How to become work-optional in 7 years (4 steps)

If your goal is to invest with the intent of replacing your income and being work-optional, then this is the blog post for you. After seven years of investing in real estate, I was able to cover my expenses with passive income and could stop working if I chose to. This is something that typically takes people 40 years in the corporate world to accomplish.

Here are the four steps I followed to get this done in seven years, with the third step being something I’m surprised people are still getting burned by today.

1. Don’t Add, Multiply

A mentor of mine once told me: Don’t add, multiply.

Look for investments that multiply your wealth, especially when you’re starting out.

Here’s why:

Let's say you’re investing your first $50k. You find a real estate deal that pays you an 8% cash-on-cash return per year and put your money there.

That means you’ll get $4k per year. Not bad, but nowhere close to retire-early money. Instead, look for investments that can turn that $50k into $100k.

Focus on multiplying until you can invest $1M into that same deal paying 8%, and now you’re making $80k a year, which is retire-early money.

This is one reason I chose commercial real estate as my primary investment strategy. In this space, assets are priced by a multiple of net income.

Adding $1 of net income annually to a property can increase the property's value by $20 or $25 when you sell it.

Multiples like these are unique to commercial real estate, so when you’re starting out, look for strategies that can multiply your investment like these.

2. Use the “Who, Not How” Method

This concept comes from Dan Sullivan’s book with the same title. When looking to solve a problem, find out who can solve it for you, not how you can solve it yourself.

I’ve been in real estate since I was 18 years old. I can buy property, manage them, finance them, sell them, and do everything else from start to finish. But still, I scale through partnerships.

By partnering with other operators, I can reduce my own risk, leverage other people's skills and time, and expedite my timeline to success.

Stop looking to do it all yourself. Open yourself up to partnerships to get more done faster and live an easier life.

If you want to partner with our firm, get on our deal list by signing up HERE. Our team combs through hundreds of deals to bring the top 1% to the people on that list, and then we all co-invest to hit higher returns. There’s no better way to leverage partnerships in this space.

3. When Others Zig, You Zag

This is a principle that can save you from making costly mistakes. Two big examples that come to mind are multifamily investing in 2020-2022 and the bitcoin bubble that burst on so many people.

When everybody floods a strategy or niche, it’s probably not a great time to get in the game yourself. Booms are always followed by a bust, and you don’t want to catch on too late.

It’s one of the reasons we did just one deal in 2022. The market was so flooded that we knew if we held strong and were patient, we’d avoid the big bust.

That’s exactly what we did, and right now, everyone around us is feeling the downturn while we’re in a great position to capitalize.

4. Work with the Top 1% and Never Go Discount

I’ve used cheap vendors, property managers, contractors, suppliers, and discount deal sponsors. I’ve tried to squeeze extra profits out of my investments, and it always cost me way more money and time than just paying the best of the best what they’re worth.

It’s one reason we call ourselves Presidents Club Investors. The Presidents Club represents the top percentile of achievers, and we apply that mindset to everyone we work with. Our investments have been much more profitable when you pay great people a great price for great results.

Summary

This was my path to taking a 40-year journey down to seven:

1. Don’t add, multiply.

2. Use the ‘who, not how’ method to get bigger things done faster.

3. When others zig, you zag.

4. Work with people who are top in their field, even if it means paying more in the short term.

By following these steps, you can achieve financial independence and a work-optional lifestyle in a fraction of the time.