Not as Flush As You Think

You've got $500,000 in liquid assets for your retirement and you're still 15 years away.  All your bills are paid;  have a small mortgage on your home; cars are paid for and great credit.  You're planning on sailing into retirement...or maybe not.

If you want to retire with $100,000 income in today's dollars and expect to live for 25 years after retirement, you'll need to have a net worth of $2,267,130 at retirement age not counting what Social Security may provide.  Your $500,000 will grow to $813,720 in 15 years which will leave you almost $1.5 million short.  You'll need to save $76,442 each year for the next 15 years.

Is this surprising?  Did you even imagine that you were that far away from where you need to be?  It might be a staggering amount to save each year but there is another way...investing.  Probably not in a 5 year certificate of deposit that earns 2.25% or a volatile stock market that seems to go up or down without logic.

Real estate over the long term has proven to be a solid, predictable investment.  With the price corrections in the last three years combined with today's low interest rates make housing very affordable.  Rents are going up in many markets and owning rental property is very attractive.

Step one is to buy your own home and then, start aquiring good rental properties.  A successful strategy includes average price range or lower, in average condition, in predominantly owner-occupied neighborhoods.  Rental homes are more more attractive than alternative investments because they provide high loan-to-value mortgages at fixed rates for 30 years on appreciating assets with tax advantages and reasonable control.

If you would like to learn more about the details of real estate investing, please contact me at (713) 515-2135 or Valery@ValsTheKey.com.