To those that are retired... advice wanted!

[Airpark]

I retired from the Military and went into real estate. Did OK. Then found my niche. Tax Lien Investments.

I invest in tax liens that pay 1.5 percent per month or 18 percent per year. True some pay off early, however over the years I have found that most stay out about 18 months. 18 X 1.5 is much better than you will make on your IRA, etc.

A mere 200 K at 18 percent will pay you 36,000 in interest each year. Your 500K at 18 percent is 90,000 per year.

If the property is not redeemed, ie., they fail to pay the taxes, it matures to you. It is pretty much yours to do with as you see fit.

Some is fair, a very small amount is good and most is not worth the taxes owed on it.

Like all investments....you MUST exercise due diligence and act responsibly in investing in tax liens....do not go at it willy-nilly.

Keep this money separate and re-invest it every year....using the bankers rule of 72, your money will double every 4 years at 18 percent per year.

However you will not, in most cases make the full 18 percent, more like 14 to 16 percent will actually come to you. Even at that rate you are doing well.

If you are interested in this sort of investment go to the local law library in you nearby courthouse and ask the librarian to assist you with the tax lien statutes. She will make you copies and you can take them home and read them at least three times to get over the legalese.

If you google tax liens you will get about 1.7 million sites in less than 6 seconds. I do not reccommend any of them....read some and learn...there is lot of good free information on all of them. I learned this way and by going to the law library and getting the statutes so I knew exactly what the state would and would not do, how, when and why.

Start small, do not jump in, the water can be very deep.

I have been doing this since about 1988 and would have it no other way. I actually have to work one week out of the year. That being the week that the tax lien sale is held. The rest of the year I get a chek every month from the county. This check is my money coming back plus the interest accrued. Takes at least one day per month to go down and deposit the check.

This way you have no dead beat tenants, no bum checks, no stopped up toilets, no broken sinks, bathtubs, no torn up buildings.....etc.

Wife and I fish, hunt, shoot, travel, with no worries about property management, etc.


Good Luck,

 

[blujax01]

Others have said it but I'll repeat it. Do NOT count on Social Security for one single penny. I seriously doubt anyone under 40 is going to see a dime from it. If you do, count it as a bonus.

My old man gave me that same advice when I graduated high school in 1973 and I still live by it.

He said: "If you never expect the government to give you anything but a hassle, you'll not be disappointed."

And I'm proud to say that in my 59 years on this planet, I have never taken any government cheese in any way, shape or form.

Pay down your debt and keep it that way. Ideally, you and the Missus will live until you're both well into your 80's. Being entirely liquid and having a million dollars in cash and assets when you're 60 is not an unreachable target, and should last you your final 25 years.

 

[PA Reb]

My old man gave me that same advice when I graduated high school in 1973 and I still live by it.

He said: "If you never expect the government to give you anything but a hassle, you'll not be disappointed."

And I'm proud to say that in my 59 years on this planet, I have never taken any government cheese in any way, shape or form.

Pay down your debt and keep it that way. Ideally, you and the Missus will live until you're both well into your 80's. Being entirely liquid and having a million dollars in cash and assets when you're 60 is not an unreachable target, and should last you your final 25 years.

"government cheese?" Sounds like your father gave you some good advice sir but I do believe that most people receiving a deserved SS income are only getting the money that they themselves paid into the program after years of hard work. Correct?

 

[johngalt]

I recommend that you DON'T put everything in 401k accounts, this locks your money up until age 59.5. Have some investments that you own free and clear.

 

[parts]

Like a previous lister said: find a financial planner who works for a flat fee, and under a contract that you can easilly terminate if needed. Worst thing I ever did was turn my retirement funds over to Certified Financial Planner who represented American Express. The guy put me into a "balanced" mutual fund mixture, all sold by American Express. When things started going south, the redemption fees were unreal, i.e., 5% penalty the first year, 4% the second. I finally got out and took control of my money; things have worked well since.

In your situation, you need to understand that you already have more common and financial sense then the average Certified Financial Planner, they basically all have the same "canned" approach to investing.

If you go the financil planner route, take the time to seek out recommendations from friends and people you know and trust.

Bottom line, it seems like you're on track by following your own judgment.

David

 

[blujax01]

"government cheese?" Sounds like your father gave you some good advice sir but I do believe that most people receiving a deserved SS income are only getting the money that they themselves paid into the program after years of hard work. Correct?

Absolutely correct. If there's any money in Social Security when I hit 66.5, I'll gladly take it. But it wasn't intended as a savings account for anyone with a modicum of common sense when FDR forced it down my Grandparent's throats and it still isn't.

80 years later, the ants are still ants and the grasshoppers are still grasshoppers.

FDR signs Social Security Act ? History.com This Day in History ? 8/14/1935

 

[Old TexMex]

Sounds to me like you're the one that ought to be offering advice, my friend!

Never stop being productive, never cease to be charitable.
(One will kill you, the other will make you wish you were dead)

Retirement is a ploy invented by upper management to get rid of competition within the firm and in the industry generally.

I've never had a "regular job", so there will be no retirement for this fellow.

 

[Jessie]

If you seek that professional help, research their titles. There are Certified Financial Planners, Certified Financial Advisors, etc., etc.. Learn which one will best help YOU and your situation. Some are geared to stock investing mainly, some specialize in personal/ family planning and others are commercial.
Sounds complicated but its not. Look at it like college degrees, associate/ bachelor, masters, etc.
All those letters after their name will tell you the level of financial education a person has. You don't necessarily need pay at doctorate rates for bachelor level advice.
On the other hand, you don't want a surgeon operating on you with only a bachelor level education in the field.
Just research what they all mean and pick from the level you need.

 

[Franklin]

Don't retire........ you will loose all your VACATION!

 

[cowart]

What were your best pre-retirement moves? What do you regret doing or NOT doing?

I retired in early 2010.

My best pre-retirement move was saving a lot in my 401k/IRA. I regret not saving a similar amount in an after-tax account such as a Roth IRA. Having most of my savings in a taxable account is now a hindrance when I want to make a large purchase - the impending tax bill influences against making such purchases.

When I get to age 70.5 and required minimum distributions kick in, it may be worse.

 

[ChuckS1]

Find an investment adviser. Ric Edelman is one of the better ones. Take your information to someone like him, and let them advise you what strengths and weaknesses you have. One of the better books written on the subject is "The Lies About Money", by Mr. Edelman. Get it; read it.

I'll second this recommendation of Ric Edelman and his firm. He's got a new book out on retirement planning that would be a good read. I think it's about $15 on Amazon.

 

[jdh]

Insurance:
Life. You do not get to choose when you go. And don't make the mistake many make and just get coverage on You. Take out a policy on her
Property Yes it is paid for. You don't want to have to go in debt to rebuild when, not if, something happens. Update your coverages as your values increase or you add to your stuff. Check coverages and buy additional riders for high value items that may have coverage limits like jewelry, computers, cameras, and firearms.
Health Great your are young and healthy. So was my brother in law when he got hit with melanoma out of the blue and is now almost $1,000,000 in debt to the health care industry. He didn't need health insurance either.
Liability not just on your car. Get an umbrella policy that covers at minimum 150% of you assets.
Prepaid legal can be an asset saver also.

If only I had listened to myself.

 

[loutent]

I am 38. I am married, no children. Our primary residence (3bdr, 1/2 bath, on 1 acre) is paid for in full (30yr mortage paid off in 8 years). We have two vehicles both paid cash for. We also own 40 acres of vacant land a 4 acre lot near by both paid of.

We have about $280K in our investment portfolio and our net worth (bank accounts, investments, real estate, vehicles) is just a hair over $500K with zero debt.

You will need more …way more - plan (and work) accordingly

 

[rwsmith]

Seems as if.....

Seems that you are doing very well.

 

[jimmyj]

If you are interested in adopting a son, Jimmy is available.

 

[Jeff423]

I will second the advice about getting an investment adviser. I used several "retirement calculators" and they all told me I already had way more money than I needed.
I went to an adviser and he was much more conservative (and believable). I still have enough money to retire but I'm not going to be buying any mansions.
Getting LTC insurance is excellent advice.

 

[feralmerril]

At 38 YO you already are in better shape than 99% of other kids your age! The way I read it retirement is like a three legged milk stool. One leg is your IRA`s, one leg is your company monthly retirement checks you draw and the third leg is whatever else you have in savings or investments.
As I said, you need to max out all IRA type accounts that you can. If your company is matching some of your 401K contributions it`s stupid not getting that match! Thats free money you are throwing away!
A man, being a man, must consider not just himself but his wife. Usually they outlive us. In my case I was single when I retired and didnt think I would remarry. When I croak my wife doesn't get a nickle from my company retirement and she is 17 years younger than me!
As on my earlier reply, you need a living trust to save on taxs and probate time. You need LTC insurance or if you get a stroke, Alzheimer's or whatever else puts you in a convalescence hospital the monthly bill will eat up whatever life savings you have if you linger.
The short of it all though is few people evaporate into thin air when we retire, it`s about what quality of existence we will have.
I dont agree with the thinking that social security wont be there. Mathematically, yes, it looks hopeless. The fact is, were it to stop overnight thats the one thing that would put this country in 100% revolt. Every politician would be strung up after being tar and feathered were they to let that happen and they know it.
If and when it does happen it will be Armageddon.

 

[HOUSTON RICK]

Dividend reinvestment plans (DRIPS), low or no fees, pick them if you are confident or get help, 30 years ago I invested in 35 stocks and had the dividends reinvested and watched them only quarterly and made few sales or changes. Original my then girlfriend now my wife laughed at my efforts - she no longer laughs. Picked blue chip leaders in energy, computers, automotive, metals, defense, finance, aerospace, restaurants, entertainment and food production. Including dividend reinvestment it is worth many multiples of what I put in and I did not buy a yacht for a broker. Don't expect to hear about those from any advisor. There are many helpful books out there on how to start and how to pick equities to buy. I wish that I had as much experience with hand loading! Good luck!
PS-The duty of a "financial advisor" is to turn your money into their money, any benefit that you accrue is an unintended side effect.

 

[Lt JL]

Will you adopt me? I'm clean, quiet, and house-broke.

 

[black1970]

My Smith and Wesson stock made 30 percent of my whole portfolio last year if that tells you anything. My Ruger stock sucked. The best thing one can have is good health. If you have that money doesn't matter all that much. Sell out and move South.

 

[kudzu3]

Like my Daddy used to say "If it ain't broke, don't fix it." You sound like you ain't broke. Don't fix it.

I agree, sounds like you need nothing more. Sure wish I'd a been that prepared at retirement.

 

[loutent]

Don't stop working..don't stop saving..take charge of your own $.

The other guys are no smarter and certainly have no more interest in you than you do.

 

[kaaskop49]

Retire as soon as you can. Take Social Security at age 62. Move to a warmer climate (2013-14 extended winter, anyone?). Find a 'significant other' who is not always looking to spend your money. Do whatever pleases you. Works for me.

P.S. I would be reluctant to rely on firearms as an investment alternative.

 

[Jessie]

HoustonRick,
I disagree with your condemnation of financial advisors. Yes, there are bad, lazy ones as is true with most professions. A good one works for you and your benefit. Do they expect to make money doing it? Heck yes! Nobody works for free.
If you do your own investing you can do fine. But it takes attention and knowledge. It's a full time job. If you miss a market or sector change, it could cost a lot down the road. That's what you're paying them to monitor.
Just be smart and find a good one that's not being paid to churn or sell their companys' product.
Going it alone usually works out if you invest in conservative mutual type funds and leave it alone, but your returns will usually be conservative also.
Talk to an advisor and see if you get a warm fuzzy, if not, move on.
Just like buying on line, history and ratings means a lot.

 

[df06]

retirement savings

Time is money and you are young enough to save and grow your money.

At about your age, I started using an investment advisor. And I saved all that I could including 100% of my bonus money. We paid our home off when we were in our 40s and did not try to have the biggest/best house of all our friends. We paid cash for everything.
With this advisor we invested in stocks, bonds, mutual funds and tax free munies. He developed a balanced portfolio.
We never tried to chase the hot stocks or tried to time the market and sell ahead of declines and visa versa. You will lose your butt some days, weeks and maybe years, but in the long run this has worked well for us.
It is important that you choose an advisor that understands your goals and is not trying to hose you on fees and commission.
So while you are on the right track, get a financial advisor who can do your investments for you.

 

[Old TexMex]

The short of it all though is few people evaporate into thin air when we retire, ......

Merril,
You have wisdom and a way with words that knocks some homers.
Salute!

 

[Harkrader]

Make yourself debt-free, create a trust.

 

[HOUSTON RICK]

Jessie, I have never met a financial advisor who was helpful. My father was swindled by one (perhaps much to with my attitude) with a national firm that partially reimbursed my father, but kept their "advisor" to victimize others. Thank you for your respectful disagreement, but my experience with so -called financial advisors is that they are well meaning kids looking for any job recruited into collapsible companies or subsidiaries given a veneer of terminology selling pre-planned investments on commission the way that Avon sells cosmetics, paying bonuses through captive tiers of recruiter/supervisors and pushing what compensates them most without regard to actual client needs. I am glad that your experience was different. Good luck, Rick