Personal Finance

I'm 44 with $2.2 million in the market and these are the 3 things I want to accomplish with my portfolio

Marc Guberti

Published: February 10, 2025 11:18 am

A Redditor has accumulated $2.2 million in his portfolio. That doesn’t include $500k in a 401k, $3 million in residential rental properties, and $750k in cash. He has also saved $500k in each of his three kids’ 529 plans.

He shared these financial details in the Fat FIRE Reddit community. He has three objectives: upgrade his house and pay for it in cash, increase rental income to $50k per month with zero debt against the portfolio, and afford luxury private schools for each of his three children. Those schools come to $35k/yr from K-12. 

I’ll share my thoughts, but it is good to speak with a financial advisor if you can.

We Don’t Know the Redditor’s Monthly Income

The Redditor’s annual income is a key component that determines how many real estate properties he can buy. He collects $26k in gross rent per month, but we don’t know much details beyond that. A higher monthly income makes it easier to buy additional properties, but he may want to consider leverage in the beginning.

He mentioned the $3m property is free and clear, so a HELOC can help him make the down payments for additional properties. Scaling real estate initially involves a lot of margin. While the Redditor seems like he is already financially set, more leverage is necessary to reach $50k per month in rental income.

Buying up properties now gives them the opportunity to appreciate in the future. That also means raising rent over time instead of moving at a slower pace and missing out on good deals.

Is the $50k Rental Income Necessary?

The Redditor already earns $26k/mo from rental properties, but going from $26k to $50k per month will require additional work. It can also create more legal issues and present other risks. 

Buying dividend stocks and growth ETFs can still provide the cash flow without as much work. The Redditor already has $2.2 million in the stock market, but more investments in the market can lead to higher returns than the pursuit of $50k in monthly rental income.

A major perk with real estate is the tax benefits, and the extra leverage doesn’t hurt either. While the Redditor prefers to be in as little debt as possible, incurring debt now for multiple units will make it easier to pay off the debt later. You will have more properties producing cash flow that you can gradually increase over time.

Prioritize the Children

The Redditor mentioned one goal that directly contradicts another. He wants to send each of his children to private schools, which cost $35k/yr for each child. That high price tag lasts from K-12, and it’s going to make it more difficult for the Redditor to reach $50k/mo in rental income.

However, the Redditor will eventually pass his fortune on to his children, and he has already done a great job. Furthermore, he has allocated $500k to each of his kid’s 529 plans. 

It’s perfectly fine to have a lower monthly rental income figure if you can use the extra money to provide the best opportunities for your children. Using leverage to buy additional properties may be a good way to boost rental income. Eventually, the debt will be repaid, and the Redditor will end up with additional properties.