Like Marlon Brando’s famous boxing character’s lament in the classic film “On the Waterfront,” you coulda been”…perhaps not a contender…but something even better. A millionaire.
Sure, but probably like me, you aren’t. Not everybody can be a boxing contender but just about everybody can be a millionaire, at least judging by what I read. You just have to devote body and soul to it. Be obsessed with the notion.
But for most of us, we failed in three areas:
—We didn’t start the millionaire ambition years ago, when we were perhaps in our 20s.
—We didn’t diligently save our money.
—We didn’t consistently make conservative but healthy investments that paid off to the point where we can rely on that $1 million.
Here’s a startling calculation from planner David Fernandez not designed to make you feel any better: If you save just $4,682 a year at age 25 and retire by age 65 (assuming 7 percent annual returns), you’ll reach $1 million (excuse me for not also doing the math to check but we’ll assume in this case that he is right).
So should we do like the Samurai warriors or the Roman nobles and fall on our swords?
No, of course not. But what should we do if we are in our 40s or even 50 years of age with no substantial amount of money set aside?
We can still look to investments to save us and particularly to real estate.
Here’s my suggestions:
—Think about delaying retirement to 68 or 70 or even 75. That gives you extra time to accumulate some money for real estate investments.
—Get rid of all your debts. You don’t want that hanging over your head later. It may surprise you but many retirees carry over their debt into later years. These include mortgages, etc. This is money you can otherwise use for investments.
—Take advantage of tax and retirement laws. Some IRAs such as Roth are tax-free. Use them.
—Look for multiple income streams in your investments. That means diversifying any investments.
—Save, save, save your money. That will provide you with investment cash, a critical need.
Here’s what not to do:
—Don’t get panicky and buy into high-risk investments to make up for your lost time. Don’t embrace any huge risks. Think through your investment strategies.
—Worry some but not too much.
Consider that even if you had $1 million and could live off the interest (say $20,000 a year at two percent interest…admittedly very conservative), your stake would not guarantee happiness.
If you don’t believe me, ask someone who actually has $1 million (which I did). They will almost certainly tell you that embracing life’s passion, good health, and positive relationships are just as important as that $1 million. Thinking that money can buy happiness is only found in the movies.