Yesterday’s article on investments got me thinking … what actually would you invest in?
I’m dubious of Wall Street. After Enron, who can believe the books to really “run the numbers”?
Today’s issue of Early To Rise talked about people who roll over retirement funds and invest in real estate… in this case a Post Office building.
I’ll list the numbers in a second.
It made me wonder… what are YOU investing for retirement with?
Wall Street?
Your Business?
Something else?
How do you evaluate the relative risk in your own unique situation?
You form a Solo or Entrepreneurial 401(k) that pays $65,000 cash for the Post Office building. The taxes are $1,950 annually (at 3 percent) and the insurance is $650 (at 1 percent. The Post Office pays everything else: utilities, maintenance and repairs, etc.
Annual Rent: $7,200.00 ($600 monthly)
Annual Expenses: $2,600.00
Net Cash Flow: $4,600.00 ($383.33 monthly)
Yield, cash on cash: 7.08 percent
Return on Investment (ROI): 12.08 percent (assumes 5 percent appreciation)
And over the years, your rental income will increase, leading to greater monthly cash flow in addition to continuing appreciation.
If you stack up this conservative investment with the U.S. Government as a tenant against most Wall Street products, you can see it does quite well.
P.S. Had you ever heard of investing in Post Office Buildings before now?
I never had…
No comments yet.