How many properties do you need to be financially independent?
The potential answers are:
If you answered either A or B you are incorrect.
If you answer D or E you are also incorrect.
But if you answered C then congratulations — you are wrong also.
It’s a trick question.
It’s not about the number of properties you have in your portfolio.
And that means it’s not about the number of properties you have but the size and value of the assets in your portfolio that is most important.
I could tell you I’ve got ten properties that are worth $100,000 each one with the total value $1 million or I can tell you I have 10 properties that are worth $1 million each one with the total value $10 million.
The propositions are entirely different.
A classic example of this is the Forbes Rich List.
In list such as this they’re talking about people’s net worth.
That’s the most important thing.
Your net worth is calculated by taking the total value of your assets and subtracting your liabilities.
Value is what is most important.
So when you hear that you need to buy ten properties in ten years or five properties to retire – that’s rubbish.
Your level of financial freedom really doesn’t have anything to do with the number of assets you own.
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