Anyone can have a pension fund, but successfully investing for retirement is a horse of a different color. Of one thing you can be fairly certain. If you follow the herd, watch cable television financial shows, and invest everything in the stock market, there’s a good chance you’ll end up with exactly what everyone else has – a job greeting Wal-mart customers in their Golden Years. Nothing wrong with that, but how many people retire with that as their goal? Wouldn’t you rather be lounging on the beach or banging little white balls off car roofs?
You’re already a hero at your job or you probably wouldn’t be reading this blog. Now you need to make your investing for retirement strategy heroic as well. Try this. You may have a large part of your savings tied up in the stock market. It might not be a great idea to rip it all out and plow it into the first income property you can get your hands on, but at least start thinking in that direction. For reasons we’ve discussed previously, the stock market isn’t what it used to be. The people making returns worth talking about are brokers and people like Warren Buffett, who can move a company’s stock price significantly by the sheer weight of his buy.
Discretionary billions probably doesn’t describe you. That’s okay. Maybe it will some day. What you should be looking for is an investment where returns are measured in numbers north of 30% annually rather than south of 10%, namely, income property. Why does this real estate strategy work so much better than every other form of investing on the face of the planet (except for Ponzi schemes and hedge fund trading, of course)? It thrives on a little concept known as leverage, which those with stock market or Forex experience might shrink from. Not to fear. When used correctly by tying a long-term, fixed-rate mortgage to a piece of property which you can turn around and rent out, it’s actually a pretty conservative approach and, in our humble opinion, has less chance of blowing up in your face than a Wall Street “asset.”
We wouldn’t be so silly as to suggest you run out and buy one today, but if it’s financial independence you want, we can show you where to find it.
The Heroic Investing Team
Flickr / CavinB
Tags: investing for retirement