28 Jan What are you Falling Back on in your Golden Years?
The city of Austin just allocated $500,000 to “understand” why people are dumping electric scooters in Lake Austin. I would have done it for $250,000 and told them it’s because they were inebriated and are not respectful of other peoples’ property.
The point here is if the government is making those kinds of financial decisions with your money, how well do you think they will take care of you in your “Golden Years?” Can you really count on Social Security and Medicare to take care of you when your most productive years are behind you? According to the Social Security Administrations annual report, Social Security will be depleted by 2035 and Medicare will go bust in 2026. That’s way too close for all of us.
WHAT ARE YOU FALLING BACK ON IN YOUR GOLDEN YEARS?
How about your 401K? Traditionally, we are advised to send our money to Wall Street so that we will have something to fall back on when you are retired. While some sort of automatic savings program is prudent, beware of hidden fees, inaccurate return predictions, and middlemen who are primarily concerned with feeding their families, rather than yours. Also, how much do you need to save? How can we predict? When I was a young doctor, I was told it would cost $5,000/year to send my kids to college. Inflation made those numbers look ridiculously low. Is your mutual fund portfolio going to be robust enough pay the bills when you need it to?
COMMERCIAL REAL ESTATE CAN SERVE YOU WELL IN GOOD TIMES & BAD
For these and a number of other reasons, I have always put my greatest faith and the majority of my effort into hard assets – primarily real estate. The real estate market is slower moving and less volatile than the stock market. While it is less liquid, it is an excellent source of cash flow and a superior hedge against inflation. While real estate is not infallible, it can serve you well in good times and bad. During the Great Recession, my portfolio was not unscathed, but many of the real estate assets kept on producing cash flow, lessening the pain of the recession. A good property portfolio cannot be underestimated.
Our philosophy at Presario is primarily to produce cash flow for our investors and to realize asset appreciation in the process. With cash flow, you have choices. Passive cash flow allows money to work for you, allowing you to concentrate on what you do best. We believe in it so strongly that our principals invest in our projects and in other real estate opportunities.
PASSIVE CASH FLOW ALLOWS MONEY TO WORK FOR YOU
The real estate market is hot now, but it will cool. After twenty-five years in the business, I have found that it can be good in both markets. Now we reap the benefits of a good market. At some point, we will benefit from low asset acquisition costs. Our job is to maintain our focus on the markets and to bring you the best opportunities available. We appreciate each and every one of our investors and we would not exist without you.
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