Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Simple Secret to an Early Retirement

Personal_Finance / Pensions & Retirement Oct 15, 2013 - 12:09 PM GMT

By: Money_Morning

Personal_Finance

Robert Hsu writes: In my early career, I was fortunate to do well financially while working at Goldman Sachs. I also made the decision to live below my means, and to invest intelligently. By my late twenties, I had amassed a seven-figure nest egg, and in my early thirties, I actually took an extended vacation for about five years.

What I came to learn, however, is that you don't have to work for Goldman Sachs - or be a multi-millionaire - to be able to retire comfortably or early.


You don't even have to figure out your "number"...

It's Easier Than You Think

In his 2005 bestseller, The Number: What Do You Need for the Rest of Your Life and What Will It Cost?, author Lee Eisenberg scared a generation of would-be retirees by pointing out that most will never be able to amass the multi-million dollar nest egg they will need to retire comfortably, let alone retire before the traditional age of 65.

Eisenberg's "number" represents the amount of money one needs to be able to retire comfortably for life. I have my differences with Eisenberg's thesis, but there is some truth to the grim picture he paints of investors who haven't adequately prepared for their retirement.

Certainly, one way to make sure you have enough money to retire comfortably, or even retire early, is by accumulating a big "number" - a big dollar amount in your investment accounts - before you stop working.

The key to accumulating a big number early is a combination of good, old-fashioned hard work, thrift, and smart investing.

"Big," of course, is subjective.

There are plenty of smart investors who have less than $1 million and manage to live quite nicely from the income generated in their investment accounts.

In fact, having the right income-generating investments is actually more important than amassing a big Eisenberg "number."

The Income You Need, Delivered

Let's say that in order to retire early, and/or comfortably, you need to generate income of $150,000 per year in pre-tax income.

To do that, you would have to generate a 30% return each year on a nest egg of $500,000, or 3% on $5 million. Obviously, having the $5 million allows you to get that 3% a lot easier than if you had $500,000, but you definitely don't need that kind of capital to live the way you want.

The table below illustrates some of the various ways to get to that $150,000 per year from your current capital base. The yields listed here represent the typical expected yields in that given asset class.

Yield, Capital Base, Sample Investment
1% $15,000,000 1-year CD
3% $5,000,000 Treasury bonds
6% $2,500,000 Preferred stocks
10% $1,500,000 Master limited partnerships (MLPs)
20% $750,000 Top performing MLPs with 2X leverage
30% $500,000 Top performing MLPs with 2X leverage and cap appreciation

As you can see, the lower your capital base, the more you have to employ alternative income-generating investments to get the kind of return you want.

Securities such as master limited partnerships (MLPs) are the key to big returns, offering yields in the double-digit percentage range. And, if you use leverage to help supercharge your returns in the best MLPs, achieving that $150,000 with a capital base of $500,000 becomes quite achievable.

I'll be back with a recommendation in the next few days. In the meantime, here are the recommendations I've made in the last few weeks...

These Income Stocks Are High Growth in Disguise
Classifying MLPs as "income" stocks is a big mistake. It's a costly one too...especially if it's growth you're after. Yes, the partnerships toss off tons of cash. The high-net worth folks I work with can achieve, for example, $350,000 in cash payouts from investing $5 million in an MLP yielding 7%. But they're more like growth stocks in disguise...

A Safe "Specialty Fund" that Pays Up to $850 a Month
The long-term growth potential alone makes these shares worthwhile. But you'll also get a ton of cash - up to $850 a month, depending on how much you invest. That's what makes these "specialty funds" so special. They do the work, you get the money...

How to Give Yourself a 10% Pay Raise in 10 Minutes Flat
There's only one reliable way to make 10% or more a year... especially now, in a rising interest rate environment. Growth and income are inseparable. The three companies you'll see today are perfect examples of this. And "total return" has never been more important to seek. These shares will pay you 5% to 10% in cash.

Source :http://moneymorning.com/2013/10/15/the-simple-secret-to-an-early-retirement/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in