable income stream that will allow you to pursue entrepreneurial endeavors without subjecting your family to financial hardship.
- Own enough cash-flowing real estate to support your family and travel anywhere you want to go whenever you want.
- Become 100% debt-free and have a monthly cash flow of at least $10,000.
- Spend more time with family and friends, travel the world, and have some free time to volunteer in organizations that make the world a better place.
- Ensure you have a solid income stream to ride out any recessions in the next 3-5 years.
Perhaps you have a different reason for wanting to become financially free and that’s okay. Whatever your motivation is, know this: achieving financial independence is possible.
How To Achieve Financial Freedom for Your Family? Invest in Cash Flow Real Estate
The key to achieving financial freedom for your family is to invest in income-producing assets, like rental properties, that’ll generate positive cash flow every month. This is the best way to create real wealth, as we like to call it, because it can help you create both the money and the freedom to live life on your own terms.
Real estate investments are incredibly appealing for parents because property is a more secure investment than the stock market. Why? Because property is tangible. People always have and always will need a place to live. This means it is very unlikely that buying and renting homes will ever disappear.
There are also a lot of other benefits to purchasing real estate. Here are a few of the big ones:
6 Reasons Real Estate is the Best Way To Achieve Financial Freedom
1. Inflation
Inflation causes the price of goods and services to rise over time. This includes food, rent, wages, real estate prices, stocks, etc. The only things that do not increase in value as a result of inflation are cash and bonds. In other words, cash actually holds less value over time, making it a poor choice for long-term savings. The one asset that is almost always guaranteed to increase in value with inflation is — you guessed it — real estate.
The cost of real estate fluctuates in response to inflation because (as mentioned above) people always need a place to live. As a result, real estate prices must stay aligned with average wages, taxes, and expenses so that residents can actually afford to buy homes. This is a good thing for investors, because as long as you invest in the right markets, at the right time, your real estate investment should increase in value along with inflation, at a rate of about 2% per year.
2. Immediate Profits & Cash Flow
It is possible to make a profit from your real estate investment within the first six months if you know how to “force” appreciation. This is the process of buying a home and making improvements that increase the property value. The profit is considered forced appreciation because it took effort, not just timing of market cycles or inflation. (Note: not all improvements increase value.)
Buy-and-hold real estate is often considered an even better investment because it allows the investor to generate passive income month after month for the life of the asset. And the tax deductions are much more favorable (more on that later).
Here’s an example:
If you purchase a $100,000 rental home in a strong market at the right time, you could make as much as $1000 per month in gross rent. After paying property taxes, insurance, and management fees, you should net about $700 per month. This is money you can put directly into your pocket as immediate profit.
Let’s say you also increased the property’s value by fixing it up. You would have access to that equity without paying capital gains tax. Instead of selling, you could access the profits by doing a cash-out refinance. Depending on the terms, you might be able to get all your cash back out of the property and still have all your expenses covered by the rental income. Any returns you get from the property once you have your capital back is just free money. The return then becomes infinite.
3. Refinancing
Once you sell a house, it’s over. You will never make any more money off of it. However, a property you hold onto will continue to make you money every year, and at the same time, the property’s value will be appreciated. The best part, as mentioned above, is that you don’t even need to sell the home to free up money for another investment. This is where the saying “Refi til you die” comes from!
4. Fixed Mortgages
Many people think they can’t buy real estate until they’re rich. This is false. It is easier to pay cash, but your returns are much higher if you borrow money.
A fixed-rate loan is simply a loan with a fixed rate for the life of the loan. This means that the amount of your loan payment will never change. In other words, if your current loan payment is $500 per month, it will still be $500 per month 10 years from now.
In the U.S. we’ve become so accustomed to this type of loan (ie: the 30-year fixed rate mortgage), that we take it for granted. And we shouldn’t. Why? Think about it. If you were lending money, would you lend it to someone for 30 years for the same monthly payment KNOWING inflation will eat up it’s value?
5. Loan Leverage
Leverage is one of the most significant advantages used by real estate investors. Investopedia defines leverage as “the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.” Understanding this concept is important because it can help you achieve a much higher return on your property.
6. Tax Breaks
Did you know that owning a rental property can give you tax advantages? That’s right. You can deduct almost all expenses incurred as part of your cost of doing business, and you can also deduct things like depreciation, property taxes, repairs, maintenance, and more. All this can add up to a lot of free money at the end of the year.
The Takeaway
There are only 940 weekends between the year your child is born and the year they leave for college. This may seem like a lot of weekends, but it’s really not. To put it in perspective, if your child is five years old, you’ve already used 260 weekends. How many have you already used up? A better question for working parents: how many have you made the most of?
When you work full-time, it’s difficult enough to make it home for dinner every night. It’s sometimes even more challenging to be truly present when you do. Sure, you may sit at the table with your family, but are you really listening? Be honest. After hours of commuting, stressful meetings, and not nearly enough sleep, are you really there? Or are you just going through the motions? Are you actively listening, or is your mind wandering to tomorrow’s staff meeting?
Balancing work and family is possible, but it isn’t always easy. If you’re committed, you and your spouse can work full-time and raise healthy and happy children. The question you have to answer is whether you want to keep making a lot of money from a job or if you’d rather start investing in rental properties that generate cash flow every month so you can provide for your family financially and also work less (or maybe not at all)!
