5-Year Plan: How to Achieve Financial Freedom with Real Estate

What drew me to real estate investing was the idea of financial independence: creating enough passive income from real estate to cover my living expenses so I wouldn’t have to rely solely on my work as a dentist.

Then, at 40, a wrist injury while skiing forced me to confront just how quickly my dental income could be disrupted.

That experience became my turning point—my WHY, so to speak. I knew I needed to build a real estate portfolio and secure financial freedom outside my practice, but honestly, I didn’t have a clue how to start.

The truth? Financial freedom didn’t happen overnight. But with steady progress, I’ve built consistent income streams that look very different from relying solely on my dental income.

And here’s the good news: with the right approach, you can reach financial independence (FI) within just a few years.

But you’ll need to rethink and redefine how you act today. If you’re ready to live life on your own terms, dive into this five-year plan to achieve financial freedom like you never have before.

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Let’s Redefine Financial Freedom

Let’s start with a reality check: if true financial independence means covering every dollar you spend with passive income from rental properties and other real estate investments, reaching it in just five years might sound nearly impossible.

But here’s the good news—you don’t need to cover every penny with passive income to transform your life.

Work Optional Status

I’ve coached multiple doctors who’ve attained financial independence and created a “work-optional” lifestyle through real estate portfolios. And here’s the real insight: financial freedom doesn’t mean never working again—it means working because you want to, not because you have to.

Why? Because there’s only so long you can binge-watch Netflix or sit on a beach.

If you’re here, you’re not aiming for endless downtime. You’re here because you’re driven to achieve financial freedom, establish cash flow, and invest in rental properties that give you the option to work on your own terms.

The truth is, after a few months of traveling the world, building up your net worth, or checking off your bucket list, you’ll start to think, “What’s next?”

Financial independence gives you the freedom to make those choices based on your financial goals, your real estate investment strategy, and the passive income streams you’ve worked hard to create.

Earning While Doing What You Love

With work-optional status, you might go back to work—or you might not. If you do, it won’t be the same high-stress pace; it’ll be work on your terms, likely pursuing what I call dream work.

Dream Work

Dream work could mean starting a business, diving into creative projects, working for a nonprofit, or any meaningful pursuit you choose. But whatever shape it takes, you’ll probably earn some active income along the way.

So, the question becomes: “How much does my dream work pay, and am I content living on that?” If the answer is yes, congratulations—you’ve already achieved the freedom to work if and when you want.

If your dream work doesn’t quite cover your lifestyle, then you’ll have a clear idea of how much additional passive income you need to bridge the gap.

That’s where a strong real estate portfolio can support you, providing cash flow from rental properties and passive income streams that allow you to live comfortably.

I figured out my take-home pay from my dental practice. After I had that number, I had something to shoot for in replacing it with real estate syndications.

Related article: Real Estate Syndications: How I Started Investing as a Dentist

5 Freedoms

Most of us are after what I call the five freedoms when we reach work-optional status:

Benefit	Description
Peace of Mind	You’re no longer worrying about monthly bills or mortgage payments.
Control Over Your Time	You set your own schedule on your terms.
Freedom to Roam	You can work from anywhere you choose—whether it’s Costa Rica or your hometown.
Purpose-Driven Work	You’re engaged in projects and pursuits that bring you meaning.
True Financial Independence	While full independence may take time, these freedoms provide security and fulfillment as you progress towards complete financial independence.

Join the Passive Investors Circle

Set a Target for Passive Income

If you don’t have a clear financial goal yet, take a moment to consider it. (For more help, check out this video on setting effective financial goals.)

Determining Your Monthly Income Gap

Let’s say your dream work doesn’t quite cover your target living expenses, so you’ll need some passive income to make up the difference.

For example, if you want to live on $7,500 per month but your dream work provides $6,000, you’re looking at a $1,500 monthly gap. This is the amount you’ll need to generate through passive income.

How Much Do You Need to Invest to Reach Your Goal?

Now that you have a target, the question becomes: how much do you need to invest to achieve that level of passive income?

It all depends on your expected rate of return. Let’s assume you can consistently earn a 10% annual return from your real estate investments. To generate $1,500 per month (or $18,000 per year), you’d need about $180,000 invested, since 10% of $180,000 equals $18,000 annually.

The Challenge of Consistent Returns

Consistently earning 10% or more is challenging with traditional assets like stocks or mutual funds. Even if you averaged a 10% return, withdrawing that amount annually can be risky, especially with the volatility in the stock market.

A downturn at the wrong time could significantly impact your portfolio’s value—this is known as sequence of returns risk.

Why Conservative Withdrawal Rates Are the Norm

This is why most retirees limit their annual withdrawals to about 4% of their portfolio, despite the S&P 500’s historical returns of roughly 10%. They can’t afford the risk of running out of money over 30 years, so they prioritize stability and take a more conservative approach.

Real Estate

Fortunately, real estate offers more flexibility. With the right property management and steady rental income, you can achieve consistent cash flow, allowing you to generate passive income without needing to withdraw from a volatile investment portfolio.

And with rental properties, you’ll also benefit from property appreciation and equity gain over the long term—giving you multiple ways to reach financial security.

Taking Strategic Risks in Real Estate

If your goal is to reach financial independence by 30, 40, or even 50 instead of waiting until 65, you have the flexibility to pursue investments with higher returns.

In the worst case, you can still keep working even if a deal doesn’t turn out as planned. You don’t need to settle for Treasury bonds or low-return investments just to manage risk.

Higher Returns

Some real estate investors consistently see returns of 20% or more annually. They’ve refined their approach, completing hundreds of real estate deals, including my favorite mobile home park and RV park investments.

Of course, this isn’t typical for everyone. But for those of us committed to reaching work-optional status, high-return, lower-risk opportunities exist if we know where to look.

This changes the question from if high returns are possible to how you can achieve them.

Passive Investors Circle

That’s why I created the Passive Investors Circle—a group where busy, high-income professionals can invest alongside our group, Streamside Parks, a private equity group that invests exclusively in RV parks. 

Choosing Your Real Estate Path

While building my network, I’ve met hundreds of investors with diverse strategies, including:

• House and land flippers
• Investors in mobile home parks and single-family rentals
• Multifamily and mixed-use property investors
• RV parks
• Short-term and vacation rental investors
• Industrial and retail property investors

There’s no one “right” way to succeed in real estate investing; there are just different methods that better suit different goals.

My Plan

I started as a limited partner (LP) years ago, which helped me learn what real estate syndications were all about.

Initially, I wasn’t involved with active investing (i.e., tenant calls, property management hassles, etc.)

Now, I’m shifting more to the active side of investing as I transition out of my dental practice (my wife told me I needed something to do!).

You Know What’s Best For You

Most financial coaching clients ask, “Jeff, what do you think I should invest in?” I tell them the same thing. “I’m not you; you know what’s best for YOU.”

Your path might look different.

First, decide whether you want to invest actively or passively. Active investing means choosing a specific niche—whether it’s RV parks or multifamily properties—and becoming an expert to generate consistent income and higher returns. You’re involved with the management (tenants) process.

If you’d rather invest passively, you can diversify across various asset classes, spreading your money among skilled real estate experts in each niche.

This lets you enjoy the benefits of real estate without the day-to-day management, freeing you up to focus on the big picture of your financial future.

Set a Timeline

With your investment strategy and financial goals established, the next step is setting a clear timeline for reaching financial freedom. Mapping out a realistic path helps you gauge exactly how much money you’ll need—and when—to achieve your passive income target.

Example

For instance, let’s say I expect my rental property investments to yield an average return of around 10% annually. If my goal is to generate $1,200 per month in regular rental income, I’d need approximately $144,000 invested in commercial real estate or other investment properties to meet that target.

To reach this within two years, I’d aim to set aside about $5,500 monthly.

Experiment with these numbers using an online savings goal calculator to see what timeline best fits your financial independence journey.

Boost Your Savings Rate

The more cash you can set aside each month, the faster you’ll reach financial independence. Reducing expenses and investing those savings back into your real estate portfolio is a great way to build momentum.

Personally, I’ve adjusted my lifestyle to match my financial goals. By working three days a week in my practice, I have the flexibility to focus on my real estate investments and manage my finances for long-term growth. Keeping a strong savings rate has been key in accelerating my path to financial freedom.

Think about your own lifestyle: Could you reduce car expenses, explore house hacking for lower housing costs, or find other ways to trim unnecessary spending?

The Fast Track to Financial Freedom

In my early days, I thought the ONLY way to wealth was to follow the advice of financial advisors: work for 40 years and invest in the stock market with a 401k. 

A Simple, Steady Approach

Now, I follow a more straightforward and consistent path. Each month, I invest regularly in real estate—whether that’s in mobile home parks, RV parks, or other income-generating properties.

By setting aside a certain amount of money each month, I steadily grow my investments that I can pass along to members of our Passive Investors Circle. 

The Results: Passive Income and Financial Freedom

And here’s the best part—it’s working. Since adopting this steady strategy, my passive income and net worth have grown steadily. Today, I work in my dental practice three days a week by choice, focusing on work that I enjoy, while my passive income continues to grow behind the scenes.

Building Wealth by Staying Consistent

By maintaining a high savings rate, aiming for strong returns, and carefully managing risk, you too can build passive income to complement any active income you choose to earn. With dedication, financial independence is achievable within a few years.

Don’t Settle for the Average Path

Most people choose a different route: they spend almost every dollar they earn and stay tied to jobs that may not fulfill them, often with limited control over their schedule and freedom.

But you don’t have to follow the crowd. Build a life on your terms. Real estate is a powerful tool that can help you achieve financial freedom if you make your ultimate goal living an extraordinary life—one focused on freedom, not just running on the earn-more, spend-more treadmill.