Category Archives: Capital Growth

How Cash Flow Can Kill a Great Retirement — Video

You’re maybe shakin’ your head at the title, right? Think about it though. IS there a way? How cash flow can kill a great retirement is all about one factor we can’t change.

 

Transcript:   Hi this is Jeff Brown the “BawldGuy”. Today we’re going to talk about how cash flow can kill a great retirement. Older, relatively poorly located properties will always do their damage to your retirement endgame over time. It’s inevitable. It’s like water dripping on a rock year after year. It amazes me how many investors behave as if the passing years don’t affect their buildings the same way it affects them. The older your portfolio gets, the more your expenses go up, the slice of the tenant pie shrinks, vacancies also creep up and, well, you get the sad story. It’s unavoidable. In fact, it’s a fantasy investors foster that high cap rates and less than stellar locations are real. They’re not. That 50-year-old properties today will be just as viable 15 to 30 years from now. What kind of pipe-dream is that? If that’s not bad enough, there’s the buy and hold till you die crowd. It’s like there’s a restaurant giving out the highest quality fillet mignon for half price, but you never want to go back for more. How on earth does that make any sense whatsoever? I know I’d be first in line for that kind of deal. Take advantage of what may be your best friend … time. Listen to the market. It can’t keep a secret. Never has and never will. When it’s time for you to make a move, do it, but do it with your eye on growing your capital, not goosing up your dang cash flow. Cash flow is not king until it’s ready to be. Keep your eye on the ball. The ball’s retirement income, not impressive income now. It’s all about timing. You saved enough to buy investment real estate, for heaven’s sake, cash flow simply is not your current problem. Build your net worth by purposely growing your capital. The larger your net worth is at retirement, the bigger the yield in terms of dollars when it matters to you. It’s not rocket science, right? You want big cash flow at retirement. Cash flow’s prudent at a point. Grow your capital like a possessed banshee, but as safely as possible. Then when it’s time, you can flip the cash flow switch. You’ll have already planned for that day long in advance, so it’ll be easy. Look, today’s takeaway is easy. As in most things in life, timing is crucial when generating a magnificently abundant retirement income. Keep capital growth ahead of the cash flow. You’ll be smiling at your retirement park. If you stubbornly insist like the other guy from day one that cash flow’s the thing, he’ll be wondering, like you, why your income isn’t much higher in retirement. Get your timing right and you’ll be happy. This is Jeff Brown the BawldGuy. I’ll see you next time out.

Supportive Pillars — Video

What the heck are supportive pillars you ask? Separate sources of retirement income. BawldGuy Axiom: The investor with the most options, wins.

 

Transcript:   Hi this is Jeff Brown the “BawldGuy”. Today we’re going to talk about the idea of supportive pillars when we’re talking about building retirement income. For example, the cornerstone pillar can be well located real estate income property. How much can you safely acquire and pay off by the time you stop working? Much of the time folks learn that they can acquire a lot more real estate investment properties than they previously believed. All we had to do was show them a menu with more options. Again, the more options the better off you are. Now, if you’re young enough, say mid 40s max, you can also generate tax-free income in an EIUL.  Most folks can create tax-free income in the range of $3000 to $15,000 a month depending upon their budget, time allotted and the potentially related planning vis a vis real estate. That’s a tax-free pillar. In fact, it’s best when it becomes a replacement for your employer’s 401K. We’ll get into that in rich detail another day. The thing is over a 20 to 40-year period you can create a completely stand alone income source beginning at retirement that will help fund your retirement with tax-free income. One of the best things about an EIUL is that when you die inheritance tax doesn’t apply. That’s because according to the Internal Revenue code it’s not even part of your estate, but again we’ll take that up later. By the way, an EIUL is a kind of insurance. A third potential pillar is income from discounted notes secured by real estate. Now, they can be your personal account depending upon strategy or inside the envelope of a solo 401K on the Roth side. In fact, strategies can be combined using notes in real estate to enhance both cash flow and capital growth. We’ll talk a lot more about that another day. It’s very important, but today’s take away is this. You want to create multiple pillars of retirement income. They can work together when prudent to increase both income and capital growth depending upon your plan. Most investors simply are not aware of the options they have on their own retirement income menu. I hope this helped out a bit. This is Jeff Brown the BawldGuy. I’ll see you next time out.