Most long term investing strategies have one element in common: They all require hope and faith. The basic premise goes something like this: You will feed your 401k/IRA/mutual fund account regularly for 40+ years and then hope and believe that at retirement your nest egg will be sufficient to avoid Walmart employment at 65.
Don’t get me wrong – you will periodically receive detailed statements about your account balances and positions throughout the four decades. But those balances and statements aren’t worth the soft paper they’re written on the moment a 2008 type recession ravages your portfolio by 40%! The fact remains that despite the informative statements, your retirement plan hinges in part on your hope that the timing of recessions and market corrections will be kind to you. The problem with that plan is that recessions happen with painful regularity! You can pretty much count on one affecting you right around the time you get ready to retire.
But what about the fact that the market always bounces back up within a few years? Merely bouncing back may not be enough – if your retirement accounts had $100 before going down by 40%, you’re left with $60 and now require a 67% bounce to get back to your $100.
But you don’t have to take my word for it – just look at the facts. The average 401(k) at the end of 2012 had $75,900 in it and that’s an all time high! Let’s not stop there but instead let’s assume you’re not an average investor and I’m off by 100% – can you retire with a nest egg of $150,000? Don’t answer that.
Now contrast that with what our Blueprint real estate investing strategy for retirement offers. You invest your hard earned, even harder saved capital and purchase several high quality properties in a well crafted portfolio. Depending on your investing timeframe, approximately four to five years later one of those properties is debt free. Three years and some change after that blessed news, the second mortgage is paid off. And so forth in a beautiful chain that builds the capital that will lead you to retirement. I call these events “performance benchmarks” because they provide you with solid irrefutable proof that your plan is working long before you reach retirement. You don’t have to rely on just hope anymore. You will have assets that you own free and clear to assure you that you’re headed in the right direction. I believe this is one of the most important advantages our Blueprint real estate investing strategy offers over other long term investing.