RE: “Get Retirement Savings Back on Track” by Andrea Coombes, June 10, 2012
Dear Wall Street Journal,
You have provided solid advice and useful information over the years. I always enjoy reading your paper. But this one’s got me thinking…
“A major conundrum of retirement planning is estimating how long you will live…”
Stop right there.
I disagree with that on principle. If you’re doing it right, you’re setting yourself up with passive income streams that will feed you and your children and your children’s children for as long as you live and beyond, no matter how much time you have on this earth.
Annuities, index funds, IRA’s, 401(k)s – forget about all that. With those types of retirement planning, you put your money in, you leave it there, and at some point down the road you start taking it out and pray you don’t die before it’s all gone.
You’re Doing it Wrong.
With well-chosen, passive income-generating investment properties, you put your money in, and you immediately start getting a little bit of it back. and as time goes on you get more of it back in ever greater sums. Rents go up, you pay off the mortgage, the income becomes 100% profit, and on the day you die you’re making more money than on any day prior. After you pass, and the property goes on generating money for your family. You don’t have to fear that you may deplete it. When you manage it well, it will continue generating income for your family even after you’re gone.
So when I read something like the above from the Wall Street Journal, it boggles my mind a bit. The time and date of your passing should not be an issue when it comes to your retirement plan. You should be able to retire as soon as your assets are generating sufficient income month-to-month for you to live as you like.
Here’s an applicable Warren Buffet quote “Wide diversification is only required when investors do not understand what they are doing.” Do you understand the vehicles where you’re money’s invested? Are you in control of them?
Here are 12 other pertinent Buffetisms while we’re on the topic:http://www.creonline.com/blog/13-warren-buffett-quotes-for-real-estate-investors/
On February 12, 2012, CNBC’s Becky Quick asked Buffet what his preferred investment would be at that time. In addition to equities, he said, he’d buy up “a couple hundred thousand” single family homes if it were practical. If held for a long period of time and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down.
I hate to see investment dollars underutilized. If you’d like to talk more at length about real estate investing, please contact me anytime.