Retirement income generation (RE and Others)

[TexasHusker]

Your constant bashing of traditional investing is really getting old.
Just because most folks don't do it your way doesn't mean we don't know what the hell we're doing.

My post wasn't a knock on traditional investing my friend. It was a knock on the scumbag purveyors occupying much of that space: Edward Jones, Merrill Lynch, Goldman Sachs, etc.

[TexasHusker]

Of course it's not that easy.

Plus owning real estate is a lot more hands-on than traditional investing. Sorry but I have no desire to have to deal with or worry about tenants, get calls when things aren't working, or have to find myself a competent property manager. That surely not my vision of retirement.

The one thing that the real estate investors here don't seem to grasp is that not everyone is interested in doing it no matter what the financial benefit might be.

I'd rather have some control over my investments, versus some goof ball fund manager who is more worried about scoring his $5 million bonus. If you think he cares about your retirement, you're nuts. Come the next bear market, you'll see what I mean.

[disneysteve]

I'd rather have some control over my investments, versus some goof ball fund manager who is more worried about scoring his $5 million bonus. If you think he cares about your retirement, you're nuts. Come the next bear market, you'll see what I mean.

And that's why index funds are so popular.

[disneysteve]

My post wasn't a knock on traditional investing my friend. It was a knock on the scumbag purveyors occupying much of that space: Edward Jones, Merrill Lynch, Goldman Sachs, etc.

Ah. That's not how it came across. Sorry about that.

[GoodSteward]

I'd rather have some control over my investments, versus some goof ball fund manager who is more worried about scoring his $5 million bonus. If you think he cares about your retirement, you're nuts. Come the next bear market, you'll see what I mean.

I have a lot going on in my life with everything I have to see about, and that is why I gave up working with a financial company that sold the solutions people needed, not just tell them about it(life insurance, investments, health, auto, etc). I believed in their cause, but I'm too busy and it put too much strain on my marriage because I was having to go to people after hours. Because I'm already mentally tied up, I also try to keep my retirement simple. I think it's great what you have been able to do, and I wish could do that too. I just don't have the capital, and I don't have the time to make that capital. Maybe in another 20 years.

A lot of people don't want to bother with figuring it out. Not everybody is entrepreneur minded like yourself, and not everybody is comfortable investing on their own in index funds either. For those people, mutual funds are the answer and the people who help direct it. Sadly many are bad, but not all.

[disneysteve]

not everybody is comfortable investing on their own in index funds either. For those people, mutual funds are the answer and the people who help direct it.

I think this is an extremely poor excuse. If someone just splits their money 3 ways into a Total US Stock Market Index, Total US Bond Market Index, and Total International Stock Market Index, they are going to outperform an active manager 90-100% of the time at a much lower cost. You don't need a finance degree to do that.

[DaveInPgh]

I think this is an extremely poor excuse. If someone just splits their money 3 ways into a Total US Stock Market Index, Total US Bond Market Index, and Total International Stock Market Index, they are going to outperform an active manager 90-100% of the time at a much lower cost. You don't need a finance degree to do that.

Steve, it is a perfectly valid excuse. Although a finance degree is not needed, some level of financial literacy is. Sadly there are many thousands that are lacking in that area.

Of my 3 siblings, 2 of them wouldn't have any clue what you just said. The other would have a general idea, but still not enough to make decisions without some guidance.

[disneysteve]

Steve, it is a perfectly valid excuse. Although a finance degree is not needed, some level of financial literacy is. Sadly there are many thousands that are lacking in that area.

Of my 3 siblings, 2 of them wouldn't have any clue what you just said. The other would have a general idea, but still not enough to make decisions without some guidance.

But would those same people feel comfortable hiring a financial advisor to invest for them?

Saying it was a poor excuse wasn't really the right wording. I guess lots of people invest via a broker/salesman without having a frigging clue what the heck they are getting involved in. They probably go to some "free" seminar and then just sign on the dotted line and hand over their money. It's pretty sad really, considering how incredibly easy it is to do it yourself with better results.

[DaveInPgh]

But would those same people feel comfortable hiring a financial advisor to invest for them?

Yes. And it has nothing to do with a Financial Advisor's ability to manage someone's money. Instead, it is their ability to gain someone's trust.

[DaveInPgh]

Saying it was a poor excuse wasn't really the right wording. I guess lots of people invest via a broker/salesman without having a frigging clue what the heck they are getting involved in. They probably go to some "free" seminar and then just sign on the dotted line and hand over their money. It's pretty sad really, considering how incredibly easy it is to do it yourself with better results.

It is really sad. Personal finance should be taught in our schools.

[Atretes1]

I am 40 now. If I stay where I am at now I will have a decent pension at 55. I have also started buying RE. I have 1 rental now and hope to have 5 or 6 paid for by the time I am 55. I will use my pension and RE returns for an early retirement at 55. I am also saving 15% or more in a Roth. If all goes well I may never need to touch my ROTH.

[LivingAlmostLarge]

Most people don't have other sources of income in retirement.

If you have the money to invest in the market, you have the money to invest in other things, just takes some effort.

Actually yes but how long will it take me to if I divert my savings to that? How long will it take me to save up a DP for a RE investment? Then save up for 6 month Business EF? How long will it take if I save $500/month? And I need say 20k? That's low end right? 40 months so over 3 years to get into RE.

That's the activation energy for me honestly. That I'm going to divert money being invested monthly and instead park it in cash for 3+ years then get into RE. Then should i try to time the RE market? What happens if I buy on the peak?

Also what if $20k isn't enough? What if I need more to get into it? Or what if I need repairs or non-payment and have to carry my RE investments more than 6 months without a tenant because my tenant starts to squat and not pay? Or I have to hire a lawyer to evict? It's a lot of cash up front.

Of course I could always get into RE investment without any cash for DP or EF separate from my own personal EF.

That's my worry.

[Fishindude77]

If there's a will, there's a way.
If you have no will (desire or interest), it isn't ever going to happen and that's OK, just be content with what you are presently doing.

My primary beef with investing too heavy in the market is that I am blindly trusting a company like Vanguard to look after my best interest and my money. I've never met or seen these people, and I'm just another account number to them. There is no guarantee it will work out, I'm just counting on past history to repeat itself. Nothing wrong with diversity and having some of your $$ there, but I'd rather have a bit more control over most of my money, monitor it more closely, and work to assure success.

[Outdoorsygal]

That is what keeps making me flip flop on even renting the one I'm in if I ever move. I have family who've had problems trying to do that and it was more headache than it was worth. Some do well, some do not. It will take a lot of years to work up enough to even know if it was worth it for me, so I just use the market instead. It's more likely to succeed without the overhead, even if the gains are not as good. If I had more capital I could afford to use I would try it. I just don't has no moneies for it. If the right opportunity came along I would like to at least try it one day.

You might be able to do it if you go in on it $$ with a friend.
There is a tax sale coming up in our county. Bidding starts at the price of the unpaid loan. We haven't decided yet whether to take the plunge and bid but know our funds are very limited so will only do it with an attorney friend. Otherwise we would not do it but he assures us he'll handle getting them out of the home via eviction and we can do the more hands on stuff since my husband is a Contractor. Doubtful we are going to get anything for as dirt cheap as we all want it but we'll see.

[GoodSteward]

You might be able to do it if you go in on it $$ with a friend.

It's an idea, but one I often hear on Dave Ramsey as a bad one. I have also heard of people doing well, especially on a vacation home that is rented out like time share. I guess we'll see if I ever get the opportunity.

But would those same people feel comfortable hiring a financial advisor to invest for them?

Saying it was a poor excuse wasn't really the right wording. I guess lots of people invest via a broker/salesman without having a frigging clue what the heck they are getting involved in. They probably go to some "free" seminar and then just sign on the dotted line and hand over their money. It's pretty sad really, considering how incredibly easy it is to do it yourself with better results.

Let me start by stating I agree that more people should know what they are doing because there are a lot of salesman taking advantage of people, and selling products that are terrible for the customer. With that being said, this is one of those areas that I have fought with back and forth. I am technically still signed up(but no longer active) with a company that does financial advisement. I don't have the official certification so I can't legally say I am a financial adviser, but it's what we do. We take people's information and give a free financial analysis showing what life insurance coverage they need, how to snowball the most effective way, and how to retire at whatever income they requested per year. Something you might pay up to 2 grand for from a private fee-based adviser. From there, we offered solutions for it all. Life, retirement, etc. Knowing what I do know about index funds, investment fees, etc I had the hardest time suggesting the mutual funds they offered. It's not that the fee's are high per say, it's that there were fees at all. I never did get my securities license, but still argued this a lot. What I finally had to realize is that, just like a doctor, the information is enough to have value to someone who doesn't have it. Not everybody, well, in fact not hardly anybody will do what we all do. Find the information, and work it ourselves. Just like most people will not self-medicate, or try to work on their own body. To you and I it seems silly to not use an index fund because we know. To someone who has 0 savings and no clue where to go, a small(presumably) fee is nothing in comparison to having your entire future changed. Also, a lot of people are glad to pay to not have to worry about it. This is a sore spot for financial sites(I have discussed this before on another site I used to be on) because the people on them are typically financially literate. If we were all financial advisers we would all be glad to recommend mutual funds because it was how we made a living, but we are not. We are self-motivated financial enthusiasts. Most of America isn't, and even if they are at least a little they are still not comfortable trying to tackle it all on their own.