20+ Year Adviser Reveals His Retirement Plans
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- Опубліковано 28 вер 2024
- Curious about how Azul plans to invest his money during retirement? Watch today's video where Azul reveals all!
=== Azul's "Scammer" Warning & Disclaimers. PLEASE READ!! ===
Be careful of scammers. In the comments, I will NEVER suggest you contact me, offer any investment products, recommend an adviser or anything similar. Some scammers ask for investment help in the comments and later, other commenters post how "great that idea/investment/person is" in the replies. This is a scam. Do not fall for it.
MORE FROM AZUL:
Twitter: / azul_wells
Essays: www.azulwells....
NEED FINANCIAL ADVICE?
1) Google "fee-only financial adviser" or visit www.NAPFA.org
2) #1 question to ask any financial adviser is "Are you a fiduciary to me 100% of the time" Get the answer in writing
3) Please note that some people call themselves "fee-based". This is NOT the same as fee-only. Fee-only advisers have committed to being a fiduciary to you 100% of the time.
4) Speaking just for myself personally, I would only hire an adviser who is a fiduciary to me 100% of the time. This is not a suggestion on what you should do. We are all different and I do not know your personal situation.
MY VIDEOS ARE NOT FINANCIAL ADVICE (Disclaimer):
This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations. To get professional financial advice from a fee-only financial advisor near you, please visit www.napfa.org.
The decisions on how to invest, when to retire and other financial planning topics are some of the most important financial decisions you will make in your life. I urge you to seek professional financial advice as you make this decision. Ideally from a financial adviser, AND a CPA AND an attorney. Having the perspective of all three professions will help you make the decision that is right for you and your family.
This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor may NOT be suitable for all investors.
This information is NOT intended to, and should NOT, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, and/or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
I don't believe in "get rich" programs. Rather, I believe in doing your homework and working with professionals who are a fiduciary to you 100% of the time.
40 now, and everything is paid for. Fortunately, I had a college economics teacher who taught me a lesson when I was 18 years old. That lesson was: you can't buy something else for every purchase you make. Having multiple sources of income is prudent, as is living within your means. I have a 13-year-old vehicle because it is all I need, I like it, and I can do whatever I want with it. My net worth is $4 million, and I can pay my bills without stress, but I don't live like I have that. I have no complaints.
I fully agree; I'm 56 years old and recently retired with approximately 1.2 million in outside retirement funds, no debt, and very few dollars in retirement funds in comparison to my portfolio balance over the last three years. To be honest, the financial advisor's role can only be ignored, not dismissed. Therefore do your research to get a reputable one and that should be any individuals main route into the market.
Yes, I'm in my mid-50s, and a few years back, I moved my investments to my wife's wealth manager. While I haven't caught up to her long-term gains, my current earnings and the growth of my retirement fund, compared to just relying on the 401(k), are pretty satisfying.
Thanks, I just Googled her name and her website came up right away. It looks interesting so far. I'm going to book a call with her and let you know how it goes.
Making money is action.
Saving money is behavior
Growing money is knowledge
Giving money is Awesome!
Great video.
(Also a retired skier!)
✌️😁
Azul, watch out with the blanket statement that growth stocks outperform over the long haul. As a mutual fund portfolio manager (I was ranked top 5%tile) you generally see value stocks outperform for long periods and then growth stocks outperform for long periods. Long cycle periods. Schv or SCHg type holdings.
I love your dividend approach. One fund I ran was an income fund. FI and quality equity dividend payers mix in one fund. Equity side was Similar to the etfs: qdf,dgro,dgrw,nobl,vig,schd. These are great ways to invest without the cost of a money manager. Low cost = more for the investor and you don’t need to worry about the individual holdings.
Love what you are passing on in these videos. Keep up the love and knowledge.
Thanks Mike for your input.
Thanks for the reminder about blanket statements and for sharing your expertise with the group. 😎 Azul
2000 sq ft small house? My primary res is 1048, vacation condo 750. That’s all you need.
Azul, you surprised me. I expected that you would say stick with a 3 bucket strategy or something. I am following the dividend paying stocks strategy for myself but I had a good model. I got that from my father who set up their investments for my mother that way. She lived 22 years after he died never sold a single share just lived comfortably off SS and dividends. She traveled all over, never had to give up her house or car, didn't want for anything and passed away with more than they started with 22 years before.
Could you do a video on how a fee only financial advisor works? I have a meeting scheduled with one but they also manage clients accounts. Super confused with this.
Great vid. 59 and recently retired. Getting a Financial Advisor best decision we ever made. We also now have our Estate Planning set up thanks thanks to our FA.
Azul, don’t take for granted that your senior kids, even though they’re doing well, won’t seriously ‘benefit’ from some extra cash when they are retirement age. My mother passed at 93 and her estate provided some real breathing room for me even though I’m successful.
Good stuff Azul. We are savers/investors and I have always directed this on my own since we were 25. I just followed the writings of Buffett and Bogle, and dollar-cost-averaged into index funds for 40 years no matter what the market was doing. Never selling before retirement out of fear. The down market always recovers over time and we had plenty of time. This simple strategy has worked pretty well for us and we sleep well at night.
Azul, great video. You are a ray of sunshine. I think you should consider interviewing people with strong game plans. Investing always has a individual component, so what works for Azul is slightly different than what works for me. This would add additional food for thought for your viewers. There are the general common themes that are common among all good investors and these would also shine through. Thanks for sharing. I really enjoy your upbeat attitude. UA-cam, the internet can be such a great place for people to interact in a positive way. Your videos are a poster child for positive internet content.
A letter to Azul...............I'm 61 and after 40 years of going every day at 110%, I'm eyeballing that the end is near. Of all the videos I watch like this, your content gives me the best answers and ideas I need, Thank you. My hard work and buying that old, used car, instead of the new one, has paid off. I believe I'm financially secure to retire now (literally, right now). I don't have big worldly travel plans (my wife does :)) that will chew up a lot of capital, but there are things I want and need to do while I still have my health, so, looking at retiring a little early. Working on a plan to "bridge" the gap to 65 for Medicare now. Once that's set, I'm going to hold my breath, and, after 40+ years, stop getting up at 5am for work! It's going to feel very strange (especially because I've taken very little vacation over those 40 years) , but, good! Thank Azul!
What options are you considering to bridge the gap before medicare?
You may consider a 'retirement dry run' as Azul has recommended in other videos. Going all out for 40 years means just stopping and going full time retirement cold turkey may be a difficult transition.
I am 66, your plan makes a lot of sense and reconfirms many of my believes. Appreciate you sharing this on UA-cam.
Great Video. Could you do something on health care savings accounts/ACA for those who retire before Medicare. Thank you!
Hello Azul, I really love all your videos and all the valuable information that you share with us. I am 62 years old and am thinking and planning my retirement soon from VCU Medical Center in Richmond, VA after working here for about 32 years. Your videos definitely helped me gauge where I am in the picture of average American.
By the way, I have a question: I know you like to take the video while you are walking, where are the places that you walk? Some of the places look really great and one day, I would like to visit some of those places.
Thank you again for all you do for all of us!
June Lee
I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run.....
how do I get in touch with this consultant that assist?..
Thanks for the info . Found her website and it really impressive..
*** SCAM ALERT ***
Thank you for your good advice. I have started to rethink my retirement plan of 67. I am going to see if i can do it sooner thanks to you!
Nice video. I fully retired FIRE at 55. I follow my stocks every single day not because I'm worry, I enjoy it. Investing to me is my hobby. Ive been very successful and it gives me something to do during the day. In the afternoon, my wife and I go out and play.
Thanks for watching and commenting. Glad you are enjoying your 55 year old FIRE retirement. Well done. Word of caution. Two most expensive hobbies in the world are:
1) House shopping "just for fun"
2) Watching your investments every day
The risk is when things get scary. How often you watch your stocks is a significant risk factor for people who blow out of the stocks in scary times.
Azul
@@AzulWells thank you for your advice. I’m a long term investor and I rarely sell unless the fundamentals of a stock is declining. If a stock I own dips and I believe it’s due to external factors, I’ll buy more. Otherwise, I never sell the chicken that lays the egg, dividends. Take care and love your videos.
Agreed with everything you said except delaying taking social security. I believe you should take is as soon as you are eligible to receive it and no longer plan on working. I believe this for two reasons - 1) If you do a present worth analysis of taking smaller payments at 62, larger ones at 65, and 69 you will see that the present worth is the same for all three scenarios so there is no advantage to waiting and getting a larger monthly payment. 2) You are going to need money to live on, take the social security versus taking money out of tax deferred accounts. Just my two cents.
If you have a family history of longevity, it can be good to delay SS and burn down your tax deferred savings before SS kicks in. Then you have 40% bigger indexed income and a lower average tax.
I think the 2 house situation is fine if you have one that is the final “age in place” property(meaning access if in a wheelchair). We downsized to a townhouse with an elevator and a private garage at 2000sf from over 4000sf. The renting situation will work till it won’t. We also own a boat, a ski timeshare we love, plan on an RV for a while. No debt, in FL. Have relatives and friends in nice states we can visit. Recently retired in early 60’s from jobs we liked.
As to just looking at your portfolio once a quarter, I get it, but not my nature. I spent 2 years researching retirement, and am pretty certain I have a sustainable plan at this point, having considered multiple contingencies. It basically is, no debt, while creating base cash flow that keeps us solvent no matter what, and then everything else is discretionary spending. So even if the discretionary part drops 70%, we will still have “cheaper” fun. I even created 3 budgets, that I call Base, Moderate, and High. Started on the High, and even the Base has some fun money, so we can survive a major recession with no problem. BTW our Base Budget is well under$100k, so we are not “rich”
Love your channel. Love your sound logical advice! I watch your channel several times per week. And follow your advice.
Thank you!
Like you, I have always focused on investing in high quality dividend paying stocks. At the same time, I look for companies that have a history of raising their dividends year after year. This makes a huge difference in total return. Have a Happy New Year!
Hi Azul. Thank you for sharing this information about your personal portfolio and the reasons why. If you're looking for another video idea - I would be very interested in learning more about a) what metrics you look at when reviewing your portfolio's past performance and b) what topics you might discuss with your financial advisor during the 4 hours per quarter you spend on each.
Yes, please.
I moved ours into a 60/40 balance a couple of years back. Bonds have absolutely SUCKED for the last 2 years.
What software do you use to track dividend paying stocks 1) dividend growth and 2) growth of the capital ? How do I 1)monitor dividend growth and also 2) monitor capital appreciation, with me spending the dividends. How much do I need to save to reinvest as I spend the dividends to live off of.
Love your videos and keep up the good work. Thanks for sharing your insights, especially on the softer psychological side of retirement. I’m surprised you’re going with individual stocks. I know that you said you advisor will manage it, but it’s well known that very few money managers beat the market. Why not an ETF like SCHD or DGRO for your dividend portfolio? As for bonds, corporate bonds are often correlated with the companies that issue them. I’m surprised you aren’t using short and intermediate term treasuries.
Azul, how do you choose a financial advisor? I mean someone who is not going to steal your money?
Great content Azul! I'm taking notes on this one & love your long-range plans. Question, can you expand a bit more on fees charged by wealth advisors. I've had a very good one since I was in my twenties and understand they typically charge from 0.25% to 1% annually, however, I also know that the fee they charge can largely depend on the amount of money being managed- Is it true that if a person's net worth is over three million, that annual fee is negotiable and if so, can you provide some tips for leveraging the best rate. I know that ensuring they are a fiduciary firm is also key. Thank you and happy pre birthday!
I’m just signing up with one advisor and he is fee based. Meaning a flat yearly fee and he advises me setting up my funds and accounts. We went thru my current retirement funds, one thru a mainstream company and another thru a retirement fund related to my profession. He said the amount I’m paying for mutual funds, ETFs and management fees comes to $3,800 yr. Reallocating to similar but lower fee (mostly vanguard) funds and not paying the management, just the $1k to the new advisor, I could save about half that. Wish I did it years ago.
Why bonds and not a bond fund? On the dividend side - why not a fund like VYM or SCHD and the balance in the S&P 500 index?
Great video. Your goals and approach are spot on. Really resonates.
No worry is my #1 goal as well and it serves me well.
One spouse and one house also great advice. I am 50 years happily with my one and only spouse. We joke that the only way out is in a wooden box. We did the two house thing early on with a vacation home on a lake and the house in the city. Much better to rent when / if you need a second place. We have a house with a big pool in the city but beside a river. So miles of nature trails and view of a forest in the heart of a city. We actually don't need a lot of adventure.
I have no investment advice. Just set it up so you don't have risk or worry. We have agreed that when one of us dies the other will buy a big enough annuity to meet all expenses for life. Then we'll not get scammed when we have dementia.
Our wills leave everything to a good cause. No one will know or care that we passed other than a nice organization will have a happy surprise.
Tracking my investments is one of my favorite hobbies. Maybe I'm weird? Okay, definitely. But financial news following is fun!
I think it gives you a more balanced view of the going on in the world? You can't afford to be heavily biased on any one political philosophy, because the market is ultimately objective?
It's the first time I have heard anybody talking about using HSA for long term care. Paying medical expenses yes, but not long-term care. I think that would get people more interested in holding on to them during their earning years (when the opportunity presents itself). Maybe you can even do a video on HSA strategies, etc.
I own STRs and I plan to switch homes too once kids are in college. So I’m with you there. But the one potential flaw I see in your plan Azul is that one of those houses are in a ski mountain and you plan to occupy it during the ski season. I haven’t come across any good ski places that rent out well during the offseason. Tahoe is one that has a decent offseason occupancy rates and even that is only around 40% in the best of locations. To pull off what you are talking about, you either need to buy in all year round markets like Hawaii, or occupy them in offseasons that don’t overlap.
You are the guy I wish I knew when I was more young.
Based on Monte Carlos the 60/40 vs 50/50 is just not substantial for the risk.
He has a high opinion of his stock and bond picker… If he doesn’t care to beat the index, then he should just buy a single ETF or maybe two and save the one percent that he is going to give the planner, heck with that savings he could even go more conservative as you suggest at 50 50 instead of 60 40
@@michaelcharach Well said. Thought the same.
There is potential for considerable wealth increase with the correct strategy. I want to know; How can one take advantage of compound interest and potentially grow your retirement savings/net-worth to about $1m over time?
An effective strategy serves as a cornerstone in an investor's portfolio. As the level of risk increases, so does the potential for reward, making it essential to seek advice from experienced professionals for making sound decisions.
Precise asset allocation is crucial, with some employing hedging strategies or allocating to defensive assets for market downturns. Expert guidance is vital for success. This approach has kept me financially secure for over five years, yielding almost $1 million in investment returns.
in times like these, it's crucial to be cautious and not rush into the market , Who is this your FA , my portfolio needs urgent attention , been a lot of loss.
Karen Leigh Owens is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
I appreciate it. After searching her name online and reviewing her credentials, I'm quite impressed. I've contacted her as I could use all the help I can get. A call has been scheduled.
I have some time to think this through, but can you speak more on helping your kids? Is it just with college, or college + down payment on a first home? Something else? Thank you!
I don't qualify for an HSA, but that's a great thing! I have Tricare and if you know about that you know it's far more beneficial than HSA.
We're 100% stocks today and will be during retirement. It's not for everyone, but it fits our situation. We have a military pension, a federal employee pension, and a VA disability. Add our 2 SS (not always figured in) and we'll have $130k or more in annual pension income, $180k if we had SS.
I would like to think living off dividends is possible, but I recieved a wake up call last year with AT&T (T).
I hold a lot of T, and was happy with it , and why not? They had raised thier dividend every year for 36 years, they were considered a bellweather stock, Dividend Aristocrat, a stock for widows and orphans, because of their dividend, which was around 7%.
In 2022, the Dividend Aristocrat cut their dividend not quite in half. Surprise!
Dividend cuts can and do happen, even to the "Aristocrats", because sometimes their management makes bonehead decisions they can't recover from. 😬
I feel your pain. ATT stock is less than half its peak value. My lesson was from ATT. My dad’s lesson was from GE. Don’t chase dividends, just invest in good value stocks like BRK-B or index funds and plan on selling some shares on an as needed basis to fund retirement.
I wish I had the confidence in being able to find a financial advisor that could make safe recommendations that you do but I've never found one. Ever. I have more confidence in the discipline of Berkshire Hathaway or just holding the S&P than any advisor. So I'll just diversify, diversify, diversify and pray. Thanks for the video. Great advise. Especially helping your kids when it will have the most impact! That is fantastic advice.
Please explain what is a "fee only" advisor? Is this a 1% fee of your investment to the advisor? Or is it a one time fee when you sit down with them? I am guessing it is a flat fee not a fee on what your investments make??
This is typically a flat fee as a percentage of your assets being managed. 1% fee of a million dollar portfolio translates to $10,000 each year in fees.
@@BarbellFinancial Thanks for the explanation. I wanted someone to verify.
@@BarbellFinancial And what should I expect for that $10,000 fee each year?
@@Rottingboards The advisor will manage whatever money you direct to them and invest it on your behalf based on your risk tolerance and time horizon. Most likely their returns won’t beat the market average, especially when factoring in the fees.
@@BarbellFinancial I wouldn't expect them to beat the market average since it is a retirement account and they are trying to play it somewhat safe. Thanks so much for your responses.
Great video! It's like you're in my head. Fee only financial advisor tip is priceless. It would be really nice if you'd do a video on how to take care of the children while you're alive. Annual tax free gift amounts, etc. I don't think a lot of people understand how to effectively provide for their children while avoiding tax implications while they're alive.
Yes, please
A six month lease in a ski town in the summer, and a beach town in the winter? Good luck with that . . .
Trying to rent two houses on a rotation, sounds too complicated.
It's not Complicated. I live I'm FL six months and a day, and AZ six months. Rent out each when I'm not there and cover all my living expenses. Of course, it helps that I was a property manager before I retired so I have the know how.
@@landeeld9596Yes, it does, but for the rest of us, it's too darn complicated!! We're not property managers!! Simple, simple, simple!!! No one lives forever.
@@landeeld9596 Rent how? Not many people would rent a place for only 6 months. You can't keep kicking out tenants every 6 months. So you do short lets on airbnb? 20% to airbnb, 20% tax, 20% for someone to run it for you .. leaving you with 40% of the headline rate. I can't see how to make it work- how?
I’ve watch several of your videos and you’ve gone against what you advised, which is understandable because you more than likely in or above average group than in the median group. Thank you for your videos.
No I watch Squalk Box every morning. I use that information and balance my portfolio. I do snag some T-bills a few months ago when it hit over 5% (short term) and purchased some nice dividend stocks that pay well will low risk in known buissness. Sorry I watch my portfolio about 20 minutes a day. I sleep well. I have maintained my balance since retirement and have traveled a lot of the world. Oh most "normal people" do not have 5000 sq feet homes, more like 1900 sq feet so you are a different catagory
My stocks/ETS for the long haul: SCHD, COST, UNH, GOOGL, & AMZN
Please put some example numbers on the screen on what a fee only advisor should be getting. If I have over a million dollars and my fee is 1% is that too much of a fee? What should they be doing for me?
I have been taking care of my main tax deferred portfolio until recently I handed it over to my financial advisor. He had been taking care of a smaller account and was charging a 1% fee on the portfolio. He offered to only charge me 0.7% for the combined portfolios. They go over my investments annually but I can call them at anytime to discuss any changes I may want to make or any questions about finance or what the markets are doing.
Great plan bro. I'll turn my asset management over to an advisor in my 70's before age related memory disorders set in. Ameriprise has some monitoring features for older at risk clients that are prone to scammers....
Renting out your home? No way... You just dont know renters.... Picture 2 dudes But-Fing on same bed you and you wife sleep on.... No way. Not worth it. KInda surprised you would go for that easy buck option. The trade off is not worth it.
Hi. Love these videos. Is there anyway you can block these shill commenters who give names out for financial advisers? I notice a lot of them on your site and am afraid some people may not recognize them for what they are.
Agreed.
8 hours per quarter seems like a lot. I set aside an hour in the morning on the first of the month to review balances and update some spreadsheets. It's more like 30 minutes, so 1.5 to 3 hours per quarter. Maybe an extra 1-2 hours for tax filing per year. I think I've only rebalanced once or twice in the last decade after reviewing.
But I'm not retired yet, just borderline ready. I'd automate any withdrawals though, so that wouldn't require extra time.
Thanks for sharing, Azul. God bless you.
You have encouraged us to get our retirement portfolio together. I can’t thank you enough.
Speaking of helping kids now (when they really need it) as opposed to later (when it may be more of a "blessing"); we have been able to help all three of our girls immensely with money now; mostly in the form of paying off student loans. For this they have all been so grateful. One of my daughters has been in school her whole life, but she is almost done; she is currently taking her Ph.D in Cognitive Psychology in New Zealand. Some of her friends think she is "spoiled" because we have helped her so much, and they have commented that to her, but from our perspective why not help them? We have the means and it sure helped them. Nice to come out of a doctorate progarm with no student loan debt.
Very nice game plan, thanks? One question, why corporate bonds vs short term government bonds?
I plan on living off dividends I don’t want to worry about CNBC or the 4% rule
I’ve heard other UA-cam advisors recommend a good amount of cash to be used during down market years. Are you planning to have your 4% being purely dividend income?
I love my HSA. When I found out I could buy stocks with my HSA money vs. just keeping it in the cash account, I took 2/3's of the money and put it in an ETF. I have never had to touch the ETF money yet (been retired 6.5 years) and the money is growing and growing. I use the cash portion to pay any out of pocket medical/dental expenses. I recommend anyone to fund an HSA.
Watch out for expenses on an HSA. A lot of times your employer is eating those and when you are no longer with them expenses can be high. But the nice thing is you can go back to expenses to may have paid for after razor just move it to a better place. Everyone’s situation is different but just look into it and act accordingly or seek advice.
@@Carvewater I've been retired for 6 1/2 years. Haven't had any problems. Thanks for the head's up though.
@@9liveslisa that’s great. All plans are and structures are different. Just something to always look out for. 🙏
I love your all of your unique perspectives, and this video was my favorite! Keep up the GREAT work. Thanks
Hey Azul, as always, nice video.
I've taken the approach where beating an index wouldn't be reasonable (as you say), but ~ matching it is very realistic using some high-quality Vanguard or Fidelity index funds. Low expense ratio and no management needed. There are very few advisors or individual stock portfolios that can beat them. I like your short-term idea.
I've been going with some very short-term CD and bond ladders that have been doing really well due to the current interest rate rises; that won't last forever, but for the next year, I think they will do well. Finally, bonds have done pretty poorly the past 5 years, so I've gone with the index funds and a couple of years' worth of short-term liquid things, as mentioned CDs and bonds.
Obviously, to each his own, and of course, YMMV... 😁
Yeah, looking at using some ladder CD's in place of a portion of bonds in my portfolio.
Hi Azul, are you a fan of Fixed Annuities in this current environment? For example 10-20% of a portfolio.. great video thanks Azul!
how important is LTC insurance. i have seen a lot of bad policies -- expensive and not very useful.
Good info.. It does not match my retirement plan tho.. I want SAFTEY in my plan.. the 60/40 in retirement just does not work for me in retirmenent.. that posistion can lose u alot of money in a big downturn while u r withdrawing money making it even worse just like 2022.. I want fixed income safe money and fixed indexed annuities that have no chance of loss of principle but might be better the current interest rates.. I want a worry free retirement and a 60/40 portifolio is a worry in a down market.. just as we saw in 2022.. if I lose 20% of my money early in retiremet like 2022 and withdrawing 4% that would be a big problem...
Hello Hazul. My current portfolio is 0bond and 0stocks but only real estate and wine investment. Your video motivates me to start buying stocks and bonds. I didn t know dividends can finance a good portion of your retirement. Please continue your video as they are inspirational to me.
Here is my contrarian's opinion which is based on my own experience. I retired in 2020 at the beginning of the pandemic. I was 65 years old and the time and was eligible to pull out my pension out which was based on two "chunks", One chunk was a lump sum which most of it was IRA rollover and the other one is a monthly pay. Both "chunks" were, let's say, very generous. I rolled it over to an account at Fidelity, assigned the account to a very reputable Atlanta fiduciary firm and told them that I'm looking for a conservative investment which was mainly to keep the value of the money and receive some annual dividend. At the time, I really didn't need the money. My monthly pension income was good, my wife was working and still is, and at the time, we had seven rental houses that brought in a good chunk of money as well. However, after two years watching my Fidelity account stagnant and practically losing money to inflation, (About $40K in two years), I requested our accountant to do an analysis as to how much taxes I would have to pay if I pulled out that money out. My goal was to invest that money in another rental property. The accountant came back with a reasonable amount, I pulled out that money and added another house to out "Stable". We bought that house cash so aside from the usual expenses (Upkeep, taxes insurance, management) we don't have many expenses. and the rent is great.
My advise, especially to young people, invest in income real estate instead of stock, bonds, etc. Sure, for in long run you would probably make more money in stocks, but the equity in real estate, like in stocks, from a retiree perspective is meaningless. What is important, is the monthly income it generates. Real estate also have lots of tax benefits and if you cannot afford to buy real estate were you live, buy where you can afford. This is a vast country, and there is always demand for rental everywhere. Buy small, and let the tenant pay your expenses, whenever you can afford, buy more and by the time you retire, you'd be sitting on mortgage-free properties with a great income hedging against inflation.
I was a landlord for 13 years (we lived in the same house with the tenants) my husband got fed up with the tenants so we sold it 20 years ago. I’m supposed to be inheriting a house from my mom which is in NYC in an outer borough and I am debating whether to keep that house and rent it out or sell it. Rental mkt is good unless you get a bad tenant. Then you have problems.
@@jdenino6022 First, a rule of thumb, never landlord yourself if you can afford it. When I started investing in real estate about 15 years ago, all the properties I bought back then, were out of state. At the time, I lived in California and investing there did not make sense and was unfavorable. Second, if you inherit a house free and clear and you are not require to pay any "Death tax" as they call it, I'd say update the house to the best of your ability. The house that I bought in exchange for my IRA, was an inheritance. That house was owned by the seller's father. On top of the selling price, I had to spend about $50K to bring it up to a rental standard. Usually houses that are owned by retirees for with limited income, and for a long time, are mostly neglected and need some work. Doesn't mean you'd need to spend as much as I did, but it will need some work. In these times, it will be easier to rent out than sell. Find a reputable property manager and so you won't have to deal with the day by day operation, and you'll find soon enough that having that income is wonderful.
My wife and I own five rental properties, no mortgages. The rental income will be more than enough to meet our retirement needs which will be in ten years when my wife retires. We also have a Dividend portfolio which will be used to buy more rental properties during retirement at 50% down. I love property investment. I got hooked on it after our landlord unfairly evicted us 14 years ago.
@@robocop581 More power to you, great job!!
Azul, could you please comment on how and when to best gift adult children from an overfunded tax deferred retirement account. Thank you!
I have had a second home for almost 2 decades. I do Short Term Rental on it during the 7-8 months a year I am not in it. I am considering renting my primary the same way when I retire for the 4-5 months I am not in it
As usual, I feel you’re speaking directly to me. I would add another step to life long wealth building, and that’s 4. One Mortgage, don’t fall for the Refi trap. You’ll never pay off your house if you keep hitting re-set on the amortization schedule
We used refi to our advantage. Originally had a 30 yr mortgage. Refi'd when interest dropped the low 3% with a 15 yr mortgage and made double payments on the principle each month due to the "savings" from the lower interest rate. Paid off in a little less than 7 years. Overall, paid off the house in 19 years with the help of the refi. The trick is to use any reduced monthly payments from the lower interest loan and apply it as additional principle payments....or invest it. But don't spend it.
@@summitsusie I did nearly the something, additionally, I applied a second down payment at the time of the 15yr refi loan, which made my payments the same as the 30yr I was replacing. Then did the same as you, added extra each month. I was paid off in 18 years total.
@@StreetFlys awesome!
Yeah I had the two house thing for awhile. Didn’t work out.
Do a video on how much a specific portfolio tends to generate in dividends, interest. Thx
Love that you referenced Die With Zero.
Azul, you know that if you hold off on social then you break even after you turn 78 but that is if you don’t do anything to your money. What if you collect social security early and invest in the market wisely?
Things are a bit different in Australia . Our kids usually go to a local university and live at home till they are in their early to mid 20s. We. Don’t think about downsizing till much later. I enjoy your videos.
I'm a retired cop since 2011. I dealt with a lot of tenant, landlord issues which were actually for small claims court. I since became a millionaire through my stock investment and now own 2 smaller home in Hawaii and a townhouse in Las Vegas . I don't rent, because of my negative experience being a cop
Azul, Im a Canadian and love your videos. Could you tell me where you have a resident in a warm climate?
Opinions about Wellesley(VWINX) from Vanguard. Realize it’s weighted more towards bonds.
Look into Wellington as well
@@kevinbarrett3706 Yes, I am aware of Wellington. Not as conservative and more stock weighted.
People frequently use the term “fee only financial advisor.” I took this to mean that you pay someone a fixed dollar amount and they review your situation. I asked a relative about their “fee only…” They said that their investments are under that firm’s control and that they pay a fee based on the assets under the control of that firm. They noted that the firm has a fiduciary obligation to them. This doesn’t make sense to me. Am I missing something?
unfortunately, financial advisors try to conflate things. There are really two major competing organizations: NAPFA and NAPA. The former emphasizes the benefit of fee-only advisors vs NAPA which tend to be commission based. Fee-only means flat fee, hourly/retainer, or % fee of assets under management (AUM). Azul has done a video about what fee-only means, and makes the point firms will bias toward moving clients into a %AUM structure vice flat fee or hourly/retainer for the firm's cash. To me that is the firm looking out for its self interest not the clients, which is a bit hypocritcal when the Financial Adivsor (FA) at the firm is saying they are a fiduciary. Two things can be true at once: the FA can be a fiduciary while the firm has not such obligation. Firms generally give client an option to grant the firm full discretionary or non-discretionary trading authority. I would never sign up with a firm that mandates full discretionary if you sign up with the firm, because there isn't an exigency that should require a FA an ability to immediately trade your assets without running it by you first. If your FA is putting you in such highly volatile and risky investments which require no notice discretionary trading, I would run away quicker than the road runner. Coincidentally, the firm azul is a partner, shareholder, and adviser does not give clients the option of full discretionary or non-discretionary: the firm requires full discretionary. I also think the focus on fiduciary is misleading. There is ethical fiduciary and legal fiduciary, and again just because your FA may be acting as your fiduciary doesn't mean the firm is. Even if you ask the FA if they are fiduciary 100% of time, you need to also get it in writing the firm is, too. The problem with legal fiduciary is that it is very difficult to prove fiduciary violation. I have never heard of an investment advisory firm or FA say hey, you know what after 10 years of taking 1% AUM from you, we actually think it's in your best interest to just put you on hourly/retainer rather than %AUM, since we haven't done anything to your portfolio except withdraw your RMD and of course or 1% fee.
Really appreciate your videos Azul!
I take home more in SS than if I kept working. No state tax no fed tax. IRA is under 100k and I don’t use it. Also have a pension.
This was your best video so far!
Great info and great approach. Thank you
What are your thoughts on the viability of SS, given that you plan to wait for full retirement to draw (believe that's 70)? I.e., given where the Economy is, with Debt/GDP ~1.29 as it was during WWII, and such a lack of willingness for the USG to reach a deal on budget discipline, do you not fear a SS "haircut" is inevitable?
Retirees vote. No real cut for anyone near or in retirement.
Another good and very honest video - thanks.
@Azul. I came across another UA-camr who has written a book centered aroumd retiring on (just) the Vanguard Wellington Fund, I presume based on it's stock-to-bond allocation (approx 65/35).
What do you think of this? Sure sounds easier than having a few-only advisor buy individual ETFs and bonds and having to rebalance over time
I always enjoy your videos, but I found this one particularly interesting!!
Why is Azul still working in his 60s and telling people to consider retiring in their 50s? Seems like a disconnect to me.
So in terms of hiring a fee only financial advisor, would that someone also manage your portfolio? And if so what kind of fees are normally charged? I assume there is one fee to make your financial plan, then another fee to build your portfolio and manage it. Correct? Last question or comment. Most advisors want to charge you 1% of AUM. Any recommended FO companies?
Consider a 2nd house in Mexico. It's a wonderful country and the cost of living is less than the US. I have a house in the SE US, and another in Cancun on the beach.
If all my income was dividends I would pay taxes. If I have a mix of dividend income and capital gains from selling fractions of my stock holdings I pay no taxes as the capital gains would fall below the deduction. Going heavily into dividend stocks doesn't seem to be the best portfolio to me.
good stuff Blue, thanks for sharing.
Azul, what are your thoughts on Bitcoin and digital assets? Especially in retirement.
Thanks for the video - I have been enjoying them. One questions though - Why would you go with individual dividend paying stocks rather than a dividend focused etf or fund?
Hi Asul, love your content. But let me understand: an ex-financial adviser will outsource portfolio management, so that he can focus on being a property manager for two seasonal rentals...and that is your idea of "worry free" retirement?🤷🏼♂️🤦♂️😉 So you will swap doing what you know how to do for soing what you don't know how to do, thus risking potentially major expenses and costly mistakes. And having a second home that nobody but you lives in is somehow less optimal than ahving two homes that a bunch of strangers live in and have high turnover.. In what version of a worry free, sleep at night, easy retirement does they make sense? I love the American version of downsizing of trading one full time home for two part time homes. 😆 Sounds like signing up for way more worry than you deserve. Best wishes and hope you reconsider.
I love owning our two small homes in different climates.
Great synopsis and plan. One of your better videos
Reading that book right now!
Interesting that you will focus on dividends. They are just part of the total return and a forced liquidation of your portfolio imo.
Question:
Assuming you have enough..Is it okay to live off of cash up until you can draw soc sec/401k/ira ?
Let's say you are 50yo, have enough cash per mo/yr for 10-15yrs
Other than health ins, what would you consider for expenses? (Zero debt, but the usual monthly expenses)
Azul rules. This is the path.
You are going to spend a lot more time than 1 day per quarter managing whatever your rent out. Could never let go of my financial situation that way.
Can we use dividend stocks or ETF instead of bonds for our asset allocation growth stocks and dividend, no or little bonds