[askafriend]

Good sir, please riddle us with tales of how you have discovered the serenity of "f-u" money.

The foundation of this community rests on lore of "f-u" money and we simply ask that you contribute to the lore that keeps this place alive....and that keeps this place....human.

[toomuchtodo]

Not OP, but also have a bit of "f--- you" money.

Save diligently. I have enough cash liquid to survive for two years without any income at my current burn rate. You think you need cable TV? You don't. You think you need fancy cafe coffee? You don't. Do you carry balances on your credit cards? You don't anymore. That's a debt emergency, and you're getting out of it ASAP. The list goes on.

Save diligently, and you too can have enough money saved to be confident in your future.

[gautamnarula]

Check out Mr. Money Mustache, /r/financialindependence, etc. Essentially, you save as aggressively as possible until you have at least 25x your living expenses saved and invested (and with compounding returns, this can be done relatively quickly with an aggressive savings rate). The rule of thumb is yoi can safely withdraw 4% of your savings a year, so at this point you are now financially independent. Of course, getting there requires some tough decisions about how you spend your money and time, and what tradeoffs are worth an earlier retirement date.

[gt565k]

you can also invest in 2-3 rental properties, and use the monthly payments of your tenants as passive income

[Unklejoe]

I am doing this. I save up my money and keep it invested in some ETFs until I have enough for the 25% DP on an investment property.

I'm currently in the process of saving for my second property.

My advice to anyone who's considering getting into the landlord business:

1. Buy properties in (up and coming) college towns. Many people advise against this, but it's very hard to beat the returns. This is especially true in towns where the housing values haven't caught up to the situation yet. I am getting more than double the rent that I would be able to get if my house was in a "normal" town. A typical dorm room costs $800/month for each student at my local state university, so students would much rather live off campus in an actual house for the same price (or less). You can get 5 students to share the house and charge $2600/month (for a house that costs under $160k). It's a win-win honestly. You may have to deal with typical college issues, but it's really not as bad as it sounds. I would rather deal with some holes in the wall than a family of 4 who just doesn't have the money to pay the rent, forcing you to go through the eviction process. College students typically have access to "unlimited" money in the form of student loans or their parents, so you're less likely to have to chase your money down. I've yet to receive a payment more than one month late. Just keep in mind that students typically receive their refund checks two times per year, so you may have to be patient. Also, it wouldn't hurt to have their parents sign the lease in case the student decides to blow the refund check or something.

2. Learn how to do home maintenance tasks on your own. Plumbing, painting, etc. You will save large amounts of money this way. Just be sure to reduce liabilities by not doing something that could endanger the tenants. In other words, don't do your own electrical work unless you know what you're doing.

3. Don't underestimate the work required. There will be issues. It's not a truly passive investment in that sense, but this is why the returns are better than many other investments. For example, I've had to unclog the shower drain three times, and it always seems to be at inconvenient times. But when they call about something like that, you're obligated to provide a fix ASAP. Other minor issues can wait a little longer of course.

4. Reward good tenants. If your tenants have not given you any problems, it's worth giving them a little incentive to stick around.

5. Take everything I just said with a grain of salt. I've only been in the game for two years.