Let’s say you have, give or take, $70,000 in your Wall Street investment account, or 401K. This account generates $500/mo in income. You’ve been adding $1,500/mo out of your after tax salary to the account, resulting in a monthly investment of $2,000 — 25% of which doesn’t come out of your family earnings from work.
Question: 74 months down the road, will your original $70,000 + $500/mo (monthly cash flow/dividend) + $1,500/mo from salary(s) end up as — $255,000 + almost $1,600/mo in cash flow?
No? Not even close?
How ’bout if we cut that $255,000 to $200,000 — and cut the cash flow to, say, $1,200 a month?
Still no? Do you know of a stock paying non-stop dividends in the 5-10% range, year in and year out for two to three decades? I don’t.
In fact, even if the Wall Street (WS) investment account ended up worth $255,000 — and the (Spoiler alert!) real estate investment property ended up at $200,000 — would the WS account deliver, year in and year out, a 5.7% dividend? Shake your head no, cuz we both know that’s a pipe dream.
In other words, if the real estate investment property lost over 20% of it’s original value while it’s Net Operating Income (NOI) dropped by around $25%, it’d still completely out perform your WS account when it comes to retirement income.
And, if I recall correctly, isn’t retirement income the name of the game?
Now, tell me again how well your 401K is doin’?