You're Being Told To Save Too Much...

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??? Learn: The Retirement Savings Myth

The whole premise of how much you need to save for retirement is flat wrong.

It is based on the 4% rule. The safe withdrawal rate from a stock/bond portfolio.

It assumes all your assets are in the stock market and you are living off savings only, requiring large accounts.

Of course these investment accounts generate fees for Wall Street and individual advisors like myself.

Using this “4% rule”? some stats show you need to be saving 30% of your income if you are a high income earner. Talk about stress and sacrifice!

Axios recently reported this is the first generation to rely on the stock market instead of pensions to navigate the financial vortex of retirement.

The result is a feeling of perpetual insecurity, even among those who've amassed substantial savings.

Who’s idea was it that retirement should be based on something as volatile as the stock market, which is completely outside your control?

Retirement is about cash flow. Period.? You can retire comfortably with less saved by incorporating cash-flowing assets in your plan.

The withdrawal rate of the asset is critically important and dramatically changes the amount of assets you need.?

For example if you have $3 million in the stock market using the 4% rule you get $120k per year in income.

Yet if you had $2 million in real estate with 6% yield you would have the same $120k per year in income.

Here’s a visual of this:

In the old school real estate method you put 20% down.?

You used bank money for the other 80%.

The renters paid off the property for you.

So the amount you needed to save was dramatically less than trying to amass $3m in a 401k all on your own through massive amounts of stock market volatility.??

Takeaway: The higher the withdrawal rate, the less you need to save.

Keys to make this work: Leverage (using other people’s money) and tax protection.?

While Real Estate is great, it’s tough to find deals right now.?

There are other strategies to safely use other people’s money on tax free basis and we will cover those in our upcoming LinkedIn Live event on September 14th: “5 Strategies Millionaires Use To Cut Taxes By 50% and 5x Wealth - Part II”

Register Here: https://www.dhirubhai.net/events/5strategiesmillionairesusetocut7099407041563131904/theater/

??Chart:? The U.S. now has the lowest vacancy rates in almost 70 years.

There is definitely a shortage of housing and the probability of a housing bubble bursting seems to be low.

Real Estate is still one of the best long term investments and should be part of every HNW portfolio. But, finding deals at the right price is very tough right now.?

The larger problem could be affordability and income shortfalls for the average American.

From Fortune’s real estate editor Lance Lambert:

• IF U.S. incomes spiked 69%, we'd return to pre-pandemic housing affordability levels.
• IF U.S. home prices fell 41%, we'd return to pre-pandemic affordability.
• IF mortgage rates fell 4.3 percentage points (from 7.26% to 2.96%), we'd return to pre-pandemic affordability.

Construction costs rose about 50% from 2020 through the June 2022 peak and are holding on to most of that increase. So no help there.

The boom in short term vacation rentals has been great, but we may see a return to more of the buy and hold, long term, blue collar rentals.?

But you still have to find those at the right price and you might not make money for quite a while.

Have the recent high returns made people too impatient for this strategy?

??Productivity: Listen To Music While You Work

Some recent studies indicate 90% of all workers surveyed saw their work performance improve when listening to music during office hours.?

A few other benefits:

• Music Helps Keep Us Focused
• Music Improves Memory
• Music Can Reduce Stress and Anxiety
• Music Can Increase Motivation
• Music Can Promote Camaraderie
• Music Makes People Happier at Work

Check out the cool infographic: Music and Your Brain

??Concept: Leverage can reduce risk

?? Resources:

"5 Secret Strategies Millionaires Use To 5x Their Wealth & Immediately Cut Their Taxes By 50%" get instant access in the Wealth For Life LinkedIn Group - https://www.dhirubhai.net/groups/5156642/

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