Dear FutureMoneyTrends.com Member,
The name of the game is income. This is why millions of baby boomers are stuck at their jobs right now. In a low-yield environment, fixed-income investors and savers are in a crux.
CDs, bonds, and traditional income investments aren’t delivering, which has forced many into an inflated stock market seeking yield. A real plan for retirement is simple: build up a lifestyle of cash-flow. Turn as many dollar bills you can into passive income slaves.
Here are our 3 favorite income strategies today.
Income Strategy 1 – Residential real estate. The landlord business model is simple and easy to understand. Everyone needs a home, and they are willing to pay for it.
Buy middle-class homes, and treat your tenants like they are a guest at a Marriot. If you want great tenants and cash-flow, then treat your rental for what it is: it’s a business that provides a service, and that service is housing.
Avoid high-return ghetto areas; it’s an income trap, and you’ll lose money. Expect at least a 10% yield when investing in single-family homes. For more on this strategy, please read our Cash Flow for Life Letters.
Income Strategy 2 – Set up a whole life insurance policy. Tell the agent you care nothing about life insurance and you are only concerned about the growth of your cash value.
For most agents, they will be clueless, probably hate whole life, and won’t understand what you are trying to do. I would recommend you listen to my interview with Pamela Yellen, author of Bank on Yourself.
Mutual insurance companies are some of the oldest businesses on the planet, and the ones that manage whole life polices haven’t missed any dividend payments for the past 150+ years.
This is an income strategy that also has significant tax benefits, and essentially allows you to withdraw your money through policy loans at a zero-percent tax rate.
Income Strategy 3 – Loaning money. The richest entities on earth lend money to risk-worthy borrowers.
You can go the route of loaning money to a government or Fortune 500 company. Or you can go directly to the market place through peer-to-peer lending and see returns from 5 to 8%, conservatively.
1st Trust deeds can also be invested in and should be, either by putting your money in a pool with other investors or writing a check. Having loans out with property backing it is a must when it comes to building up your income.
Summary: Income should not be looked at as part of a balanced portfolio; income should be the portfolio. If you’ve ever wanted to invest like the rich, this is it: focus on income and compound your wealth.
Never confuse speculating on capital appreciation with an income-producing asset. Yes, there is a role for speculation, but it should be completely separate from your overall wealth-building strategy, which is essentially growing your income to a level that fits your desired lifestyle.