Welcome to part 3 of Investing now for the future, my personal strategy to ensuring an enjoyable retirement. This is the final installment of this blog. I hope to hear from you and how you plan to live a wonderful successful retirement.
Taking money from your future and your portfolio
Investing to fund your retirement years is great, but how do you maximize your nest egg. Prioritizing where you spend your money can also play a big role in how you do in the future. As I mentioned part 2, I always try to invest in appreciation assets, items like stocks and real estate that pays you back! Living in different parts of the great city of Toronto, I’ve seen many habits which could hinders one’s portfolios. I came across this video which I found very interesting. Watching this video, you will know someone who falls into one of the categories mentioned. Watching this video, you will also learn that a luxury car is waste of money. Even the house we live in is really not an asset. You’re freaking out, right?
A lot of people are betting on their homes to fund their retirement. Remember you need to live somewhere. Now if you had a renter living in your basement apartment then that’s a different story! I have a love hate relationship with my home. I currently pay $5500 + in properties taxes and I get nothing back, right? Well I know that’s not entirely all true, I know it pays for my kid’s school, garbage pickup, the community centres which still require fees to use. I did a rough estimate; I will dish out approximately $140,000 in property taxes during the duration of living in my home. I also dished out $6000 a few years ago to repair the roof, another $6000 removing my old rotting wood railings and replacing this with aluminum. Will I see my returns? Perhaps when I sell.
With the new government stress test implemented to cool the market, will potential buyers even get a loan to own a home? Well, hopefully, I do not have to exercise this option for another 10 years when I plan to semi-retire!
What pays you back
Education, this is something I gladly pay for. I am always signing up for investment forums, information session or seminar that are both free and fee-based. Learning how to invest and exploring other strategies are invaluable and pays back dividends 10-folds
Stocks or ETF that pays dividends. If you pick this strategy, try to only pick stocks that pays dividends that are paid even during bull (up) and bear (down) markets. Example of such stocks are Johnson and Johnson, Philip Morris (now called Altria Group), Canadian Rail and Wal-Mart to name a few. Now, so where to start? Think of all the things you absolutely cannot live without. Play a game with kids, make a list of items in your household like soap, food, tooth paste, natural gas, electricity and water. Compile a list and buy! Always consult a professional!
Gold. I only started to dabble in gold because China and Russia were buying the world’s gold supply. Why? I never liked gold stocks and never jumped on the bandwagon when gold stock was hot a couple of years ago. I always felt that gold was too volatile, but something is brewing! I remember hearing Kevin O’Leary (Shark Tank, Dragons’ Den) on one of the business tv shows that we human fantasize about selling piece of gold for food if the paper money system ever becomes worthless or collapse. I think that was a very interesting comment that still sticks with me from this very day!
My home is where I lay my hat
Investment properties there are all types student rentals, condo, commercial units, and a house you can split into two and rent upstairs and down stairs. Keep in mind real estate investing is lot of work but, worth it! Also keep in mind you need great credit.
Do you see where I’m going with this? When buying stocks look for the best companies that sell everyday staples that pays you dividends. Buy properties where you can rent (multiple units are best) and get great tenants. Investments like stocks and real estates are ways you make money while you sleep.
Always ask this question…how can this pay me back?
Disclosure : I am not a financial advisor and you should always consult a licensed professional before making any purchases in stocks or real estate.