Is it not too late to take control and retire happy!

As the baby boomers, myself included, are retiring at a rate of 10000/day now, more and more media outlets, advertisers, financial institutions and other service providers raise their voices to offer deals.

What I have always found to be a strange system over the years is the massive delegation of control and engagement when it comes to the money people will have to live off after retiring.

When I first came to the United States 25 years ago it was new to me that he parts of the working population would put money, their own and some from their employer, into investment plans called 401K or others with tax code identifiers. When looking into it a little deeper, I learned that self-proclaimed experts offer to invest the money on behalf of the employee, collecting substantial fees each time they deem it appropriate to make a change in the portfolio of investment.

One would think that these changes would be approved by the investor, but the truth is that they occur without any involvement and lower the performance of the invested funds significantly.

On the one hand we are frequently talking about the golden years when retirees don’t need to work, have a happy life, supposedly travel wherever they want  from their paid off house that had a mortgage on for 30 years but the reality is totally different. 35% are still paying on their house when retiring and almost 25% still pay at age 75. Car loans that have become common place are higher than the actual value of the car that is being bought and the burden in that area as well as credit cards is ever increasing.

With these and other facts in place, any significant disruption or correction in the equity markets that will reduce the value of the managed investments will further threaten the ability to retire and live a nice live as promised as golden years.

I asked myself how I would handle this issue and came to the conclusion that taking back control is the first most important step. At the same time and almost equally important is the need for financial education. Nobody received it in school but now that we are moving towards retirement it is more important than ever. As soon as you start looking into it, you learn that using software or other systems to do the equity investments the managers of the employee plans or banks or other investment houses make, will not work. The whole system has been developed and created to be most beneficial to large institutions. You as a single investor buying and selling stocks can’t compete.

More importantly, taking control of the investment activity in the stock and bond markets is not really helping anyway when the goal is to have control. The companies that are represented in these markets are not in your control. All you can do is speculate how they will run their businesses and hope they do it well, so the share prices are increasing. You also need to hope you can detect when they don’t do well so you can get out before you lose money.

I studied it for a while and came to the conclusion that there is an area around the world as well as here at home where people who are considered successful and wealthy put their money and retain control. That are is real estate. You buy an asset, put a relatively small fraction of the cost in using your own money, finance the rest with money form a lender or bank and let the tenants in your property pay off the loans.

What many people don’t realize when considering this investment approach is this: You are providing a service to the nation and the government.

We always and rightfully thank public servants and members of the military for their service. As a retried Ari Force officer, I always appreciates those thanks.

When you look into the tax code you can read that the government sees one of its roles in providing shelter for the population. There are two ways that can happen:

  1. The government can build and manage housing for the public. It does that thru the department of housing and urban development HUD.
  2. The government can incentivize private individuals and business entities to build, own and offer housing to the public. It does that with hundreds and hundreds of pages in the tax code so that we are members of the public can help with this huge overarching goal

When I started in 2003 I wondered if it would be too late for me to build a portfolio that will sustain me in retirement, allow me to transfer substantial assets to my daughter when I leave the planet and be independent to developments in the social security system, any other retirement plans, the stock market, etc.

I can say now that it is not too late, even if you are in your fifties. True, its not a fast path to success, but it is the one that has proven to be the most successful, best supported by rule sand incentives and that is relatively independent from economic and political changes. The fundamental human need for shelter will always exist and those who help provide it will always be rewarded.

Going forward I will describe my journey towards financial independence in retirement applying a system I call “The IDEAL GROWER”.

For today I like to inspire my readers by telling you:

Is it not too late to take control and retire happy!

AMC is an international consulting firm that serves the corporate and private sectors in two prime areas:

  • Project management of change initiatives
  • Facilitation and teaching to implement learning designs

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