Home Personal Finance Retire on Real Estate by K. Kai Anderson: a TDD book review

Retire on Real Estate by K. Kai Anderson: a TDD book review

3 comments 21 views

This is a review of the book “Retire on Real Estate” by K. Kai Anderson.

I’ve been splurging a little recently on books from Amazon.  In keeping with my real estate obsession, my next book review is “Retire on real estate” by K. Kai Anderson.

This book review contain affiliate links.

The premise of this book is simple:  Secure the retirement of your dreams by securing cash flowing rental real estate.

  • Category: Real estate investing
  • Sub-category:  Personal finance and investor mindset
  • Author: K. Kai Anderson

Anderson has over a decade of real estate investing experience.  More importantly, she has a simple, relatable writing style and a cute way of thinking about real estate.

Part one: The egg

Is this your retirement?

In the early part of her book, Anderson outlines some serious flaws with the concept of the “nest egg”.  Currently, most Americans try to sock away enough money in their 401(k) plans to create a big nest egg and live comfortably in retirement.  

But the nest egg is fragile and prone to cracking, she writes.  

The nest egg retirement plan has the risks of:

  • Running out of money
  • Underfunding
  • Stock market fluctuations
  • Unscrupulous financial advisors
  • Plan fees, etc, etc…

Instead of a fragile nest egg, Anderson recommends buying a “chicken”.  The chicken, of course, is rental property.  

The benefits of owning a “chicken” (AKA rental property)

Anderson makes a strong case for the benefits of rental property.  These are similar to the ones outlined in my post introducing why I’ve chosen to go the real estate route myself.

  • Cash flow
  • Lower income taxes
  • A hedge against inflation
  • Diversification of assets beyond retirement accounts

She lists the risks of owning rental real estate:

  • Bad tenants
  • Plunging property values
  • Risk of vacancy
  • Risk of costly repairs

She calls these risks overblown and backs it up with her decade of experience.  

Part two: The Nest

This section is dedicated to building up the financial discipline and capital required to purchase real estate.  She calls it “preparing the nest.”

It is a good mix of motivation and common sense. I came away inspired to save money and with a great acronym for successfully achieving your goals.  

Make Goals “SMART” for success

S – specific

M – meaningful

A – action-oriented

R – realistic

T – time-specific

Part three:  The Chicken

Lay me some eggs!

This is the section that goes over various strategies to get started in real estate.

Some highlights include:

  • Renting out part of your house
  • Moving and keeping your first house as a rental property
  • Extract cash from your house via a HELOC or refinance
  • 401(k) loans

While I enjoyed this section, I didn’t love the idea of taking loans from your 401(k). This seems like taking your nest egg and dangling it over concrete. Too risky for my blood!

My thoughts

This is the perfect book for someone just starting to consider “alternative” investment into real estate.  Anderson aptly pokes holes into the strategy of relying solely on your 401(k) in retirement, and presents rental real estate as an appealing way to supplement your retirement.

Like a chicken, rental real estate will produce ongoing returns for the life of the investment.  

Nest eggs, on the other hand, are fragile and prone to cracking.  

For me, this book was a confirmation of my mindset.  So while I enjoyed reading the book, it didn’t evoke the same “come to Jesus” feeling that I felt while reading “The Richest Man in Babylon” or “Rich Dad, Poor Dad.”  

Next up in book reviews: The Simple Path to Wealth by J L Collins

Have a great week!

— TDD

Want to support the blog?

Related Posts

3 comments

Xrayvsn August 1, 2019 - 10:37 am

I agree with the principles of the book as well though I have never heard or read it before.

Real estate has its downsides but for the most part being able to generate positive cash flow without consuming the asset itself is what makes it so appealing to me.

Reply
Blueotter March 12, 2022 - 4:27 pm

Thanks for the review. Based on what I heard on a recent podcast, I’m considering reducing my contributions to my 401k (after maxing out for almost 20 years) and diverting the money to real estate. Is that what you’ve done?

Reply
The Darwinian Doctor March 13, 2022 - 10:17 pm

Luckily I’ve been able to continue fully funding my 401k despite my real estate investing. Especially early on in your real estate investing career, that’s the safe and conservative move for sure. If you’re pretty confident you’ll end up committing to real estate, I think it’s reasonable to rely on real estate to be your retirement fund. Many would call this risky, though.

Reply

Leave a Comment

About Me

Dr. Daniel Shin

Dr. Daniel Shin

I’m Dr. Daniel Shin, a surgeon, investor, and educator on a mission to fast-track your financial freedom. From a $300,000 debt to a diverse investment portfolio, I’m now just years away from financial independence. Ready to join me on this journey? Let’s go!

Featured Posts

Newsletter

Recommended Resources

profile-pic (4)

Hot off the press and on sale for a limited time!

My eBook will give you the tools to get started on the path to financial freedom. Learn about my financial journey and the shockingly simple math behind financial independence. Then find out how to define your Why to fuel your success!

Don't Miss A Post

A Darwinian Disclaimer

Since everyone is different, it may not be appropriate to generalize my doctorly advice to your own situation. Please run all medical, life, and financial advice by your own physician or financial professionals before applying it to your own life! Consider all information for your entertainment only!

Images and Copyright

To the best of my knowledge, the images used in this blog are either taken by my own camera, free stock photos, or considered allowable usage under "Fair Use" law. Please let me know if you believe otherwise.

Affiliate Policy

Affiliate Policy
As you explore the site, you may notice links to goods or services. I may earn a commision if you use a link to purchase any of these. While this blog is really just a labor of love and a creative outlet, if I can "keep the lights on" with affiliate links, all the better. Rest assured any reviews you read here represent my unbiased opinions, and there is no added cost to you to utilize the links. Please go here to read my full Affiliate policy.

Evolution Holdings LLC
All rights reserved.

@2024 – All Right Reserved.