Let’s face it, we all want to retire. To those of us who have a job we don’t like, waking up on a Monday morning and dragging yourself into work is hard. We slave at that job all week and dream of the weekend. Only two short days of relaxation and doing the things you enjoy before Monday rolls around again. If you work at that job for 40+ years and max out your 401k contributions, you just might get to retire. What if there was a way for you to retire early without wasting 40+ years of your life working for someone else?

So how can you use passive income to retire early?
This example is for a 9 year period and the same example that started my real estate investing journey.

This is my typical deal.
$400 a month cash flow after principal, interest, taxes, insurance (PITI) and $100 a month maintenance and vacancy reserve.
$12,000 down. This is the total down payment including everything out of pocket.

Month 1:
Start saving $420 a month, should be manageable for most people, and start buying income-producing assets instead of speculating in the stock market.

In 29 Months you save up $12,000 – Use this on a down payment on a rental
Now Saving $820 a month ($420 from earned income, $400 from cash flow)

15 Months to save $12,000 – Use this on a down payment on another rental
Now saving $1,220 a month

10 Months to save $12,000 – Use this on a down payment on another rental
Now saving $1,620 a month

7 Months to save $12,000 – Use this on a down payment on another rental
Now saving $2,020 a month

6 Months to save $12,000 – Use this on a down payment on another rental
Now saving $2,420 a month

5 Months to save $12,000 – Use this on a down payment on another rental
Now saving $2,820 a month

4 Months to save $12,000 – Use this on a down payment on another rental
Now saving $3,220 a month

4 Months to save $12,000 – Use this on a down payment on another rental
Now saving $3,620 a month

3 Months to save $12,000 – Use this on a down payment on another rental
Now saving $4,020 a month

3 Months to save $12,000 – Use this on a down payment on another rental
Now saving $4,420 a month

Do this for 2 more years averaging a new rental every 2 months. In 9 years, you will own 22 rentals and have a passive monthly income over $8,800 per month!

If you already have reserves saved up, you are starting ahead of the curve. If you are comfortable with less passive monthly income, stop anywhere along the way. If you want more, keep going. The key is to start. You have to make that jump.