B
enzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. For many investors, a carefree retirement means waiting until official retirement age and maximizing the value of retirement accounts. However, a younger crop of investors is now focused on generating passive income sources.
Shu Matsuo Post, a 38-year-old investor based in Japan, has achieved financial independence with his wife. They've built a path toward financial freedom, allowing them to live without relying on traditional jobs for funding their lifestyle and future. Commercial real estate has historically outperformed the stock market, but few investors have the capital or resources needed to invest in this asset class.
Matsuo Post told CNBC Make It that he's fortunate not to need to work for money. He enjoys making money, but can focus on maintaining his desired lifestyle without having to earn an income. The couple started investing in the stock market using index funds and ETFs after getting married in 2017. They later discovered real estate investing and began putting all of their extra income into rental properties.
Their first property was a $216,500 duplex in Minnesota, followed by three more rentals in Minnesota and New York. After being laid off in 2022, Matsuo Post left the corporate world for good. He now spends time with his family, studying, and writing about financial independence. The couple's real estate portfolio has grown to six properties in the US and three in Japan, valued at around $2 million.
Matsuo Post is confident he won't return to the corporate path, instead focusing on working on things that matter to him. He generates income through his consulting business and writing about real estate investing. "If that generates money, that's great, and if it doesn't, that's okay too," he said, as they have other forms of income supporting their lifestyle.
Passive income can be generated in various ways beyond direct real estate investing. Dividend income from stocks and dividend and bond ETFs can also deliver an income stream. Managing properties remotely can be challenging for many investors. Another option is to invest in fractionalized real estate, letting someone else handle leasing and property management details.
A growing crop of fractionalized real estate platforms, such as Arrived Homes backed by Jeff Bezos, allows investors to get started with just $100 and create a portfolio of rental properties. While this process may take more time to amass an income, it requires less time, allowing investors to focus their efforts elsewhere while building up that desirable passive income stream.
Investing in real estate comes with risks, as Eric Bramlett, an Austin-based real estate agent and broker, told Benzinga. "Real estate gives you options, but like anything else, it comes with risks." If considering investing in real estate for retirement, it's worth getting advice, running the numbers, and being realistic about what to expect.
