Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

The Simple Secret to an Early Retirement

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

By: Money_Morning


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 :

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:

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 - 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

6 Critical Money Making Rules