Do you think you’ll ever be able to retire? Its possible, but with dignity and wealth? I fear most won’t. Part 1.Part 2 – Take your first step
A recent statistics Canada report highlighted that for ever $1 dollar of income we earn, we own $1.67. Thats mortgages, credit cards and loans. Thats insane! Now where does retirement planning fit into there? How is it possible to fund a retirement when you owe almost twice as much per month as you make?
There are 3 categories of people.
1. People who will rely on the government. I think there are more people in this camp than any other. My guess is that 80% of people under the age of 45 fit into this category. The government can’t manage their own affairs, what makes you think they will be able to manage yours?
2. Unionized and civil servants who have defined pension plans. The recent transit strike highlights how fearful people are about retiring without that fat pension to keep them afloat.
3. Those who took responsibility for their retirement dreams and owned every opportunity to ensure dignity and wealth would be attainable in retirement. This is where income producing real estate comes into play.
Where do you fit? I personally am going to use income producing real estate to fund my retirement. I don’t believe for a second I can count on the government to take care of my most basic needs, let alone give me some dignity financially.
How it works.
You have 2 options. You could put money its a mutual fund where if your lucky you’ll see a 3% return. So unless you have $1000’s/month to contribute? You’re out of luck with that option.
That leaves us with rental income. Simply put, buy a rental house, have your tenants pay down and eventually pay off the mortgage and live off of the monthly cashflow. (READ PART 2 to get started)
Here is a typical example. 1000 sqft bungalow with 3 bedrooms up and a 2 bedroom basement suite. Rents are $1500 and $1000. $2500 total. Your monthly obligations would be $1,200/mortgage, $300/property taxes, $300 utilities. Budget another $100/month for contingencies and you end up with $600/ month positive cash flow. I know what you’re thinking, wow and extra $600/month. Heres a couple points. First of all that is on top of other retirement savings. Second once your tenants pay off the mortgage that turns into $1,800/month. Use smart leverage and increase that to 3 properties thats $5,400/month. Start early enough and set a goal for 12 properties. Thats 1 yearly cashflow/property a month=$1800×12=$21,600/month now x 12 properties = $260,000 a year in positive cashflow.
Find me an RRSP or mutual fund that will produce that!
Where are you getting your advice from? I walk the walk with a growing revenue portfolio. If you want to see how easy it is to retire with dignity and true wealth give me a call. There is no obligation. I would be happy to explain how you too can create wealth and prosperity for generations. Generational, indestructible wealth. Part 2, action steps.
Scott Ziegler – Remax Saskatoon