What Are Your Retirement Goals? A Case For Real Estate And Alternative Investment

Most financial advisors would have you believe that when planning for your retirement,
the goal and the inevitable outcome is subsistence solely on the savings you have
accumulated until the point of your exiting the work force. The reason they try to sell
this strategy of mere sustainability is because the investments types they put forth–such
as mutual funds, life insurance products, stock and bond portfolios, etc.–are typically
the ones on which they stand to earn a commission. This designated route barely
stands to keep up with inflation, let alone build long-term wealth and consistently pay for
living expenses. That being said, the goal should be to NEVER worry about having
enough money during your later years, but to see investments comfortably cover
expenses while exceeding inflation, all WITHOUT depleting your savings and principal
balances in your retirement account.

Think always of working to perpetuate and not simply to preserve. This means having
your money continue to work for you, such that perhaps even your heirs will have
residual wealth to use towards their own retirement. Investing in real estate allows you
to obtain this goal because it produces above-inflationary returns and can grow your
wealth in multiple ways.

First, real estate produces positive cash flow after monthly expenses. After the
mortgage payment, property taxes, insurance, repairs, and property management, you
can still make 7% – 12% and more on your down payment. Using a loan from a bank or
private financing institution to leverage your investment can help you see even higher
returns on your money.

Second, depreciation benefits obtained from owning real estate can significantly reduce
the amount of taxes owed on the rental income earned. Reducing taxes is imperative to
wealth building since it is your biggest expense in life.

Third, properties purchased below market value come with built in equity, allowing for
immediate profit. No stock allows for this same benefit, which comes in addition to
possible future appreciation of the propertyʼs market value.

Fourth, if you purchase a property using a bank and put 20% – 25% down on the
investment, you can pay down the loan every year, giving you one more profit center
when investing in real estate.

The fifth, and most important advantage of investing in real estate is that you have
control over your investment where other types often delegate it to another outside
party. Buying a property and buying correctly puts the power of controlling cash flow in
your hands. Furthermore, you have control over your exit strategy and you have
collateral–in the form of a hard asset–for your investment.

With all of these benefits of investing in real estate, itʼs a no-brainer that you should
include real estate as a large part of your retirement portfolio.