Too many of all these posts asking “ I have x, can I FIRE?
Here is a decent approximation on FIRE number:
Annual spending * (1+marginal tax rate) * (1 + inflation) * IF(life expectancy- age > 30, THEN 30, ELSE life expectancy - age)
Multiply by another factor of 2 if you think divorce is in the cards.
30x multiple gives you a 3.3% withdraw rate, pretty good estimate for long retirement. 25x is for a standard retirement age at 65 which is a 4% withdraw rate. I don’t include Social Security as this is for FIRE. Remember, it’s all about how much you spend so get a good estimate on that. In addition, learn about safe withdraw rates for different portfolio allocations to make sure that multiple makes sense for you. And don’t forget to account for medical insurance. Tweak to fit your own circumstances.
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is what you need to have in your account when you retire. No need for complicated formulas. Taxes, Market downturns, Unforeseen expenses and Inflation would eat up your annual investment growth. So that evens out.
No mortgage is a bonus.
You will have to see if your earnings and savings is going to get there or you need course correction first.
Age, life expectancy, withdrawal rate has nothing to do with it.
Are you based in Bay Area? Do you happen to know any such event organized by deal sponsors, where I could join virtually? I’m fine to travel to meet some quality sponsor. Also before first deal, I’d talk to some lawyer to verify the paperwork’s. 80/20 distribution looks reasonable for hands-free RE investment. Don’t know why Opendoor or Offerpad yet offer such investment tool.
It's a good idea to have a lawyer to review the paperwork. Make sure that lawyer specializes in private security offerings.
80/20 is on the generous side. More typical is 8% preferred return and 70/30 afterwards.
I also know of very greedy sponsors where they would pay 8% preferred return, then refinance the investors out (return their capital), and then pay them 10% of the rest of the profits while keeping 90%.