We have all heard it and most of us working professionals have followed this path suggested to us by well-meaning loved ones or the culture in general. Invest enough in your 401k so that when you are eligible for retirement, you can withdraw from that nest egg and live off of it until you die.

Race Till Death

I could never quite articulate why this didn’t sit right with me. Maybe it was the sober thought of someday dying; or, knowing me, it could’ve been the fact that the idea is to draw from funds until they are totally gone. Now, after years of investing for cash flow, what is harder to understand is the idea of one eventually tapping into the very funds she spent her whole working life accumulating, in hopes that she dies before its totally spent. Well, that’s how the traditional 401k works.

When I think about wealth, I think about it outlasting me; not something that I tap into and live off of hoping I die before it is totally spent. For many mid to late-career working professionals, the majority of their net worth is in their primary residence or 401k. The house is not liquid, and unless you convert to cash, you cannot tap into that equity. The 401k is nice to look at for now, but it is designed for you to withdraw from. There has to be a better way.

A Better Way

As working professionals, we can do the work we do best and invest for our future. And I am not talking about future us…I am talking about future generations. I converted my unused 401k from prior companies into an EQRP (read about it here) so that I could invest in multi-family real estate.

Here is how we create lasting wealth. Cash Flow. Cash Flow is for life. When you have passive income from real estate, whether they are monthly rents from your rental properties or quarterly distributions from your limited partnership in apartment syndications, passive income allows you both the option reinvest for more income or live off of now or into retirement. Passive income gives you options. Rather than eat off of the tree as you eventually would when you withdraw from your 401k, hoping it outlives you, you can eat off the fruits of your real estate trees. And the best part, you can keep the trees and fruits replenish themselves each month by providing you with more income. Of course having a 401k is much better than nothing; but let’s think bigger.

Think Differently

One thing that I have learned on this investing journey is to think differently. If you want an average life, make average decisions. Otherwise, get educated and learn these amazing options that can help create wealth for you and your future generations. Check out our passive investor resources below!