“It is easier to invest for cash flow during a financial crisis. So don’t waste a good crisis by hiding your head in the sand. The longer the crisis lasts, the richer some people will become.” — Robert Kiyosaki
Are you looking to retire but can’t quite figure out how?
Maybe you have money in retirement, but you can’t get enough cash flow to cover your living expenses.
George Foreman once said: “The question isn’t at what age I want to retire, but at what income.”
You may be asking that same question!
It doesn’t matter how old you are; you want to know if you’ll have enough money to retire.
Most retirement assets are in Wall Street.
I know this because I was an investment advisor.
There’s almost $14 trillion in Wall Street stocks and retirement accounts.
That’s absolutely crazy!
55% of all stocks are owned by retirement accounts.
The only way to become financially free is to get out of Wall Street and get into Main Street.
Wall Street is set up to charge you fees.
The whole system tries to get you to simply buy and hold and never sell.
This does not serve most people.
There is also an incredible risk of being in the stock market.
Let’s look at this chart.
In 1929, you can see when the stocks crashed.
They went down 89% and did not return until 23 years later in 1952.
That’s a long time!
If that happened in 2022, they wouldn’t get back to their same value until 2045.
This doesn’t even include inflation.
Recovery could have taken 30 to 35 years when you include the loss of purchasing power.
Ouch!
When we’re talking about retirement, I want you to consider what the secret is to getting there.
It’s not gonna be through Wall Street.
There are ways you can reduce risk, particularly through passive investments.
Let’s get into it!
1. Suitable Investments
Wall Street wants to get you into suitable investments.
That’s actually a term they use while training investment advisors.
My counterpoint to that is:
Would you like to have a suitable spouse or go on a suitable trip or have a suitable car?
No!
You want a great spouse or a great car or a great trip.
Wall Street is set up to sell you stuff that’s mediocre or okay.
I read the word “suitable” and I think “mediocre.”
I don’t want anything mediocre.
I want something amazing or awesome or powerful.
Why would Wall Street insist on selling mediocre?
They want their fees.
If you have any investments with them, it’s called assets under management.
They get hidden fees of 1% to 2%.
They have other fees they tack on.
It’s just fees, fees, fees!
As my net worth has gone up 20x over the last five years, I’ve noticed that no one gets wealthy by playing it safe.
Stocks and bonds are taught because Wall Street spends billions of dollars every year telling you that they are safe.
In reality, they’re very high risk.
If you look at the price-to-earnings ratio, it’s very similar to where it was in 1929.
That’s pretty scary!
When ratios are that high, there could be a sense that a crash is coming.
Another concern is with bonds.
When you look at historical value, we had bonds 40 years ago that paid 15% to 18% or higher.
Now if you’re lucky they’re paying 4% to 6%.
They’re below the rate of inflation.
As new bonds come out, the bonds you hold are worth less.
The bond yields decrease as new bond values come out in the future.
2. Appreciation is Overrated
Let’s say a growth stock goes way up and you don’t sell.
That doesn’t really benefit you, does it?
How can you live off that cash flow?
You may have a taxable basis when you sell, but it doesn’t continue to make you money.
Some dividend stocks do allow for cash flow but there’s also a lot of volatility.
I’m not necessarily a huge fan of dividend stocks, either.
If you want to retire off your investments, you must have events that give you money.
Consistent cash flow is king.
How do you retire at any age?
How do you look at your life and say you want to leave your job?
Maybe you just want the option.
The idea is to have what we call a rat race number.
When I did this, I had to figure out what my living expenses were.
I live pretty simply but I do live in Los Angeles, which is expensive.
I realized for about $50,000 to $60,000, I could live pretty comfortably.
It was enough for me to leave my job.
That was my rat race number.
When my passive income reached $50,000 to 60,000 a year, I was free.
I could leave my job.
I could do what I wanted to do.
The only thing that allows you to do that is cash flow.
In my opinion, cash flow is way above appreciation.
It’s like Robert Kiyosaki says: “I’m a cash flow guy. If it doesn’t make me money today, forget about it.”
3. Your Secret Weapon: Your Retirement Account
Your secret weapon is your retirement account.
A lot of people don’t realize they actually have money to invest.
You can use your retirement to invest in things like real estate or basically anything outside of Wall Street.
Over half of the funds invested into the stock market are from retirement accounts.
The amazing thing about using a retirement account is that it allows you to grow your money on a tax-free or a tax-deferred basis.
It also allows you to free yourself of the stock market’s volatility.
The stock market on average returns around 7% to 8% per year when you include down years.
For every big year, you’re gonna have a down year.
In contrast, a lot of our multifamily deals are typically in the 14% to 16% range.
The deals yield cash flow and there’s an appreciation component as well.
Now that I’ve shared some of these steps to financial freedom with you, I want to hear what you have to say!
Are you going to use your retirement to start investing?
Let us know in the comments below.
Before you leave, make sure to check out our special report about inflation investing. It shares the best choices to invest during an inflationary environment.
If you are interested in investing with us, we are happy to answer any questions that you may have. Join our investment club today and we will be in touch.
Disclaimer: I am not your investment advisor. This is for educational purposes only. I am not giving specific advice on what you can do. I am simply giving my opinions.
