My goal is to retire at age 55. For a long time, I’ve had this retirement age in mind. I’m 45 now and only have 10 years left to achieve my retirement goals. Like most people, I’ve always had a vague picture of what I want my retirement to look like – sufficient passive income from rental properties and business to cover my living expenses; zero mortgage on my primary residence; etc. While I had this picture of my ideal retirement life, I had not done anything concrete to assess my ability to achieve my retirement goals.

Recently, for the first time, I had clarity. I spent some time thinking about this and putting on paper the exact sources of income I want per year and the value of the assets I need to accumulate to generate the desired income. I considered income from different currencies as well, particularly, USD. One of my goals is to continue to travel and explore the world and I figured I need to generate income in USD to minimize my exposure to foreign exchange risks. Below is an example of what my annual retirement income goal looks like in both Canadian and US Dollars:

Income Source                                                                                   CAD                 USD

Passive investment income (Dividend and interest)                    $100,000         $50,000

Rental income (Real estate)                                                               $120,000         $60,000

Passive business income                                                                     $60,000           $24,000


This will be different for everyone. A good question at this point is why did I arrive at this income level? Is it excessive? Is it conservative? For me, this was not random. I arrived at this after careful examination of my current expenses and future retirement living expenses. This analysis helped determine my desired income levels. My goal on retirement is to live only on 25% to 50% of my income, reinvest about 25% and give the rest to Charities, family and friends.

The most insightful part of my exercise was the gap analysis between where I am today and where I want to be in 10 years. This insight provided the clarity I needed. I examined my current portfolio of my investments, real estate and businesses and I estimated the asset levels needed to generate $100K in annual dividend/interest income and the rental properties required to generate $10,000 in monthly cash flows. For example, my gap analysis showed I will need to pay off approximately $550,000 in mortgages on two of my current rentals and acquire additional 16 properties generating $250 per property per month in cash flows to meet my retirement income goal from my Canadian rental portfolio.

After looking at the gap over my entire portfolio, my initial knee-jerk reaction was to cut my desired retirement income in half. I thought to myself, it’s impossible to achieve this, my income objective is too aggressive. I was flooded with lots of negative thoughts, a feeling of defeat. I slept over this and gave it some more thought. When I returned to it, this time with my wife also looking at the analysis, she validated my initial thoughts saying the goals are not realistic, certainly not what I was hoping to hear! However, as we considered what we’ve accomplished over the last 10 years – we’ve doubled our household income, completed 15 real estate transactions and now hold a portfolio of 7 rental properties generating over $3,000 per month in rental cash flows – we figured it is possible to accomplish our retirement goals. We know people that have done better in less time and with the experience and clarity we now have, we can do much better over the next 10 years.

We concluded that our retirement income goals are not excessively aggressive. Although we consider them to be stretch goals, we believe they can be accomplished based on the following reasons:

First, we now have total clarity! This analysis helped as I now know exactly what income I need to work towards and what assets I need to accumulate to generate that income. For example, if we bought at least 2 properties per year for the next 10 years, we will be well on our way to meeting our retirement income objective for our Canadian rental portfolio. Over the last 3 years, we’ve bought about 2 to 3 properties per year so this can be repeated. In addition, clarity will help focus my effort and energy. I can now easily say “NO” to opportunities that don’t line up with my retirement goals. This alone is priceless!

Second, we have time! 10 years may seem like a short time and I would agree it is in some ways. However, 10 years gives us sufficient time to plan, to brain-storm great ideas and even correct and recover from mistakes. For example, the $550,000 in mortgages I need to pay off on two of my rentals over the next 10 years can be broken down to $55,000 per year. Broken down like this makes it achievable considering that my tenants will continue to pay down the principal on my rentals over the next 10 years and I can generate income from other sources to contribute to the mortgage pay down.

Third, we now know better! Through experience, reading, learning from our own mistakes and the mistakes of others and association with Business Mastermind groups, we are better equipped to get better results. I have grown my knowledge base and I am surrounded by a network of people smarter than I am.  As a result, I am now exposed to great ideas, strategies and tips that will accelerate the income from my investments and businesses.

Finally and more importantly, I subscribe to a faith that promises me anything I want so long as I believe. I believe in God and that gives me the confidence I need to believe in my ability to make my retirement goals reality in 10 years.

I am confident you can do the same if you first seek clarity. Best of luck!


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