The answer to this is relatively simple. This will be the minimum I will be comfortable with the acquire my ideal realty company. I will also have a couple of other businesses, but the main reason is the realty company. I would have almost a dozen of properties that I would need to acquire, gut, renovate, and rent out. This costs a lot of money, and in one case, I will be constructing a complete building that is currently an empty lot of land. A simple breakdown is as follows:
- $5,000,000 – Cash on Hand
- $5,000,000 – Investment account
- $15,000,000 – Realty company
Cash on hand will be used to grant a couple of people some money, buy my automobile, and have money set aside to have a fall back plan if I should not get as much as I would like to have from the investment account. The whole goal is to use this money to live off of until I am able to generate a sufficient amount of capital gains.
The investment account will be assumed to have an ROI of 9% which means every month, I should expect to see a gross income of $37,500. This monthly income is more than sufficient to acquire everything I would need to live. It would also help in paying employees during slow months. I don’t expect my convenience store, nor pizza shoppe to generate a profit for a few years. Employees still need to be paid though whether or not the business was successful that month.
The realty company will be large. The idea is to acquire buildings that I would want, or likely to be cheap to buy. I will then gut the building down to its skeleton. This will involve removing old pipes, wires, and other lines. This will be especially necessary if the building was sitting empty for a while. Mice could have gotten in, and chewed the wires. There could also be Knob and Tube wiring which needs to be removed when discovered. If there is any asbestos, this has to be addressed as well. There will be the renovation work which will run all new everything. The perimeter walls will have spray foam insulation to keep a thermal break, and the indoor temperature indoors. All of this will cost money, and while I am sure it would not consume the entire $15,000,000 – I am confident that I will get close to this amount.