People that aren't in real estate often wonder, how do people even have the funds to invest in real estate. Initially, it is not easy, as it requires discipline and savings. However over time, the compounding effect of savings + passive income = creates higher growth potential.
Here's an example of what could happen.
No real estate, income goes towards savings and expenses
Your income is a combination of two things - your expenses and your savings. Your income goes towards paying off your expenses, while savings, it is an important part of a financial plan, but it's not the same thing as passive income.
Stage 1: Enough savings to finally obtain the first real estate acquisition. Continued savings + income from asset #1.
Stage 2: Continued savings + income from asset #1 results to 2nd real estate acquisition, but on a shorter timeline.
Stage 3: Compounding effect starts to occur, as income from assets #1 + #2 can result in = #3 and #4 much quicker, can cover your expenses, which can eventually give you enough passive income to live life on your own terms.
Stage 4: Live on your own terms, and solely enjoy life of passive income!