Future Plans

I turn thirty this year and I don't have much to show for it. I still have a large car loan, massive credit card debt, and student loans on top of it all. I don't own a home and my wife currently lives in another country. That is all going to change.

In the next 12 months (July 2011 - July 2012), I will pay off all of my credit cards and make as big of a dent in my car payment as I possible can. Right now, I am paying $1,000 every paycheck towards this goal. Yes, if you do the math...26 paychecks in a year x $1,000 = $26,000 = the amount of credit card debt I have. It will be a little stressful at times, but I do have leeway in this plan. If in one month an unforeseen expense comes up, I can still pay cash by reducing my debt payment a bit. At least I won't be accruing more credit card debt.

The next phase (July 2012 - July 2013), I want to buy a multi-unit home, like a duplex or fourplex. I figure that with no credit cards to pay, I can save almost $2,000 a month plus any money my wife can put away as well, which should be almost $10,000 for the year. So that would give us about a $34,000 plus another $6,000 that my wife had previously, for a $40,000 down payment or 20% on a $200,000 house. Also, my wife have has already saved $16,000 which would be used as renovations/emergency money.

After that, its onto the family phase. We hope to start a family after getting our first home and that will definitely cut into our investment ideas. For the next two years (July 2013 - July 2015), I would like to save $50,000 for a down payment on an residential property. That's about $2,000 per month towards the down payment and an other $1,000 per month towards the kid's college fund (wife's salary). The residential property would be our primary home and the duplex/fourplex would be come our investment property.

It is now Fall 2015, and God willing, we have two kids and a dog, living in a good home. Repeating the process from earlier, we save $50,000 for a down payment on our second investment property over the next three years. So by 2018, we will have purchased our second multi-family property.

We continue the same process every three years. 2021, another property. 2024, another property. 2027, another property, which brings us to five investment properties total. The first one was purchased 14 years earlier in 2013 and should be almost paid off (bi-weekly payment plan). At this point, we would look at where we want to be in life in the next ten years. I would like to not be working and have a steady income coming in.  The plan from this point would be to sell off the first three properties, take the profits, and using a 1031 exchange purchase a large 40-unit apartment building.

Then for the next 5 years, we would pay down the remaining two smaller investments and improve the apartment building. In 2032, I will be retired from the government and my kids will be off to college. Al this time, we have saved $1,000 a month (kids get expensive so I had to cut back on the investments) for a total of $60,000. I would want to sell the smaller properties and purchase a second large 50-unit apartment building with the $60,000 and 1031 exchange of the other investments. That would give me 90 apartments generating $90,000 per month ($1,000 rents) with a Before Tax Income of $10,000 per month. (A 89% Operating Expense and Debt Service rate is very high but I am being conservative)

From here, we would live life where ever we want and how we wanted. Our primary home would be paid off and we could manage the two apartment buildings on our own. As we saved more money each year, we would make large equity payments to the properties so that by the time we both 60, the apartments would be paid off. That would mean at age 60, we would own outright a home, and 90 apartments that generate $60,000 per month in income. Life would be good...