Why do we invest? Sometimes it’s for our children; to fund an education and a more secure future. Sometimes it’s for our legacy; to be able to contribute to worthy causes and leave something behind. It could be a combination of factors. But for most of us, the calculus is simple: How can I be free of dependence on work-related income as fast as possible? The idea of “financial independence” is not just about working less — indeed, many of us will go on working, or shift the meaning of “work” in our lives, after formal retirement.
Financial independence (FI) — or as many in the movement go on to call it, “FIRE” (Financial Independence, Retire Early) — is achievable with a focused investment strategy, and real estate can play a pivotal role in that journey. This whitepaper explores how a diversified real estate portfolio, built on different positions in the capital stack, can potentially help self-directed investors bolster their financial independence prospects. We’ll explore:
- The general case for commercial real estate investments (as a less-correlated, income-generating asset class) as part of an “early retirement” strategy.
- Specific strategies for pursuing FI within a 10-20 year horizon, with private-market real estate as a pillar.
We will also take a look at some of the axioms of FI-minded retirement investing, and how those axioms serve investors today and going forward.