• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Wealth Pilgrim

No Money Worries. No Matter What.

Neal Frankle featured in
  • Home
  • Life Insurance
  • Investing
    • Build Strong Investment Building Blocks To Avoid Going Broke In Retirement
    • Systematic Mutual Fund and ETF Investing
    • Stock Market Investing Guide
    • Choosing the Right Investment Brokerage Guide
    • How Bonds Work Guide
    • How Banks Really Work Guide
    • Annuities – What You Need To Know Before You Invest
    • A Beginners Guide To Buying Individual Stocks
    • Create A Pool Of Great Mutual Funds and ETFs To Pick From To Secure Your Retirement
    • ETF and Index Fund Investment Guide
  • Earn More
  • Banking
  • Retirement Planning
    • Retirement Guide
  • Reviews
    • Upgrade Personal Loans Review
    • Lending Club Review
    • Prosper Review
    • Ally Invest TradeKing Review
    • CIT Bank Review
    • LegalZoom Review
    • Lexington Law Review
    • Airbnb Host Review
    • Should You Drive For Uber?
  • Tax
  • Courses
    • Raise Your Credit Score So You Can Buy a House – Free Video Course

How My Financial Road Map Helped Me Become Independent in 6 Years

by Ben Cope, The article represents the author's opinion. This post may contain affiliate links. Please read our disclosure for more info.

The following is a guest post written by Brandon Turner with BiggerPockets.com. Brandon is a bright young man who used his financial road map to become self-employed and independent in 6 short years. His story is fascinating, motivating and a guide for us all to use proper planning in order to achieve our dreams.

Do you like road trips?

I love them. The open road, the relaxation, the time to just sit and think.

At least several times a year I take a road trip somewhere, despite the fact that,with the price of gas, traveling by car is often more expensive (and time consuming) than just taking a flight. One of my favorite drives is down the Oregon coast and if you haven’t had the pleasure of such a trip I highly recommend you take one (the Tillamook cheese factory is fascinating!)

As every avid road tripper knows – you need to be prepared. There are several essentials that every road trip vehicle needs to pack:

  • a spare tire
  • an emergency kit
  • cheese in a can
  • a road map

It’s this last one I want to talk more about today. A road map. How do you know where to go if you don’t have a road map? This is the same question I want to ask you today about your financial future.

How do you know where you want to go if you don’t have a financial plan?

Road Maps are created to show the easiest route

Let me ask you a question:

If you were to get in the car right now and drive from New York to San Diego without a map – would you make it?

Probably.

San Diego is obviously south west of New York, so if you simply headed in a south-west direction at every turn you would eventually make it.

However, would you make it without wasted time, wasted gas, and a lot of headache?

Probably not.

Maps are there to show the easiest route as well as show you the wrong way. Sometimes roads are unpredictable and the right road may seem to lead to the wrong place. Other times the wrong road might seem to point directly toward your destination.

The point is – if your goal is to make it to San Diego as soon as possible you would not risk taking that trip without a road map.

So why do so many go through life without a map of their own?

Do you have a map?

How to Build Your Road Map

There are thousands of different ways to get from New York to San Diego. In the same way there are thousands of ways to get from where you are today to financial freedom. The path you choose depends on the type of trip you want to take. I want to look at three important aspects of your road map and let you decide on each.

What is your destination?

This first question may seem obvious – but I believe the vast majority of people do not know their destination! Just as a road trip to the “west coast” is not defined well enough to plot a map, a plan to “become rich” or “retire” is not defined well enough either.

When I first began investing in real estate at twenty-one years old, I sat down and plotted where I wanted to go. I wrote down my financial goal of achieving $6,000 per month in passive income from my real estate investments, as well as $500,000 in equity in those properties. I clearly defined the amount of money I wanted to make per month to achieve “success.”

This number wasn’t arbitrary either. I looked at the standard of living I wanted to have at thirty and decided at $6,000 per month I would be able to support my family without the “need” to work. I knew that if I could make it to that destination I would be free to quit my job and be a full time entrepreneur and real estate investor.

Once you define your objective, it’s much easier to define your map. Go take a minute to write down your destination on a piece of paper. Don’t worry – this article will still be here when you get back.

What is your time frame?

The second question I want you to define for your road map is your time frame.

Is “speed” your goal? Are you content with where you are? Do you hate your job and long to start your own business as soon as possible but don’t have the financial ability yet?

Is “the journey” your goal? Perhaps you are content with your position and only want to make sure you enjoy the ride and that you reach your destination by retirement.

Without an accurate determination of your time, it is difficult to construct a map that will adequately allow you to reach your goal. When I made my plan, I set a goal of being financially free by the age of thirty. I was not enjoying the work I was doing but instead longed to quit my nine-to-five and work for myself – without the risk of not making enough money that most entrepreneurs face.

Do you know how much you need to retire? If your goal is to retire with $1,000,000 in five years but have nothing to start with, putting $200 a month into a bank CD is not going to get you there. I’m not suggesting that bank CDs are bad, but earning 1% each year will not bring you where you want to be. You need to plan your “road trip” with reasonable expectations as well as solid math.

What is Your Vehicle?

Finally, you need to decide for yourself what vehicle (or vehicles) you are going to take to get to your destination.

I bought my first house at twenty years old and fell in love with real estate. I read hundreds of books on the subject and decided that investing in real estate was the path I would choose. I could have instead gone to law school, started my career making six figures, and set aside 30% of my income for retirement and I may have reached the same goal.

However, I didn’t love the law. I loved real estate. It is important that you find something you love and build your plan around it.

A Look At My Road Map

“Okay Brandon, I get the point. I need a financial road map – but what does that look like?”

I want to show you exactly what I mean by constructing a financial road map by letting you take a peak inside my own. Remember, this is simply the vehicle I chose to get from point A to point B, and yours may be different.

My road map began with a piece of paper.

Like I said before, I want you to actually get a piece of paper. A road trip without a map is bound to easily get off track.

I wrote down my ending goal ($6,000 per month in passive income and $1,000,000 in equity).

I then worked backwards. I know that in a good real estate investment, I need to achieve a minimum of $100 per month in passive income per unit to be a good deal. So, $6,000 per month equates to a minimum of 60 units. Now that could be homes, duplexes, triplexes, small apartments, or big apartments. Obviously, one sixty-unit apartment complex that fit my requirements would get me to my goal overnight – but I was starting with no money and I knew that would be difficult.

Instead, I began plotting my strategy of “Trading Up.” Trading up means to sell one property and use all the profits as a down payment on the next property. For example, my plan was to buy a home, fix it up a little, and resell it. I believed I could make, at minimum, $20,000 profit by doing this. I then took that $20,000 and used it as a down payment on my next purchase. When that one sold I used the $20,000 down payment I had applied earlier and the $20,000 I made on that property and ended up with about $40,000 in cash. Again, reinvesting that money into the next property I could quickly build the amount of money I was spending on properties and would grow exponentially. Eventually, I would begin transitioning to multifamily properties and by age thirty I would have the equity needed as well as the monthly passive income.

Fast forward to today. I made that plan six years ago and while I haven’t followed it exactly (you never can) I have stayed close to the original plan. I was able to quit my job by age twenty-five and now make enough passive income to cover my monthly bills. I still invest in real estate every day and am increasing my goal and re-drafting my road map to plot out the next phase in my journey.

What does your road map look like?

Perhaps your goal is to make $3,000 per month in passive investments and you want to do it within ten years using mutual funds. The same principle applies. How much money will you need to add each month to your goal (and what interest rate will you need to achieve) to get there? If you have $50,000 to start with, and add $800 per month to your mutual funds earning 11% average interest, you’ll have roughly $325,000 – which at 11% interest equates to about $3,000 per month. Is 11% reasonable? That’s a topic for another discussion, but it’s the principles I’m talking about.

Road Maps are Guides… Not Rules

As I mentioned earlier, it is almost impossible to follow a financial road map perfectly. While you can plot your course with diligence and extreme precision – there are still outside forces at play. I did not foresee the real estate crash when I made my plan, but because my map was based on sound principles and mathematics – I still arrived in the same place. The same applies for the stock market, small business market, and all other uncontrollable aspects of life.

Build your financial road map following sound principles and mathematics and you will get to your destination. Your road map is designed to keep you headed in the right direction at the correct speed. You may come across bumps in the road, dead ends, and even a break-down or two. However, if you hold as tight as you can to the map you’ve created you will pass through those problems and come out at your destination.

One final thought: road trips are awesome, but remember that you can’t take it with you. Enjoy!

Brandon Turner is the Senior Editor and Community Manager for BiggerPockets.com, the premier online real estate investing community, where popular posts like those on the Short Sale Process and Foreclosure Process help tens of thousands every day.

Tweet
Pin
Share5

Reader Interactions

User Generated Content (UGC) Disclosure: Please note that the opinions of the commenters are not necessarily the opinions of this site.

Comments

  1. Brandon Turner says

    December 18, 2012 at 11:18 AM

    Thanks Neal for the opportunity to write! I hope your readers will gain something from my ramblings! 🙂

    Reply
  2. Joshua Dorkin says

    December 18, 2012 at 8:35 AM

    Everyone will ultimately have their own roadmap, but I think one of the most important keys is to put one together. Sitting around and waiting for your financial future to come to you is a great passive way to get nowhere.

    Great post, Brandon! Big thanks to Neal for letting you share it here with the readers of WealthPilgrim.

    Reply
    • Neal Frankle says

      December 18, 2012 at 9:07 AM

      It is a great post Brandon and Josh is right. Having a plan – even a flawed one is far better than having no plan.

      Reply
      • Joshua Dorkin says

        December 18, 2012 at 10:16 AM

        Failing to plan is planning to fail . . . sums it up pretty well.

        Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Are You Human? * Time limit is exhausted. Please reload CAPTCHA.

Primary Sidebar

Who is Neal Frankle

Neal Frankle

I'm a CERTIFIED FINANCIAL PLANNER™ Professional with more than 25 years of experience. I feel very blessed and hope to share my personal financial experience and professional wisdom with readers of WealthPilgrim.
Read More »

Stay Connected

Facebook Twitter YouTube RSS
We are on YouTube
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

More Categories

Career Development
College Funding
Credit Cards
Credit Score Fixes
Money and Marriage
Debt Relief
Estate Protection
Property Investment Loans
Small Business Strategies
Spend Less Money
Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement.  We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

Retirement financial education for people age 55+ seeking to retire well and for those retired seeking to enjoy a better retirement. We discuss retirement planning, retirement investments, taxes in retirement, retirement spending, IRA and 401k distributions and we will personally answer questions that you pose in the video comments.

While so much financial information is about preparing for retirement, what about managing your finances in your retirement years? That's exactly what we cover at Retirement Crusaders.

Neal Frankle is a retired registered investment adviser. Larry Klein is a retired financial advisor and retired CPA. They have 70 years of financial advising experience to share so that you have your best retirement years.

YouTube Video UCoU0buhwVplzXrsyf342nOg

Retirement Crusaders

June 10, 2022 1:19 PM

Subscribe
This error message is only visible to WordPress admins

Error 403: Requests from referer are blocked..

Domain code: global
Reason code: forbidden

Disclaimer

Wealth Pilgrim is not responsible for and does not endorse any advertising, products or resource available from advertisements on this website. Wealth Pilgrim receives compensation from Google for advertising space on this website, but does not control the advertising selection or content. Please do the appropriate research before participating in any third party offers. The information contained in WealthPilgrim.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. Wealth Pilgrim does not provide investment advisory services and is not a registered investment adviser. Neal may provide advisory services through Wealth Resources Group, a registered investment adviser. Wealth Pilgrim and Wealth Resources Group are affiliated companies. In accordance with FTC guidelines, we state that we have a financial relationship with some of the companies mentioned in this website. This may include receiving payments,access to free products and services for product and service reviews and giveaways. Any references to third party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers.


About · Contact · Disclaimer & Privacy policy

Copyright © Wealth Pilgrim 2023 All Rights Reserved