How to Become the CEO of your Retirement Portfolio
Take control of your future, increase your investment returns, reduce volatility and stop paying fees to investment fund managers!
Have you been continuously disappointed when you see your investment returns each year?
Do you want a secure retirement plan that provides you monthly income and allows you to have assets to leave to your children?
If you have answered yes to one (or both) of these questions, it may be time for you to become the CEO of your retirement portfolio.
90% of the world’s millionaires invest in real estate because it provides the best returns and it is more stable than the stock market in regards to the large swings. With real estate investing, you control your investment. You choose how much, where, when and the plan that you will execute. The first option is to develop a plan that allows you to have a steady flow of income when you retire. As an asset, I love real estate and one of the key benefits is leverage. If I invest $100K in the stock market and make 5% annual return, I have made $5K. If I invest $100K in real estate, that is my 20% down payment on a $500K house, you leverage $400K from the bank. If I make a 5% annual return, I would have an annual return of $25K and this is just one of many benefits to real estate investment.
If you have a good plan in place and invest wisely, it is possible to retire with enough cash flow to support the retirement you dream about.
However, there is also another option that many people are not aware of, as I wasn’t prior to getting involved in real estate investment, which is to investment your retirement and TSFA funds in real estate (for ease, I will refer to all these funds as RRSP funds). Like many people, I opened a RRSP account at the beginning of my working career through my bank and thought my only option was to invest in the traditional market. I set my risk tolerance and crossed my fingers. It grew slowly, some years had modest returns and some years I would have to double check the beginning balance because it didn’t seem to move even when it showed I had growth.
I also knew that regardless if I made any money, the investment manager would still get the 2% fee. If you have a good year and have a 6% return, you still have 33% of your profit being paid in fees but on a bad year you can lose money while your investment manager profits. Many of us do not spend a lot of time considering just how much we are paying out in fees over the course of our careers but the more I thought about it, the percentage I was paying seemed outrageous to me!
There are alternatives and these RRSP funds can be invested in real estate. The money remains in the same type of account and therefore there are no tax implications for investing. As well, you do not have the fees and commissions that you would have with typical investment accounts.
The best way to use these funds is to become an “arm’s length” lender where you would get a pre-determined interest payment on a loan you would provide like a mortgage through your RRSP account. There are benefits to you, as the lender, making higher returns than traditional investments and the investor receives capital to make their deal.
To start this process of becoming a lender, you would transfer your funds into a self-directed RRSP account through an institution such as Olympia Trust. These organizations act as a trustee and manages self-administered registered plans, they receive your payments and monitor your account on your behalf. The loans are set up through multiple lawyers and have defined criteria that must be followed. Warning: the process to transfer your account may take time so you should start this process before you look at deals. Traditional investment organizations will typically put up road blocks, may give you false information and/or lose paperwork.
Although the movement of the funds may take a bit of persistence, the result is worth it as you create wealth and take control of your future!
If you want to become the CEO of your future and would like to set up a plan to achieve your goals, click the link and schedule a free consultation SIK Property Inc. - Contact Us.
If you would like to know more about how real estate generates wealth, download our free guide that explains each wealth generating stream and provides a real life example of how real estate investment compares to traditional stock market investment 7 Ways Real Estate Generates Wealth.