10 Ways To Delay Or Diminish Your Retirement

BawldGuy Axiom: When the farmer plants corn in the spring after proper preparation, tends his fields diligently, fertilizes as needed, and adjusts to any bumps in the road, he’s not surprised when he’s harvesting corn in the fall.

A robust harvest was his end game. He had a Plan — executed it — adjusted to any unscheduled visits by Murphy, Though probably not the perfect analogy, it gets the message across.

Here are 10 ways folks investing in real estate for retirement can delay and/or diminish their retirement.

1. Start your journey without having a Purposeful Plan.

2. Notice having a Plan by itself won’t cut it. You must then execute it on Purpose. Doing things on purpose via your Plan improves your odds of retiring when you want, and how you want. Going from flower to flower like a bee won’t make it. Unlike flowers, investment strategies aren’t the same — they don’t all yield pollen.

3. Before you start anything, know where you are now, today. Wanna vacation in San Diego? Great goal. Those starting from Palo Alto, CA will take a far different route than those setting out from Olathe, KS. You’re gonna have a problem gettin’ to your Point B if you don’t have intimate knowledge of from where your trip is beginning.

4. This one is mucho importante. Assume there are questions you have no clue to ask, meaning of course, that you can’t possibly have the answers. Those answers will almost always bite you where you sit — either by costing you money, or severely limiting what you coulda, woulda, shoulda made if you’d only known that one itty bitty fact.

5. Excluding the effect of taxes and/or tax shelter from your core strategy is almost guaranteed to cause measurable damage. This means ongoing strategies for the present and future use of depreciation. Dealin’ with capital gains — will you make use of Section 1031 of the IRC, or develop other strategies? Will you end up with the paradox in which so many find themselves these days, living a good news/bad news joke? The good news — boatloads of retirement income. The bad news — little if any of that income is tax sheltered — or ever will be.

6. Your investments are geographically bound — that is, you refuse to own anything you can’t drive by at any time. Ask those in San Diego how that’s workin’ out for them lately. When acquiring income property located in other states is as easy as it is today, it makes no sense whatsoever to restrict yourself to locally inferior investments. Face it, your ability to drive by part of your ‘empire’ isn’t worth the $3,000 a month in retirement income local stuff may be costing you.

7. You haven’t created in your Plan a separate basket for income unrelated to real estate — preferably tax free income. A stand-alone source of tax free income, not reliant upon your real estate investments will be one of your best moves. Income from real estate is great, and should be tax sheltered to a great degree, but I’ve yet to run into anyone who’d turn down additional income — especially of the tax free variety.

8. Understanding retirement income should be as large as you can make it is one thing. Not including prudent timing in your Plan as it relates to both the income and tax shelter for that income can be very disheartening when Retirement Day arrives. Remember — we go on cruises with after tax income.

9. The investor who doesn’t incorporate a humungous dose of flexibility into their Plan, will not be able to adapt when outside circumstances call for it. Remember, Murphy knows where we all live, and sooner or later it’ll be your turn in his barrel. Oh, and don’t forget O’Toole’s corollary to Murphy’s Law: “Murphy was an optimist.”

10. Always hafta have the best deal. The guy across the table hasta lose in order for it to be a good deal for ya. That’s one of the best ways of gettin’ nowhere fast. Remember the lesson of the telescope, and don’t look from the wrong side. Satisfy your own needs and be happy. If the other guy makes out great too? All the better. Don’t consciously look to make the other guy a loser when buying and selling — in the big picture it usually backfires.

11. A bonus — If you don’t include the means and the wherewithal to include real estate investment properties in a self-directed IRA or Solo 401k, you’ve left yourself open for what happened to folks a few years ago. Even if real estate goes through down times, its cash flow remains a constant, even if reduced. Can’t say that for the vast majority of Wall Street investments. A word to the wise.

12. Bonus #2 — those who invest in real estate without a generous Sominex Account (cash reserves) are begging for the opportunity to work well into their 70′s. For some it’s proved to be the concept saving them from disaster — and more than once. Thou shalt have cash reserves.

I’d love to talk with you — mostly cuz I need a fix. Call me at 619 889-7100. Have a good one.

Related posts:

1. 10 Ways Real Estate Investors Can Ensure An Abundant Retirement
2. San Diego Real Estate Investors — Being Dumb Like A Fox — Don’t Retard or Delay Retirement
3. Transitioning To Retirement — A Recent Comment Deserves A Front Row Response
4. Taking Your Retirement Plan To Retirement — It’s About Not Letting The Bastards Win.
5. Road To Recovery — Part II — Establishing Tax Free Retirement Income