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Investing in Real Estate and Passive Income For Financial Independence

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Imagine growing your wealth over time

When you reach retirement age, you probably already have a number of retirement-savings objectives. While you’re still capable of planning for financial independence, you may need to adjust your investment strategy or redefine your concept of retirement comfort. Whatever the case, it’s important to write down your retirement objectives and keep them in mind. Investing in real estate and investing in passive income are great ways to reach financial independence in your later years. Here are some tips to help you reach your goals.

Passive income

There are many ways to earn passive income, including renting out your home to make money on vacations. One strategy is to engage in retail arbitrage, selling items that are cheaper than market value and profiting from the difference. By doing this, you can attract a loyal customer base and generate passive income from home. However, you must invest your money wisely in order to see any significant returns. Passive income for financial independence requires patience and a clear plan.

Saving for retirement

You can increase your savings by paying off high-interest debt, such as credit card balances, student loans, and personal loans. However, high-interest debt should take priority, since it consumes the bulk of your income. According to the Schroders Global Investor Study, over 20,000 investors worldwide put aside an average of 15% of their salaries for retirement. Moreover, paying off your home early will free up more money for retirement.

Investing in real estate

If you are looking to achieve financial independence, investing in real estate is a great way to start. While the rewards are plentiful, there are some challenges as well. One of these is the lack of liquidity. Real estate transactions can take months to close and several weeks to find a counterparty. To overcome this, it is important to have a plan and a network of professionals. After all, no one can do everything.

Taxation

Strategic tax planning and financial independence go hand-in-hand. Taxes are your largest expense, so properly managing them is essential to your financial independence. While some strategies are only relevant for 2018 tax returns, many are beneficial for future tax planning. Here are three key tax planning strategies:

Starting early

Taking early action and a budget are the best ways to begin your financial independence journey. You will have more time to work towards your goals. Depending on how many years you plan to live in retirement, your annual expenditure may need to be adjusted to account for inflation. If you have children, you may also need to consider contributions to a 529 college savings plan or high yield savings account. Regardless of your age, starting early for financial independence is the best way to save for college.

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