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SHOW NOTES FOR EPISODE 140: 10 REASONS WHY I STARTED INVESTING IN REAL ESTATE IN MY SIXTIES
Are you approaching retirement concerned that you might not have the funds you need? Or, are you already retired and wondering if your retirement nest egg will meet your future needs and provide the lifestyle you desire? In this episode, top old dawg Bill Manassero shares the challenge he faced with those same questions and how he found a solution through real estate investing.
Introduction
Whatever your situation, I thought it might be helpful to just share my situation and thought processes and why I decided to go into real estate investing later in life. I’m here to share the good, bad and the ugly – with the purpose of educating you and hopefully avoiding my mistakes
Now, I don’t know what your specific situation. Maybe you are:
- 10 years or more away from retirement and starting to do the calculations and want to make sure you have the funds necessary for the retirement you always dreamed of
- Maybe you’re already retired and realizing you may not have what you’ll need (for the full duration) and you’re looking for a way to:
- Leverage what you have to grow it and make it last longer
- Maybe you missed some aspect of your retirement planning like, for example, allowances for long term care, that you now want to factor in
- Or, maybe you just want to increase your monthly income
- Or, maybe you’re looking at not just getting through retirement but to have something tangible to hand down or that you can leave your family, children and grandchildren – building a legacy
- Or, maybe you are just fine. You did all the right planning and you’re just looking for a better return on your retirement dollars
Whatever your situation, I’m hoping that what I will share from my personal experience will help you in the decisions you are facing.
Not Interested in Retirement
There was a period in my life when I just didn’t want to think about retirement planning. I didn’t know how to do it and I, naively thought I would never really retire. (Hello, McFly!) I just sort of ignored it. I always said (And I still say), “I’ll never retire. Are you kidding? What am I going to do? Collect sea shells for the rest of my life? No, I want to be useful and active. Use my brain. Set goals. Achieve something. To quote one of my favorite movies, Second Hand Lions, with Robert Duvall and Michael Caine, I want to “die with my boots on.” In other words, I want to always have something to do up to my last breath.
So I just sort of blanked it out. Sure, I had an IRA account that I contributed to each year, more for tax purposes, but I really didn’t sit down with one of those guys who helps people plan those sorts of things. I just kept avoiding or postponing…
Well, you know the old saying about “failing to plan means you’re planning to fail?” Well, that was me. If you don’t have a vision of what your retirement years will look like, you’ll likely drift through your senior years … and then wonder what the heck went wrong. And, you’ll end up having to scramble at the last minute.
Well, that’s sort of what happened to me. I went from corporate culture to being an entrepreneur to full-time ministry (sprinkled with world travel, being a professional musician and somethings I just don’t remember real well). Anyway, the reality was, here I was turning 60 and not in the least bit prepared for what was ahead.
My Situation
First a little on my background
- Spent 20 plus years in business – most in corporate and some as an entrepreneur.
- Started in banking – managed a bank branch in Beverly Hills, promoted to marketing VP
- First venture – started a marketing consulting firm – which became advertising and PR agency (did IPOs, professional services, technology, automotive (the Vector – fastest exotic car – aerospace designed)
- Joined another firm – automotive marketing, helped launch Infiniti division of Nissan
- Internet Boom – headed up Southern California tech organization to help get software and internet companies funded
- Joined one of the companies – A Business Portal Internet Portal (with Meg Whitman, founder of eBay, on Board) – Bubble burst
- Felt the call to Full-time ministry – Child Hope International – children’s music ministry
- Ended up in Haiti – mission to help orphaned, abandoned and at-risk kids living on the streets of Port-au-Prince – there for 12 years
- In our later years in Haiti, we knew it was time to move back to the states
- They were amazing years – some of the best years of my life – where we saw young lives transformed and God work in a powerful way
- We had had malaria, dengue fever, attempted kidnappings, my wife survived cancer (Hodgkin’s Lymphoma), we’d been through numerous government coups/rioting in the streets, Hurricanes, the big earthquake in 2010 and much more
- But we were getting older, some of our kids were growing up and moving back to the states, we had 4 grandchildren and the physical and emotional requirements needed to work in Haiti were waning.
- We knew we had to start planning to go back:
- We decided to take a one year sabbatical to pray and make sure that this was what we were supposed to do but if we decided to stay, we had to be ready
- In the meantime, we had to find people to take our place
- Get everything in order before we left
- So we left Haiti
- As we rested and sought the Lord for guidance
- It was my job to look at what our retirement was going to look like
Now, although I had tucked away funds in an IRA over the years, I had no formal pension. In ministry, we lived nearly 20 years on faith and really didn’t have any formal kind of retirement plan. The bottomline was…
I Wasn’t Ready for Retirement!
- My IRA. It had done well, picked some good stocks but it wasn’t enough to sustain us through our full retirement.
- I had to make some hard decisions:
- Where would we live?
- Our kids were mostly in California but the state is very expensive
- But my wife’s parents were elderly and they needed care (also in California) and we knew that was another reason for us returning
- We would stay
- How would I generate income?
- Where would we live?
Could I Go Back to Work?
Returning to the work force did not have a lot of options. And even though I had been in the mission field for nearly 20 years and I was in business for 20 plus years before that. I might have been able to find mission or church jobs but, because of my age, the opportunities were probably limited. And on the business side, I had a broad background: my own advertising and PR agency, helped launch Internet and software companies and spent my early business years in banking. I also started a number of businesses. But even with all that experience, it was a long time ago. A minimum wage job was most likely and that would not help me achieve the retirement I dreamed of.
Being My Own Boss
Out of all my options, I felt I could start a small business that could help us survive. I looked at various options. Online businesses were hot so I, while I was still in Haiti, I did some research and did a test run on a drop-ship business (buying on Amazon, reselling
To determine what you need to do, you need to ask yourself some basic questions…
- What do you want the rest of your life to look like. Are you playing golf or lazing around on the beach? Are you volunteering for your favorite cause or babysitting your grandchildren? Are you pursuing a long-held dream to start a business or pursue an interest in photography or crafts or lifelong learning? Of course, you can always do more than one thing, especially of you’re young and active and in good health, but no matter your circumstances, what you want to do in large part determines where you want to live, what your relationships are and how you spend your time. Just like a good paint job begins with preparation, a good retirement begins with your clear-eyed vision of what makes you happy.
- Where will you live? Most retirees retire in place, meaning they stay in their old family homes or move to smaller quarters in a nearby neighborhood. But if you dream of sand and surf or of starting a new life with your distant grandchildren, now is the time to make your move. If you live in an area with a high cost of living, in California or New York for example, you may want to research states with lower taxes and lower overall expenses. If you dream of traveling in retirement, you may not need to keep your expensive old home and would be better off living in a condo, possibly within a half-hour drive of a major airport.
- How will you develop your retirement interests? If you already have a hobby that you want to pursue with more intensity in retirement, all you have to do is focus the extra time and energy you now have to your chosen field. But there are copious opportunities to find new interests or develop new skills. Many communities have senior centers that offer classes in photography, art, language and history. They also offer activities ranging from ping pong to pickleball to pinochle. Several national organizations, such as the Center for Learning in Retirement, the Collegium for Lifelong Learning and the Osher Lifelong Learning Institute, offer a wide array of courses, often through your local university. For the most part, these programs require no entrance exams, no tests and no grades. They exist to help you explore new fields and develop new skills.
- How will you finance retirement?It’s never too soon to start saving for retirement, but it’s never too late to assess and organize your resources and set up a solid foundation for your financial future. Figure out what your assets are, including any big-ticket items you may want to sell in the near future (a vacation home, a boat or that extra car you may no longer need). Identify where your income will come from – including Social Security, a pension if you have one, IRA or 401(k) withdrawals and any other source of monthly income. Don’t forget to account for taxes. And beware the biggest drains on your retirement money: spending too much on a big house, giving too much money to your kids and getting carried away on the carpet ride of travel.
- Write it down. A goal without a deadline is just a pipe dream. A plan that exists only in your head is just wishful thinking. Write your retirement plan down on paper or in a computer file. Be as specific as you can, but also give yourself alternatives and deadlines. If you want to go fishing, are you going to need a boat? Move to be near the water? Outfit yourself with the proper supplies? Who are you going to go fishing with? You may not have all the answers, but once you’ve written down a plan, you know where to start, you can do some research and talk to your family and friends, and you can actually achieve what you want to accomplish.
10 Reasons I Started Real Estate Investing
1. I needed income but didn’t want a full-time job
- I have been working since I was 12 years old (for the last 50 years). Have worked in factories, restaurant, retail stores, financial institutions, advertising and public relations agencies, non-profit organizations and for various corporations. I have started and operated my own businesses and have helped others start and grow there companies.
- I’ve worked 40-hour weeks and I know 140-hour weeks
- I’m not afraid of hard work
- But, I want to use this final season for sharing time with my family and serving others
2. It’s easy!
- If you ever bought a home, you know a big part of the process
3. Keeps my mind active
- There is still plenty to learn and that is part of the fun
- Learning new things and developing new skills
4. I control my time
- I don’t have the “boss man” telling me what to do and when
- If I want to spend a month with my daughter’s family in Ohio I can do it
- If I want to take a 5-hour walk or just stay home all day, snuggle up with my wife and bowl of popcorn and watch a Twilight Zone marathon, I can
5. It doesn’t matter where I live
- Once my properties are in place, I can live anywhere in the world that has Internet access
- With property managers taking care of the day-to-day operations of each property, I only need a weekly call to check-in
6. I’m always meeting new, interesting people
- Real estate is all about relationships
- You’re always meeting new, interesting people and making new friends
7. You don’t need a lot of cash to start
- With creative seller financing and OPM (other people’s money), you can start out with very little or no money
- You can
8. You can make a lot of money very quickly
- I got paid the next month after I signed the escrow docs
- Cash-out re-fis helped my more than quadruple the number of doors and cash flow I had the previous year
9. There are great tax advantages
- You’re not afraid to make as much money as you want because you can write off most (if not all) of your earning
- I can only speak for the U.S. but tax laws favor real estate investors
10. You can create a Legacy
- Not only will you generate great cash flow during your retirement, you will OWN tangible assets that you will be able to pass down to your kids
Well, that’s it! I hope this helped you as you are considering real estate investing for your retirement. You might also want to check our these other articles or podcasts about real estate investing.
- Real Estate Investing for Seniors (blog articles 4/4/16)
- 7 Reasons Why Real Estate Investing is the Best Way for Seniors to Make Money (blog article 4/18/17)
- How to Make Sure You Have Enough Money for Retirement (blog article 4/25/17)
- 000: Welcome to the Old Dawg’s REI Network Podcast (podcast 5/16/16)
- 028: Why Real Estate Investing is Great for Retirement (podcast 9/2/16)
- 056: 7 Strategies for Building Wealth After 50 (podcast 12/9/16)
- Real Estate Investing for Your Retirement (blog article 4/5/17)
- 104: 5 Reasons Why Real Estate is the Best Retirement Cash Flow Investment (podcast 5/26/17)
Also, many of our Monday podcast interviews are with successful real estate investors over 50 years of age — too numerous to list here.
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