Have you ever asked yourself (or your friends) this question, “When can I retire?” Traditionally, we think of reaching the goal of retirement when we have $X in our bank account. For example, one will say, “I can retire when I have 2 million dollars in my bank.” Although that is a very common and safe approach, what we really need to think about is, how realistic is that?

Rich Dad gave us another pathway. Instead of thinking a set amount of dollars, the answer should be “I can retire when my passive income exceeds my active income.” Here is an example, let’s say I work my full-time W2 job and I make $5,000 a month. If I start investing in any type of passive income on the side, I can retire when my passive income is equal or greater than $5,000 a month.

Of course, the math looks simple but it is not always applicable like that, as in nay sayers will go “when you have $5,000 active income and $5,000 passive income, your spending behavior will change to spend $10,000 a month!” Well guess what? There is definitely some truth to that statement! We are human beings and not always perfect, but what we need to do is to have discipline. We need to make short term sacrifices in exchange to achieve long term goals.

Although real estate is what we at DoorInvestor think is the best way to accumulate passive income, we also understand that it is not the only way. For this blog post, the type of vehicle you use to earn passive income is irrelevant, what is important is that you do it, and you start doing it today.

Our associated recommended reading is Robert Kiyosaki’s Retire Young Retire Rich.