Like most things in life, there is more than one way to look at a subject. When it comes to finances and retirement savings, there is scarcity thinking and there is abundance thinking.
An entire financial industry has been built around the tenants of scarcity thinking. Financial advisors make large commissions convincing the masses to work hard, live below their means, and sock away as much money as they can in stocks, bonds, and mutual funds.
Once retired, these same individuals are to whittle away their savings via some formula like the 4% rule in the hopes that they will die before their money runs out.
This plan may be right for some, but it certainly isn’t right for me. I have no intention of cutting coupons or pinching my pennies in retirement. I want to enjoy my golden years and not obsess about stretching every dollar so that I don’t out live my money.
With anemic market returns, economic uncertainty, higher taxes, and looming inflation many of these scarcity thinkers are feeling the pinch. Delaying retirement and down grading their lifestyle has become viable options for coping with the realities of today. Unfortunately, these people are focusing too much on growth while ignoring the subject of income (yield).
The wealthiest individuals in the world are abundance thinkers. They know how to expand their means in retirement and create a legacy for their heirs. They know that growth is important, but cash is king. They create renewable income streams through business and real estate that sustain their lifestyle. These streams of income allow them to travel the world and enjoy the finer things in life without ever having to touch their net worth.
They are not whittling down their life savings trying to figure out how to die before they run out of money. You don’t have to either. You can actually grow your net worth, expand your means, and create a legacy for your children and grandchildren.
Business and real estate has long been the playground of the rich. In fact, the vast majorities of the Forbes 400 of wealthiest people have either made or retained their wealth in real estate. Not in a REIT or some other instrument that makes the financial industry money in commissions. Actual physical real estate is a time tested wealth generating tool like no other.
In the past, multimillion dollar commercial multifamily real estate was only available to very wealthy individuals and institutional players. Residential real estate (1 – 4 units) was left for enterprising affluent individuals willing to tolerate unpredictable cash-flow and management headaches. Direct fractional investing has changed all of that. Now affluent doctors, dentists, and other health care professionals can take advantage of all of the benefits of direct real estate investing in these multimillion dollar properties without ever having to become a landlord.
This type of investing has been providing me income streams for years. Now I work part time and look forward to the day in which my earned income as a physician is replaced and even surpassed by my income from my investments. That is the difference between working hard for your money and having your money work hard for you. I’m going to continue to expand my means, enjoy my life, and leave a legacy for my family. Abundance is an amazing thing.
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Super advice. I have one property, a four plex. As a radiologist, I would love to hear more about your strategy and insight.
Kindly email me.
Ken Mask
Hello Ken,
Thank you for the comment. I started in residential (1-4 units). My biggest regret was that I didn’t switch sooner to commercial multifamily. Residential does not have the economies of scale needed for larger more predictable cash-flow. Additionally, it is difficult dealing with the residential market cycle, comparison appraisal model, and the other negatives that go along with residential.
The true wealth building power of residential is in getting several properties and paying off the mortgage. That usually means waiting 30 years. If you buy enough, and pay off the mortgage, it is possible to replace your income in retirement with the rents. I don’t plan on working another 30 years in medicine, so I had to go bigger.
Super advice. I have one property, a four plex. As a radiologist, I would love to hear more about your strategy and insight.
Kindly email me.
Ken Mask