First... get a million dollars...
Posted on 10/29/2019 8:32:13 AM PDT by SeekAndFind
Valuations above average vs below. Generally, we all have a sense of a late cycle market, like now... can continue to grow but will boost valuations in doing so and increase risks. On the flip side, having what you need coming out of the next recession would be a sweet spot.
Here’s what I do, and my inside recommendation for everyone here who has $10,000 or more in liquid stocks or, worse, a bank!
Find a local Real Estate Investor club. Commit to three months of going to meetings and get to know the investors who “fix and flip”. Tell the ones (who you get a good read on) that you are a “Private Money Lender who lends $10k or more in 2nd lien position”. Ask them for a Credibility Packet on past projects showing how they succeeded in making their investors money!
Here’s how it works: you lend money to a flipper asking for a promissory note and deed of trust secured by the property in 2nd lien position. Ask for 12% to 14% per annum (year). Now, most Investor flippers will only use your money for 6 months. You get your money back at closing when they sell the property! You get paid before they do and with very little risk, since it’s secured by the asset that they bought at a wholesale rate. Hell, the investor flipper could die but you’ll have control of a property with the 1st lien lender!
After the first successful flip, it becomes addicting and fun! Your money is then compounding two or more times per year as you continually invest in real estate flippers!
The only downside is that your money is tied up in property until it sells (in 3 to 6 months), so don’t do it if it’s your emergency funds!
Make it a goal to commit to finding a few quality investors in your area and they’ll explain the details to you. Just always use a title company or title attorney and never give money directly to ANY investor flipper. Your funds must be controlled by a third party AND secured by the property itself! After a few years, you’ll be investing in 1st lien position!
I was referring to the earnings level considered “normal” by the author, not total assets for crying out loud.
SHEESH, some folks are easily triggered! LOL
No
If you’re earning $115K/year and have a net worth of only $1M, you’re an idiot. You’ve frittered away a fortune by keeping up with the Jones’.
As I said, I was using the author’s chosen income level, not overall net worth.
I see no option for large amounts of hookers and coke. My guess is a shorter time frame for that.
bkmk
MichiganCheese wrote: “The Marxists like the fake Indian want to confiscate your wealth. Whatever you have will not last as long as it should.”
No the ‘fake indian’ wants to make you invest in government approved annuities. All in your best interests, of course.
So first year you'll live on $40K, then the next year it'll be about $42,400, etc.
If you have a bad investment year then don't give yourself a "paycut" (4% of the lower balance). Withdraw the same amount you withdrew the prior year. Withdraw from the funds that are high (I invest in over 20 different growth funds in different sectors and different regions). If none of them are high withdraw from the "safe" funds (money markets, short term corp. bonds, LT corp. bonds, ST and LT treasury funds).
If you've paid off all your debts, including mortgage, and live on a budget, you can live off $40K the first year and $42K the next year. At least in low cost of living Alabama.
That’s right. Restoring vehicles is expensive.
You must do that.
You should have written the article. Any writer who doesn’t consider that you will have paid off your mortgage by 65 and that your living expenses will go down and that social security kicks in along with Medicare is ignoring facts.
I retired at 69 6 years ago and now have a net worth much higher than when I was 65.
I wish FR had an up arrow. You would get one from me.
Many people retire with an annuity, their SS and the contents of their 401K/IRA. The annuity seems to be ignored by most planners in this type of article.
What $1 million? I’m so confused.
I try to fix them up. Restoration is a bit beyond my capabilities.
The Investors.com article uses a low value for the Social Security benefit for someone who is earning at that level by the time they retire.
The figure of over 5% return on a portfolio seems high with today’s interest rates. It may be based on history, but the economy has changed! I don’t expect more that 4% return.
Even at their somewhat low $30,000 for Social Security benefit, those who are married will have a spouse who can also draw half of their benefit even if the spouse has never worked. Thus, the annual benefit for a couple would be $45,000.
In general, if you are currently earning at the $100K level and if you hope to not draw down on your nest egg for your expected lifetime, then the rule of thumb is that you need to be closer to $2 million than $1 million by the time you retire.
Bump for later...
Our CFP says we can retire now, we are in our late 50’s but everyone on both sides of our families live to 95-100 with n o problem. Worried about running out of money and we have no kids to take care of us
We know another 2008 collapse is coming but worse so we continue working.
First... get a million dollars...
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