How to “Really” Enjoy Your Retirement – And Why Most Americans Won’t

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This is very personal to me. In large part, the last three years have been spent addressing the problem we all see with Boomers, which is their horrible track record when retiring. That is, those who can retire. Many have no choice but to work ’til they can’t. A huge majority say they’ll work after retirement due solely to financial need.

This gripes me no end.Β 

While retiring at the rate of 10,000 every 24 hours, the vast majority simply don’t or won’t have the income they envisioned decades ago, regardless of the hard work and discipline they so consistently demonstrated. For me, this is heartbreaking on more than one level. What makes it worse is how completely unnecessary it is.

Imagine you’re retired with Social Security of $1,500 monthly, a free ‘n clear home, and $100-500,000 in savings/or your 401k/IRA. If the lion’s share is in your retirement plan, the typical return is gonna be less than 5% annually, usually around 4% give or take. Let’s say half a million bucks is your reality. If retirement is around the corner, how does $20,000 a year before taxes make ya feel? Are ya gettin’ all warm ‘n fuzzy? No? You ain’t the Lone Ranger. Retirement is beginning to look a lot more like a life sentence for many in this exact position.

But, What If . . .

. . . you were able to safely acquire discounted notes yielding 12-15% cash on cash?

Higher if they should pay off early. Imagine if every $100,000 you had at retirement was earning say, 13% a year. In the above scenario that would generate an income of around $65,000 a year. That’s what we in the business call ‘Having an empirically measurable impact’. Let’s stop and review the difference in the life of this Boomer that this change would occasion. This couple would have gone from $38,000 a year before taxes, to approximately $83,000 a year pre-tax. Reflect onΒ the difference in lifestyle that would allow. Financial anxiety is significantly reduced. Travel to see family and for fun is back on the table. The every day cost of living is no longer a stressful daily grind.

But, What About the Risk?

Experienced and professional note investors understand what it takes to mitigate the risk in buying discounted notes secured by real estate.

Still, understand that double digit returns don’t come without risk, and don’t ever let anyone tell you otherwise. It’s called risk capital for a reason, right? Right. OK, so you’re interested in hearing more. Where do I go to find notes that won’t end up being the end of my retirement dreams? And how in the heck do I decide which notes to buy? If you’re not an experienced professional, I’ll offer a couple rules to follow and never, as in never ever, break.

1. Don’t operate on the Do-It-Yourself model. DIY with notes will put most folks in the financial ditch before they realize there even was a ditch. The only thing worse than retiring on SS plus a lame return on a relatively sizable sum of money is losing most if not all of your sizable sum. DIY is one of the fastest ways to make that happen. Read all the books you want. Go to all the seminars too. Then ask yourself: Am I willing to bet my quality of life after retirement on what I learned by reading and note taking in seminars? No? Excellent answer. πŸ™‚

2. Invest in and buy notes from funds specializing in them. Duh. Captain Obvious rides again.

I wrote on how notes can work for you in this post just a few weeks ago.

Gettin’ from Point A to Point B has been far too difficult for the typical investor wanting to include notes as a vehicle to retirement. But first, please allow be a chronological digression.

From the 1970s on, my firm brokered both real estate investment property and discounted notes secured by real estate. In the early 80s Dad got real serious at lunch one day, bringing up what both of us already knew. I was under time pressure virtually every day just keepin’ up with both the real estate and note needs of our clientele, and their Purposeful Plans for retirement. He made the judgment call that from that Friday forward, we were only gonna offer one of those services. At first I was stunned, but as he laid out his case, I had nothing with which to retort.

A Lesson We All Needed To Learn Young

When I said we could hire someone to do notes, he smiled. “Name one guy at your knowledge level or higher that you trust like family.” I immediately knew I was dead in the water. Yet, as I said at the beginning, I’ve spent the last three years searching for my own Holy Grail β€” note experts in the elite class of professionals. And I found ’em. One of the most knowledgable writers here on BiggerPockets, Dave Van Horn, is indeed experienced, knowledgable, and very skilled when it comes to discounted notes secured by real estate.

In fact, here’s the most recent evidence. It’d take 1,000 words to describe all the places I turned down as a source for Boomers to acquire these sorta notes. But Dave’s firm, PPR, is my choice. I strongly recommend you check them out. Their continued success is based upon the only thing that should matter, the reputation they’ve earned through years of performance on literally thousands of notes.

Believe me, I never in a million years thought I’d be sayin’ this. But note funds, at least in my professional opinion, are the way to go when it comes to investing in notes secured by real estate, and bought at a discount. The very fact that these funds are regulated by the SEC, and remain in existence only due to the earned reputation of the fund managers, is why I like ’em as a much preferred source. Sure, you can buy notes in many other ways and do exceptionally well. It matters greatly that the reputation of fund managers is so crucial, as it sets the bar for performance. Funds only succeed as long as they perform, and their reputation remains solid.

Notes Can Make a Huge Impact for Boomers.

The difference in income can literally be profound. I started this quest the day after a retired couple told me their story. The short version is, due to their refusal to eat into their nest egg’s principal, they could no longer afford to visit their son’s family and grandkids in a contiguously neighboring state.

At first the son sent them funds for the trip, during the holiday season, but as times got tougher, and his own family budget felt the pressure, he could no longer afford it. Imagine being retired, with six figures in the bank. Yet, you’re so afraid of eating into the principal, knowing the consequences of that slippery slope, that you literally can’t visit your grandkids on Thanksgiving. The difference for this couple in a note fund, even if they only benefitted from the preferred return, and never bought a note, would be more than significant, to abuse understatement. If they did buy some notes the impact would deepen.

Nobody should spend decades doing all the things they thought were right, only to wind up as prisoners in their own home. And that’s exactly what’s happening, and will continue to happen to those in my generation. For many Boomers, it’s my heartfelt belief that note funds could be their solution. Surely real estate wouldn’t be the answer at that point, as time is no longer their friend. And frankly, at their age they need more bang for the buck, and less time spent watchin’ over things.

OK, I feel better.

Fund offer preferred return, the ability to acquire your own notes, and the relatively superior safety of knowing their reputation is everything to them.

Take a look and see for yourselves. Retirement is for enjoying life to it’s fullest.

Photo: keithreed01

About Author

Jeff Brown

Licensed since 1969, broker/owner since 1977. Extensively trained and experienced in tax deferred exchanges, and long term retirement planning.


  1. Hi Jeff,

    I checked out the company you talk about in your post (PPR) and they offer warranty to the note investors. Does this warranty make it almost risk-free?

    Also, while I definitely like the idea of the note fund, these are only available to accredited investors according to PPR. Do you know why it that? Is there a way around it?


    • Jeff Brown

      Nothing makes the funds approach risk free, Nick. Very small risk investments, take the 10 year Treasury note for example, are likely to yield even less than the ultra conservative 4% ‘risk avoidance’ return most get from Wall Street products in retirement. That 10 year note is yielding less than 2.7%.

      Everything is relative, and the warranty found in many note funds simply can’t be had on the street. Furthermore, when buying notes in these funds, there’s a solid track record of performance behind the fund managers. In PPR’s case, they’ve literally done thousands of notes.

      • Jeff,

        What is this warranty then? If my principal is guaranteed, it is at least “cannot lose” investment. Am I missing something here? I mean if I could buy a stock and know that I would always be able to sell at the price I paid it for, it would mean “risk free” to me.

        Also, what about notes funds being offered to accredited investors only? Why is that?


        • Jeff Brown

          The answer to your second question is that the SEC requires a certain level of ‘investor sophistication’ to invest in these funds, based upon the way they’re structured. It’s wholly an SEC thing.

          The warranty goes something like this. Let’s say you spent $100k on a note. 2 years of timely payments later, the homeowner gets laid off of work, and stops paying. One of your options would be to foreclose, and that option, if the note was purchased wisely, might be the best one. On the other hand, you might opt for having the fund managers take a shot at once again working with that homeowner to ‘right the ship’ so to speak. If they’re successful, you’re back in business. If not, the warranty can come into play. If your total of received payments were $20k, the warranty could make you ‘whole’ by them taking the note back from you. Then, you’d be granted an $80k ‘credit’ towards acquiring another note inside the fund. OR, if you preferred, that $80k could be given back to you in cash. Your choice. Make sense?

    • Jeff Brown

      I forgot to address your accredited investor question. Yes, to officially be inside the fund with your investment capital, it’s required by the SEC that you be qualified as an accredited investor. However, some funds allow ‘outsiders’ to partake of the goodies, and I can help you with that if you wish.

      • Hi Jeff,

        Thank you for the warranty explanation. It makes perfect sense and falls into my definition of “risk free” – as long as I don’t lose principal it’s risk free for me.

        As for the fund of notes, I guess I am wrong thinking of it a mutual fund of notes (e.g. 100 notes split in 100 pieces each and sold to 100 investors). So the fund in this case is a pool of notes available to a group of pre-registered investors but these investors still buy notes one by one, correct? Then how is it different from an investor buying a note from non-fund entity from the SEC perspective?

        I looked at PPR web site and they sell individual notes as well. Some of the notes pay 15-20% and that is another thing I cannot wrap my mind around. Why would someone sell an asset that pays 20% interest instead of keeping it for themselves? Where is the catch?


        • Jeff Brown

          You’re correct, Nick, the investors buy separate notes. Title is then transferred to them or their designated entity, i.e., 401k. Once a note is purchased the investor’s capital is now out of the fund (to the extent of the purchase price), and the note also leaves the fund, as it’s now the exclusive property of the purchaser.

          Asked Dad the same price question, Nick, just before I acquired my first note, back in ’76. His answer has stood the test of time. It’s the market value, plain and simple. The perceived risk, plus all the related factors, LTV is an example. Whether they’re a senior or junior lien is another example. If they could sell it for more, they would, right? Right. πŸ™‚

          The notes you’re seeing on PPR’s site are, generally speaking, 2nd position notes. They sell at relatively deeper discounts due to the higher perceived risk, when compared to 1st position notes. The notes about which I’ve been writing are 1st position notes, or ‘senior’ if you prefer. Most investors prefer 1st notes, though I’ve owned many, many 2nds, 3rds, and even lower. In fact, my first ever note was in 4th position. πŸ™‚

          Again, the notes you saw on PPR’s site were no doubt junior liens. But your question about why a note owner would sell a 20% note yield has a dangerously false assumption buried in the question. The note seller is NOT gettin’ 20% yield, the investor is, due to the discounted price they paid. The lower the purchase price, the higher the yield. It’s entirely possible to acquire a note with a 6% interest rate that would yield over twice that to a purchaser gettin’ a discount. Make sense?

    • Jeff Brown

      Hey Jon β€” Definitely NOT talkin’ about REITs. πŸ™‚ These are funds specializing in notes secured by real estate. The investor can choose to buy notes for their own account, or for other entities they may control. Once the note is acquired, they own it outside of the fund like they would any other note purchase. The fund buys non-performing notes from lenders around the country, then applies their highly specialized expertise in making them ‘re-performing’. Once that’s been successfully accomplished, the note goes into the fund, and the fund’s investors can then choose to buy them, first come, first serve. Make sense?

        • Jeff Brown

          PPR is my favorite example, which is why I went with them, Jon. But they aren’t the only game in town. They’re just the only ones I’d recommend. That isn’t to imply in the slightest that others aren’t just as solid.

  2. I am 36-years old and looking to maximize my investment future. I have learned a ton of knowledge on Bigger Pockets of which I am grateful for. I have been looking into advice given to me by Mr. Dave in the realm of HSAs and Self-directed IRAs in another blog. I see he is mentioned here as well. That being said, the nature of this blog is with boomers in mind. Can someone my age look into notes as well?

    • Jeff Brown

      Hey Levar β€” Boomers are just the generation most in immediate need. Those in your generation/age, will do infinitely better than your parents ever dreamed of, buy starting now with discounted notes. However, they should be merely a piece of your investment strategy. There are ways to combine the benefits of real estate and notes in ways that will enhance both when it comes to retirement. A 36 year old will blow away a 56 year old, all other things being equal.

  3. Jeff,

    With articles like this you are going to rob Home Depot of a lot of future senior employees.
    The older guys in any department are better to talk to then those young whipper snappers who don’t know what end of a hammer to use.

  4. Jeff,

    I understand the math behind the notes (e.g. high interest comes from a discounted principal) but I have hard time understanding seller’s motivation to sell a note at a discount. If they do that they will lose principal, don’t they? So, why would they sell instead of trying to “re-perform” the note like PPR does?

    Same goes for companies like PPR – if they acquired a good performing note at a discount, why would they sell it to me, for example, instead of keeping it for themselves?

    BTW, what is a typical realistic ROI on a 1st note and what is the risk (assuming there is no warranty)?


    • Jeff Brown

      These are non-performing notes held by institutional lenders, Nick. They’re happy to get them off their books. But as to even private investors selling notes, they sell for as many reasons as there are people. And when they do, it can’t be for more than the market allows. However, even when private investors sell notes, it’s no different than selling real estate. It’s worth what it’s worth, no more, no less. Don’t get hung up on the discount. Notes have been heavily discounted since I bought my first one back in the PaleoAge. πŸ™‚

      Note owners simply don’t possess the skill sets required to get non-performing notes back in the game. They just don’t. It’s a very highly valued area of expertise, that is not universal by any stretch of the imagination. Those who do know how are in much demand, as attested by PPR. As to why folks like PPR don’t just keep the notes they ‘fix’, trust me, they do. But they can’t keep everything, as there’s just too many of ’em for a few people. We’re a huge market. PPR has literally repaired thousands of notes. They can only keep/afford so many for themselves. πŸ™‚

      The risk for a note purchase without a warranty begins with understanding there’s no ‘typical’ note. What’s the location quality of the security real estate? What’s the LTV from the note investor’s point of view? Much of the risk resides in the reputation of the seller, and/or their broker. What’s their track record, if any? If the note isn’t local to you, do you believe your research? Or, will you need to fly there and check everything out. Meanwhile, the note could sell, or worse, you could buy it and find out what you might’ve missed later. The risk is mitigated β€” or avoided altogether by passing on the note β€” by knowing exactly what you’re getting, or not getting. Did you get the proper title insurance? How sure are you about the value of the property by which the note is secured? The returns can be all over the map, Nick. I’d say most 1sts will fall into the broad brush range of 10-16%. But even that’s misleading, due to the myriad factors involved, that affect value, and therefore yield.

      • Absolutely great piece here Jeff. I do have a question with regard to your multiple avenues of retirement avenues. I’m 32 with small capital to put to work. I’m very conservative since my employment is average at best. Since I cannot spread my capital around I feel one avenue is my most optimal choice. With you huge history of results from both real estate and notes what would make more sense with your current knowledge? I really hate just asking, but every time I read your writings I fully understand all I don’t understand. Thank you, and again great writing.

        • Jeff Brown

          Hey Eric β€” Thanks so much. I’d look to family and friends for the chance to pool your money. If you can make that happen, the group could then invest in a note. They’d then agree to bank the note payments, never spending them. Once the note paid off, years later, the after cap gains tax profits, along with the original capital and the banked payments can be used to do it again. Or maybe after that first one there might’ve been enough for each member to branch off with their share to buy their own notes. But it’s a way to get started. At 32 time is virtually your best friend. Slow but sure will get you there.

        • Thank you for the insight, seems like a very elegant approach. I know I’m at a point where I’m very enticed by a real estate passive investor, I just cannot imagine setting aside the time to make the best choice of the asset. I love the idea of pooling money, but I’m curious what amount of capital would be a productive entry point into notes. To be honest, the real question is whether notes or raising my initial capital is the smarter move. I’ve read your blog and articles here, and that is the one thing that hurt when it smacked my brain. I need more capital last week. I really do need to call you, as I’m not looking for free advice, I just truly value your years in the business. Thank you Jeff, enjoy the weekend.

      • Well… it’s getting more and more complicated πŸ™

        If an institution wants to sell a non-performing note and they are HAPPY to take a loss, how could this same note be a good investment for a buyer? If an institution could not make it work and wants to get rid of it, what are my chances to succeed? Isn’t it the same as playing poker with a bunch of professionals who will win all your money no matter how hard you try?

        Also, I had a belief all this time that buying a note at a discount means buying it below market price – pretty much the same as buying a property below market. Now I see that a discounted price is still a market price. In other words there is no instant capital gain or “equity capture” as they say about properties. If this is true, then what is left?
        What is a probability of success of someone who had no previous experience in notes and does not have a gazillion dollars for try and error approach?


      • Well… this is getting more and more complicated and a lot less appealing πŸ™

        If an institution sells a note at a discount and is happy about it, how can that same note be a good investment for me? Banks are not known for giving away free money.

        BTW, is buying a note at discount the same as buying a property below market value? I always thought this way but now I think I was wrong. Whatever price I pay it is still the market price and there is no instant capital gain or “equity capture”, correct?

        So, what is a probability of success for an investor who does not have plenty of capital for “try and error” method but still wants to make 10%+ on the money invested without losing principal and sleep?

        • Thank you, Jeff, you may be right and notes may not be for me. But then who are they for? Can you give me a physiological profile of a typical notes investor? Thanks again.

        • Jeff Brown

          Sure Nick. They run the gamut of age. I have clients gunning for notes before they’re hit 30, and clients who’s best bet are notes only, and over 50, 60, and 70. They understand that notes have sold at various discounts, based upon current market yield at the time, for generations. They realize it has nothing to do with the note(s) having something inherently faulty, built in to them. They also realize that over time, they will foreclose at some point. It happens, and anyone who tries to say different is either very new, or thinks you are.

          On the other hand, they realize the risk is real, and the key factor among many pivotal factors, is understanding where their real security resides, which is in the LTV. Foreclosing on a property valued at just 50-65% of your initial capital investment allows most folks to sleep well at night.

          My grandpa was somewhat like you, Nick. He thought notes were from Satan himself. πŸ™‚ But he was born just after the turn into the 20th century, and was plagued by what he saw, and not firsthand experience. Different strokes, etc.

        • Hi Jeff,

          I somewhat fit into that profile but have two major concerns: foreclosure process and amount of risk capital.

          The first one is somewhat simplified if a note is bought through a company like PPR, correct?

          The second is more difficult. You say “it’s called risk capital for a reason” and I agree with this statement. One the other hand to have a livable income on a 10+% interest one needs at least 600-700K at risk and if it is risk capital, then it should be only a small part of one’s net worth.
          Right now I can afford to risk 20K on notes or anything else but the absolute results won’t make a difference one way or another. It may take me 20 years to save 600K (in today’s money) but by then I would still be able to risk only a small portion of it.
          How do I change that attitude?


        • Jeff Brown

          Great question, Nick. I’d first respond with the Captain Obvious, everything’s relative. Your $20k in retirement will garner an income hardly worth the effort. At 4%, that’s $800/yr before taxes, about $66/mo. Or, you could keep saving every year ’til you have a larger sum, hoping to outlive it in retirement.

          Foreclosure is something that note investors to should take into consideration before buying the note. If taking back the property scares you, then one of two things is in play. Either you have an ill advised LTV position, or you don’t understand your position in general. But yeah, PPR will help mitigate that problem.

          If you own a note for $100k for which you paid $55k, and the security property has a credible market value of just $95k, your personal LTV on that note is a tick under 58%. If that still makes you fearful, you shouldn’t invest in notes. Make sense? If you’re like most folks, Nick, your attitude will change as retirement becomes more a reality, and less of a theoretical concept.

        • Jeff,

          I don’t mind taking a property if my LTV is 60% or better and that property is easy to sell for more than the outstanding loan balance or it is located close to me and easy to rent.

          You have a good example of LTV but how realistic is it for a performing 1st position note?

          Since I only feel comfortable with 20K but have another 200K in IRA, I may buy a first note in first year, then add another 20K from IRA and 20K from savings and buy 2 more in the next year and so on. 10 years from now I may have 650K in notes making 10+% or 65K – enough to keep buying notes without adding savings.

          It all comes down to finding the first note. Are there 1st position performing notes with 60% LTV and at least 15% interest? Can I buy a partial note if it is sold for more than 20K? Can I bring partners to split say 100K note 4-5 ways?


        • Jeff Brown

          Oh, so now we’re up to 15% minimum yield are we? πŸ™‚ I’ll stick with the 12-15% range. There’s no guarantee whatsoever you’d be able to consistently acquire first position notes at 15% yield.

          The answer to your question about LTVs at 60% based upon note purchase price, is yes, very likely. In fact it’s possible to find ’em at less than that. I have a personal ‘bar’ of 65% LTV. On a practical level, Nick, it’s unlikely to find notes small enough to support a $20k price. And yes, puttin’ groups together is fine, and not a problem.

          Here’s something to ponder. If buying a first position note with an LTV of 60% or less is a relatively safe investment, why would you spread out the investments over so long a time period? If possible, I’d do it much sooner and much more, keeping in mind your own personal comfort zone. Over the next 10-30 years, that decision alone will, not might, result in vastly increased retirement income. But that said, I understand your caution for sure.

          Am I making sense?

        • Hi Jeff,

          You’re making sense, of course. The reason I want to start small is my lack of experience with notes and desire to diversify over time and various instruments. Interests rates will rise sooner or later and that should affect note prices.

          It all comes down to the first step and I don’t want to regret it.

          I may up my initial allocation to 50K if I somehow stumble upon a note that has 60% LTV and pays 15% and matures in 5 years or less and the property is in a good location in the same area where I live (DFW). Would this be something impossible to find?

          Oh, and if my IRA is held at a traditional broker, do I need to split it and move a part to another custodian to be able to hold notes there?


        • Jeff Brown

          Nick – I’m good, but can’t look you in the eye and tell ya you’ll get a 15% cash on cash return. On the other hand, most notes payoff before the amortize themselves away, which increases the yield automatically. Also, the notes I recommend do not have 5 year balloon payments, so I can’t help you with that.

        • Jeff, thank you for replying.

          I did not mean 5 years balloon. I meant a longer term note which has 5 years left till maturity. This also means that LTV would be low since most of the principal has already been paid. E.g. the property value is 100K, initial loan was for [email protected]% for 15 years and the remaining mortgage balance is 40K. If I buy it for 25K that gives me 25% LTV and ~11% annual interest.

          What is “self-directed IRA” and how is it different from the one I have at a brokerage firm? I have full control over my IRA in terms of investment selections – stock, bonds, options, mutual funds – but the broker does not deal in alternative investments.


        • Jeff Brown

          The note you describe would not have been non-performing. Therefore the lender would never have sold it to any note fund. The original investor to whom the lender sold it, would likely have kept it. You’ll not find those notes in funds, and probably not elsewhere.

          When I first entered the discounted note arena, Nick, I bought nothing but junior position notes from local private parties. The furthest down the peckin’ order I’ve owned has been a 4th TD note. πŸ™‚ With very rare exceptions, all of ’em had balloon payments, usually in the 3-10 year range.

          A self-directed IRA is one in which you maintain control. You decide, subject to regs, in what you’ll invest. You’re not limited to the product list of the typical IRA, which is limited usually by what Wall Street has to offer.

          Go to Click on the ‘contact us’ button. Call the 602 phone number. The first thing outa your mouth should be, ‘Jeff Brown said to call you’. πŸ™‚ His name is John Park, and he’ll be able to answer your self-directed questions to your satisfaction.

        • Hi Jeff,

          I am confused now. If a note I described cannot be bought because no one would sell it, then what would be a good example of a 1st position note with 60% or better LTV and 11-14% interest? How would it come to existence?

          Also, please explain how foreclosure would work in the case of a 1st position note if the remaining principal is way below property value.

          Say, the property is valued at 100K and the remaining principal is 60K. The borrower defaults, the note holder forecloses. Would the note holder receive the title for the property or would the property be sold and the note holder would receive only up to 60K – unpaid principal?


  5. Jeff,
    Thanks for the great article; you always provide an interesting read.
    I’ve followed PPR with interest and I agree that a DIY approach with notes one could find yourself holding worthless paper. With that said, understanding some of the details of individual note investing will provide education as to the individual or group of notes in a fund. The explanation of the first, second, third positions above was great as well as the getting a note to performing from non performing. Can you shed some light on seasoning, for example what is a good seasoning period? Sure, the longer the better, I have seen several at 3 months seasoning after moving from non performing to performing. Is this considered “seasoned”?

    Gaining an understanding of the outstanding balance on loans relative to position, equity and appraised value would also be helpful. Such as, if the remaining balance on the first and second is 100k, the appraised value is 80k, is this a non starter? I’m sure there are a ton fof other factors, but perhaps some discussion on what would make an underwater series of notes worth the risk?


  6. Hi Jeff…

    Thanks for the great article. Great value there! But I must say I find even more value by reading the comments and all of your responses.

    So I have several questions for you:

    1. PPR is for accredited investors, only. Which means (a) you must possess a net worth of $1 million, not including your home; or (b) you made at least $200K in each of the past 2 years and you reasonably expect to make that this year. Can you confirm that I have this right, and that these 2 qualifications are mutually exclusive, I.e. One doesn’t need to meet them both at the same time?

    2. You mentioned there are note funds (reputable, I hope) that are available to the non-accredited investor. Can you recommend any?

    3. What’s in it for PPR if, when they sell you the note, it’s out of their fund? I guess they make a spread between what they buy the note for and what they sell it to me for?

    Thanks again, Jeff.

  7. Jeff Brown

    Hey Jim β€” Good questions for sure.

    1. You’re correct in that you need not qualify with both income and net worth. You also have the income part right, but only as applied to single investors. Married investors need to earn $300k/year. The net worth requirement is accurate too.

    2. Send me an email, Jim, and I’ll explain exactly how you can get a note from a fund without being accredited. Those who aren’t quite officially able to qualify, aren’t allowed to invest IN the fund, which means they don’t get some of the very cool benefits of those inside. However, I can show how you can still get access to the notes.

    3. You nailed it, Jim. The fund managers make the profit spread just as you surmised. They also make salaries, as you might expect.

    Hope this helped.

  8. I’m glad to see these comments unfolding, great info. However, besides just asking you questions for days, what if any quaility resources would you endorse for education. This of course does not imply DIY, but I feel very underwhelmed in my understanding of this. From all I’ve read of yours, and visiting Daves site, it seems very obvious this is a great avenue for retirement planning. What am I missing here Jeff? I see my 20k might fall short of ideal, but can it be put into play, or is that advantageous to reach out for more? Thank you for your time, and I’m jealous of Cali so much today.

    • Jeff Brown

      Hey Eric β€” Yeah, we’re beyond spoiled out here in SoCal. Though I will admit, it’s gettin’ tougher, even with the paradise-like weather.

      I’d check out Dave’s teaching products. The thing about discounted notes is that they’re not like investing in real estate. Notes are far less understood, and for good reason. They have more factors involved. But, like most things in life there comes a point at which the trigger must be pulled. Think medicine. I tear my ACL. How far do I go with intense research before realizing my real research should be what surgeon to employ? Are notes surgery? Of course not. Not even close. Everything’s relative though, and for many it’s a tough call making peace with the fact they might never gain the intricate understanding they have in other subjects.

      Notes can and are an incredible income source for retirement, especially when grown in a tax free envelope. Speaking only for myself, one of the most valuable lessons I learned from my mentors was that I don’t have to be the expert to benefit from something. Make sense?

  9. Jeff Brown

    Hey Nick β€” My only answer to you is the current/past and highly likely future reality. That is, that they’re available by the thousands. They exist. I don’t question why a certain market exists, cuz usually I don’t care. It’s fun to know, and generally speaking notes exist at the price/yield they exist due to current market factors, not the least of which is supply/demand, and relative yield vs risk.

  10. I do completely agree, the whole don’t major in the minors. I gather my time is best spent just picking up the phone and having a conversation. I am so glad to have come across your writing, they have without a doubt both given me hope and fear. Both of which we need. In my younger years, I would be flying out to meet you in person, that I can promise. Have a wonderful weekend Jeff.

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