DESTINED FOR DESTITUTE?


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There is a major shift in investment thinking. Financial advisory industry is awakening to real estate as an asset class

I just spoke at a Financial Advisor conference on using real estate to rebuild shattered portfolios.

Keynote speaker Nick Murray (www.nickmurray.com) has been the leading advisors’ advisor for 45 years. His message was simple: the business of investment advice is promoting a failing principal, that of principal protection. The need now is to protect investor purchasing power through a client’s retirement.

“The Great Depression conditioned our parents and their boomer children,” says Murray, “to think of capital preservation as the most important issue.” Once Boomer reach retirement, theory says retire comfortably on a fixed income.  With the average retiree’s worth, current spending and inflation, this means they are destined for destitution.

The only investment that can close the gap is real estate and preferably by way of direct investment in income producing properties. It is the only investment that is indexed to inflation, both on income and on appreciation.

WHEN NICK SPEAKS AN INDUSTRY LISTENS

When leaders like Murray begin to define and get behind a practical trend, this is almost guaranteed to become a market standard.

The mission of Personal Real Estate Investor Magazine is to be the magazine of record for the individual real estate investment industry. One way for us to contribute to the building of this industry is to help establish wide recognition and adoption of the value that direct ownership in real estate offers individual investment plans and the people meant to benefit from these immediate plans.

So many advisors are still talking about estate planning when at the rate wealth and purchasing power is been eroded, there is little likely there will be an estate.  Murray preaches that inflation indexed real estate income and holdings can help protect buying power…..and even more so when the principals that are common place to investor such as wise leverage, applied tax advantages and conscientious property and portfolio management converge to ensure that rental income increases and assets appreciate.

CHUCK CHUCK OR TALK TO CHUCK?

Real estate advisors and brokers earn their money in essentially two ways; for fee advice where they are paid a fee for the amount of assets under management and any portfolio growth by virtue of their wise ministrations.  Alternatively earn commissions when the broker and/or agent place their client in a recommended investment.

Traditional advisors and brokers are finding themselves out in the cold when clients find and embrace real estate investing on their own accord. Clients are finding real estate returns outperform most standard advisor investment offerings. Money goes where is treated best.  Losing client is not lost on for fee asset managers or commissioned brokers.

INVESTING FOR LIFE STYLE

When an investment advisor is willing to listen to the real numbers and not the stock and fund centric Wall Street marketing machine, the reality is that today income real estate bought on fundamentals can pay for itself. Add in the bonuses of inflation indexed real estate income, wise leverage, useful tax deductions and  prospective appreciation and stocks, bonds and funds do not yield anything like comparable returns.

“Protecting investor purchasing power is the absolute mandate for a modern investor advisor’s success,” says Murray. “Today $1.00 in income/expense will need to be replaced by $2.44 over the next 30 years for a 65 year old retiree who is expected to live into their 90s.”

Real estate is the only inflation indexed asset both in income and principal. For the 10,000 Boomers retiring everyday, (three million a year and 30 million over the next decade) the news is troubling. Aware retirees have a very personal urgency to solving this challenge.

Investment advisors and their clients are awakening to this income from secured assets. Honest real estate investment providers willing to work with and within the regulated world of investment advisors have a very bright future. Paraphrasing Reverend Ike “Help the poor (retiree), don’t be one!”

Personal Real Estate Investor Magazine shares this vision and helps connect advisors with professional performing turnkey rental providers. Can we help you?

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Andrew Waite is publisher of Personal Real Estate Investor Magazine,
the premier magazine for individual real estate investors.

 

 

 

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