Be Sure That Your Retirement Income Will Last Longer Than You Need it to.

 Imagine with me, you have worked for 30+ years and diligently saved money in your 401k. You have accumulated a decent portfolio of stocks, bonds, and mutual funds. Today is your retirement party and you are looking forward to the next chapter of your life.

 But what happens tomorrow? The usual paycheck that you have had for over 30 years stops. In order to maintain your lifestyle, you must now withdraw money from your 401k, but every time you do, the money pot shrinks. How can you be sure you won’t empty the pot during your lifetime?

 Now, let’s pretend that during your employment, you leveraged your money.

 The rich don’t work for money. They make their money work for them.

      – Robert Kiyosaki

Three Types of Income

Most people’s income is active, but wealthy people typically earn Residual or Passive income (or both!).

Active Income
Active income is from your employer and requires activity in exchange for money. When you stop, the income stops.

Residual Income
Residual income means you receive money after the work is done. For example, every book an author sells provides residual income.

Passive Income
Passive income is earned with little effort and continues flowing even when you aren’t working.
Real estate investments are one of the most stable sources of passive income.

Remember the Retirement scenario? Let’s pretend you’d built passive income, on the side, during employment.

When you retire, your earnings decreased by your monthly salary amount, but you still have income.
Financial freedom is achieved when your earned passive income exceeds your financial needs.

Investing in Stocks vs. Real Estate

 Historically, the stock market has returned about 8% annually, which means $100,000 would produce roughly $8,000 per year. That’s $667 per month.

To replace an income of $3,000 per month, you’d need $36,000 per year, which would be 8% of $450,000.

But what about the down years. When the stock market makes less than 8% or even loses money? What happens if you have 2 or more down years in a row?

However, with real estate, $100,000 could buy a $400,000 rental home. How?

The bank brings $300,000 to the table.

You put in 25%, the bank puts in 75%, and you earn 100% of the profits.

A $400,000 home renting for $3,600 with a mortgage of $2,100 would net you $1,500 per month. Theoretically, 2 investments of this size could replace a $3,000 monthly income.

The total rental income plus $12,000 in additional equity (based on 3% annual appreciation) equals $30,000, or 30% return in just one year.

But I Don’t Want to Be a Landlord!

The numbers look enticing but being a landlord does not. Who wants to deal with tenants, termites, and toilets? This is where, instead, you join a small team to acquire real estate.

When investing $100,000 in a real estate joint venture, it’s feasible to earn 10% or $10,000 per year. 25% better than the average stock market return without the volatility or brokerage fees, and best of all, your initial pot of money does not shrink.

It is never too late. At First Floor Equity our number one goal is helping you build the stable retirement that you have worked so hard for.

Join The First Floor Equity Investor Club today to learn more about our unique investment opportunities.  You can even use your 401k funds to get started. Let us show you how.