A Real Estate Investment After 20 Years; Was it Worth It?
Next month marks the 20 year anniversary of the purchase of my first long-term real estate investment. In this post I thought it might be instructive to describe the actual transaction I made 20 years ago, the major events during the life of this investment, and the financial benefits my wife and I enjoy today. The reason I think this may be helpful is I will talk about some of the decisions I made as well as the aggravations I experienced along the way. For a new real estate investor it is important to be able to see the end game to keep yourself motivated when you encounter the inevitable frustrations. Also going over some of the important events of this investment will shed some light on some of the choices my wife and I made over the years and the impact it had on our lives. You can decide for yourself whether the investment was worth the time and money.
Paying for Investment Advice
Generally, I believe the average person does not need to pay for any investment advisory services to achieve their retirement goals. The most important steps to reach your retirement goals is to be disciplined in your saving and investing over a long period of time as discussed in the posts in this blog. However, some people want to have another opinion before making an investment. I can understand this feeling. When so much about investing is uncertain, sometimes it is comforting to know that there are professional people who see the markets and/or individual investments the same way you do.
Is Your Bank and Your Insurance Company Financially Healthy?
If you remember back a few years ago, the three large credit rating agencies, S&P, Moody’s, and Fitch, completely missed the 2008-2009 financial crisis. They each gave several companies investment-grade credit ratings just a few months before they went bankrupt. The most famous “rating miss” was a “AAA rating” that one of the agencies’ still had for AIG the day they went belly up and were bailed out by the federal government.
Fixed Income Ladder Revisited
I wrote in an earlier post that people who are at the door step of retirement should fund the early years by setting up a fixed income ladder. Click here to read my previous post on this subject. In this earlier post I talked about how I use bank Certificate of Deposits (CDs) as the debt instrument to set up my 10-year income ladder. I got an enquiry from a reader saying his financial institution only offers CDs up to 5-year maturities. He was interested in setting up an 8-year CD ladder and wanted to know how to set up the last 3 years of the ladder.
When will the Secular Bear Market End?
The US stock market has been in a secular bear market since 2000. It will be difficult to make any money in stocks until this long term bear market ends. So, the question is when will the secular bear market we are currently experiencing end?
What assets should be placed in which retirement accounts
In my previous post I discussed about how I would prioritize my retirement savings. I suggested it would be prudent to invest in retirement accounts over time, with the goal of creating tax diversity. That is, by having funds in tax deferred, tax free, and taxable accounts. In this post I’ll discuss what type of assets should be purchased in these different retirement accounts.
Pay Down Debt or Increase Savings
A friend of mine who is early in his career recently told me that he had finally paid off his car. He wanted to know whether he should use his newly available cash flow to pay down other outstanding debt or use the funds to increase his retirement savings. This is a good question. In this post I will provide my thoughts on this topic.
Replenishing the First Bucket
In a recent post I discussed the importance of setting up a fixed income ladder as your first bucket of the Buckets Strategy. As a follow up to that concept, I would like to introduce another skill that a retiree managing his own portfolio for income should know. That is when you should sell your equity funds to replenish the first bucket to maintain your annual income. In this post I will introduce you to a free online tool that will help you develop this skill.
Should You Use a Financial Advisor
I am often asked if I use a financial advisor. Financial advisors can be very helpful. In this post I will give my thoughts on whether you should use a financial advisor.
Equity Allocation Revisited
I have written often in this blog how one of the most important investment decisions you must make is selecting your appropriate equity allocation for your retirement portfolio. In my discussions on this topic, I have referenced a simple equity allocation guideline, “100 minus your age,” people can use that I first explained in this post. Recently, a friend told me they read an article by a financial planner recommending that this guideline should be changed to 110 or 120 minus your age. My friend wanted to know whether I agreed with this change.