10 Ways Real Estate Investors Can Ensure An Abundant Retirement

Posted @ 6:06 pm - Filed under 1031 Exchanges, Real Estate Investing, Purposeful Planning, Financing, Cash Flow, Retirement Income, 401(k)'s & IRA's, Sominex Account, Market Correction, Leverage, Depreciation

1. The average working man at 58 years old has less than $60,000 saved or in a qualified retirement plan. (401(k)) If that describes you — give serious thought to modifying your approach. Your retirement will be abundant for about 1-2 years at best. Captain Obvious penned this one.

2. If you think saving $1 Million and paying off your home is the key to your dream retirement — think again. Using smaller numbers, that’s what Grandpa thought too. How’d it work out for him? Right.

3. Stop putting the bulk of the capital invested for retirement in vehicles geared to generate nakedly taxable income. Why would you do that on purpose, if there’s an alternative? Think after tax.

4. If your area sports median home prices of $300,000 or more — think twice about investing there — then don’t do it. More simply put — there are many superior locations in which to invest your capital.

5. In the name of all that’s rational — I beg you, please — get your mind off current cash flow, and on to capital growth. There’s an 80% chance you’re making less money at your job now, than you’ll ever make again. Investing for cash flow now, will cost you thousands a month in cash flow at retirement. Ignoring this axiom will most likely turn your dream retirement into a nightmarish life sentence.

6. Bawldguy Axiom — Leverage, financing, tax deferred exchanges, cost segregation studies, and all the other so-called sexy players on your team — are just that — players. They’re meant to work in concert with each other. Yeah, the star running back scores all the touchdowns — but let’s see him do it without his offensive line.

7. Be F-L-E-X-I-B-L-E — things change. If you either don’t recognize it, or refuse to adjust, you’ll be cookin’ your own goose. One example? San Diego investors who stubbornly remain there, even though they know in their heart of hearts, only an amateur investor would now buy their small unit properties. I personally know several who have literally cost themselves seven figures due to their inability to modify their Plan in the face of paradigm shifts in market reality.

8. When the market turns against you — relax — it’s not personal — and certainly not permanent. Just like the folks who foolishly thought magical appreciation would continue forever — there are investors thinking this correction is the end of capital growth for the foreseeable future. Geez Louise Myrtle. Can we all remember R-T-C? Oh yeah — the most recent correction (S & L Crisis) makes this one look like a birthday party at Chuck E. Cheese’s. The chart — it goes up — it goes down.

9. BawldGuy Axiom #1 — Have a Purposeful Plan. Trust me — there is no magic pill for investment success. Real estate investors who like to fly by the seat of their pants, just don’t do as well — period. A Plan will keep you focused like a laser beam — allow needed flexibility — and often times result in easier decisions at crucial times.

10. Know the difference between a bold, risk-taking real estate investor — and a well informed, professionally advised investor — with a Plan. The difference over the long haul is literally measured in orders of magnitude. There’s nothing impressive about a courageous investor going down in flames because they were woefully uninformed and/or without a prudent Plan. The real estate investor who knows the difference, will be prepared for the down times, and take much better advantage of the good times.

11. Bonus — BawldGuy Axiom — No exceptions. No matter how prudent you are, no matter how much it appears to be smooth going — Murphy knows who you are, and where you live. Cash reserves frustrate Murphy no end. Also? You’ll sleep better when he decides it’s your turn in the barrel — and sooner or later your turn will come.

In the past, I’ve not been much of a list guy. If you digest these 10 concepts — you’ll do a whole lot better than if you don’t.

If you’re over 40? Time isn’t on your side — what will your retirement look like if you keep doin’ what yer doin’?

Over 50?

You need to saddle up yesterday afternoon around 4:30, and start galloping — yer playin’ catch-up. If getting to retirement in excellent shape is a horse race — please understand — your horse isn’t in the race at this point. Each real estate investor has their own race to an abundant retirement. There’s a reason to act with a sense of urgency.

Where’s your horse in the race to retirement?

This entry was posted on Sunday, September 30th, 2007 at 6:06 pm and is filed under 1031 Exchanges, Real Estate Investing, Purposeful Planning, Financing, Cash Flow, Retirement Income, 401(k)'s & IRA's, Sominex Account, Market Correction, Leverage, Depreciation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.