My father had a reverse mortgage on his house. When he died,within a few weeks the reverse mortgage company had all his possessions tossed in a dumpster,the house locked up tight and sold within about a month. As far as I’m concerned,reverse mortgages are the equivalent of payday loans for old people. The interest rates on those reverse mortgages are predatory at best. If you know an old person who is struggling financially but owns a home? Do everything you can to persuade them to sell their h9me and use the proceeds to downsize or pay for a continuing care home if that’s what is needed. Don’t let these scumbag lenders rob your elderly loved ones under the illusion of a ‘reverse’ mortgage. Slimy.
I agree that a homeowner would almost always be better off by downsizing or selling to rent in the situation you described. I hope that I can make that rational decision, if and when the time ever comes and I'm faced with this predicament. I prefer to treat my owned home as an untaxable asset that can pass to our kids when the time comes. But, I understand how emotions can play into it and why some choose the reverse mortgage. I think cognitive decline is the worst enemy of making decisions like this later in life. I hope we make the best decisions in the future when we may not be as capable to do so as we hope for.
Thank you for sharing @derekcox6531 I am sorry to hear about your experience there. That is not the first time I have heard stories like that though unfortunately. It is not only the interest rates that are very high, the administrative fees for taking it out or paying anything back are exorbitant.
Hi. I discovered your videos a few weeks ago and have watched many of them. Your explanation skills are concise and awesome ! Cheers from the Laurentians (North of Montreal)
Thanks very much @francoisarchambault5550 it is good to have you here and I am glad you are enjoying the videos. It is not often a man with my accent gets complimented for being concise!
The older you get, the simpler money have to be. No reverse mortgage, no annuity, no $10k a month retirement homes. Look at my plan: 5 years of cash and the rest in 100% stocks.
Keeping things simple is a good way to go as you age. It not only helps you but helps your heirs when you are no longer here. I have to ask with a name like @liverpool3469 you must be scouse or a fan of Liverpool?
Wow...an honest and factual video. Many financial advisers try to get you to view your retirement through their beliefs. This just provides facts and information. We appreciate that!
Thank you @garth217 glad you enjoyed the video. Although I have my own set of beliefs I just try to put as much information out there as I can and let people decide for themselves how they want to go from there. It is not my retirement, it is yours!
First off truly appreciate this scenario as it more accurately reflects most(wanting to retire at 60 and $500k savings with no fancy pension). That being said, if we know that market will crash several times during a 30 year period and that inflation can sky rocket at anytime, why not plan accordingly? Instead of making a BEST case scenario (5% returns & 2% inflation), go for a REAL case scenario.
Some fair points there. I did try to highlight that with the "Danger scenarios" .... the 3% net return (5% returns & 2% inflation) is also on the conservative side so I would argue that is not a best case scenario. I will keep this in mind for future case studies though.
A financial blogger I'm familiar with uses the term FIWOOT - financial independence, work on own terms. Or as I like to think of it - maybe I'll find a part time job doing something I like while retired. At first I bristle at the thought - what? Work in retirement? But, as I picture my days post-career I worry that I'll fall into the trap of starting the day with 'Price' and finish it up with the 'Wheel'. Ugh - I can't think of anything worse. If I can find something to do that I enjoy, that is social, and I can get paid for it I will strongly consider it.
That's the way to look at it. There is something to be said for doing some work on a part time basis that is relatively stress free, that you enjoy and contributes in a positive way socially.
Fact : The S&P made 0 % from 2000 to 2012. Zero. That is 12 years of 0 % return on your equity investments. " Sequence of returns risk " It's a real thing in retirement , and if it hits you early in retirement, it could be devastating to your financial plans. Folks these days expect perpetual double digit returns and 2 % mortgages . That is the exception when viewed through a historical lens people, it's not normal. Why is it people have such insanely short memories. Be cautious of the stock market in retirement. Godspeed.
Wise words. The last 15 years of returns for most folks have seen complacency creep in a bit. Tough times will come again and knowing how you will react to them and what you will do is a key part of planning.
I have 500k in my 30's, I'm shitting bricks...Inflation chipping away at the value rapidly. Economy/employment becoming more precarious and cost of living going insane. I'm more of a perpetuity guy than an annuity guy.
There are lots of concerns just now but if you go back in history are todays concerns greater than what we have dealt with in the past? On the bright side, you are doing very well if you have 500k in your 30's. That is not very common.
@@machinesnmetal well, because 8% is very difficult to achieve, reliably without running into ROC or other risks to the underlying capital. Sure, there are REITs like SRU (I own some), but they rarely raise their dividend and therefore won't keep pace with inflation. Once you start to spend the money it's important to make sure that there is protection against inflation.
Agreed @James_48 .... a dividend portfolio can work very well if a) you can stomach the downturns when they come and b) you have high quality dividend stocks. An 8% dividend sounds great but it doesn't mean a lot if you lose 50% of your original capital.
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My father had a reverse mortgage on his house. When he died,within a few weeks the reverse mortgage company had all his possessions tossed in a dumpster,the house locked up tight and sold within about a month. As far as I’m concerned,reverse mortgages are the equivalent of payday loans for old people. The interest rates on those reverse mortgages are predatory at best. If you know an old person who is struggling financially but owns a home? Do everything you can to persuade them to sell their h9me and use the proceeds to downsize or pay for a continuing care home if that’s what is needed. Don’t let these scumbag lenders rob your elderly loved ones under the illusion of a ‘reverse’ mortgage. Slimy.
Exactly! This should be illegal! Thief's !!!!
I agree that a homeowner would almost always be better off by downsizing or selling to rent in the situation you described. I hope that I can make that rational decision, if and when the time ever comes and I'm faced with this predicament. I prefer to treat my owned home as an untaxable asset that can pass to our kids when the time comes. But, I understand how emotions can play into it and why some choose the reverse mortgage. I think cognitive decline is the worst enemy of making decisions like this later in life. I hope we make the best decisions in the future when we may not be as capable to do so as we hope for.
Thank you for sharing @derekcox6531 I am sorry to hear about your experience there. That is not the first time I have heard stories like that though unfortunately. It is not only the interest rates that are very high, the administrative fees for taking it out or paying anything back are exorbitant.
Hi. I discovered your videos a few weeks ago and have watched many of them.
Your explanation skills are concise and awesome !
Cheers from the Laurentians (North of Montreal)
Thanks very much @francoisarchambault5550 it is good to have you here and I am glad you are enjoying the videos. It is not often a man with my accent gets complimented for being concise!
The older you get, the simpler money have to be. No reverse mortgage, no annuity, no $10k a month retirement homes. Look at my plan: 5 years of cash and the rest in 100% stocks.
Keeping things simple is a good way to go as you age. It not only helps you but helps your heirs when you are no longer here. I have to ask with a name like @liverpool3469 you must be scouse or a fan of Liverpool?
Wow...an honest and factual video. Many financial advisers try to get you to view your retirement through their beliefs. This just provides facts and information. We appreciate that!
Thank you @garth217 glad you enjoyed the video. Although I have my own set of beliefs I just try to put as much information out there as I can and let people decide for themselves how they want to go from there. It is not my retirement, it is yours!
First off truly appreciate this scenario as it more accurately reflects most(wanting to retire at 60 and $500k savings with no fancy pension). That being said, if we know that market will crash several times during a 30 year period and that inflation can sky rocket at anytime, why not plan accordingly? Instead of making a BEST case scenario (5% returns & 2% inflation), go for a REAL case scenario.
Some fair points there. I did try to highlight that with the "Danger scenarios" .... the 3% net return (5% returns & 2% inflation) is also on the conservative side so I would argue that is not a best case scenario. I will keep this in mind for future case studies though.
@@beachesfinancialgroup Thank you for taking the time to produce these very informative videos, they are of great help.
@@johnnyv5995 You are very welcome. I am glad you are finding value in them, that is why I do it!
A financial blogger I'm familiar with uses the term FIWOOT - financial independence, work on own terms. Or as I like to think of it - maybe I'll find a part time job doing something I like while retired. At first I bristle at the thought - what? Work in retirement? But, as I picture my days post-career I worry that I'll fall into the trap of starting the day with 'Price' and finish it up with the 'Wheel'. Ugh - I can't think of anything worse. If I can find something to do that I enjoy, that is social, and I can get paid for it I will strongly consider it.
That's the way to look at it. There is something to be said for doing some work on a part time basis that is relatively stress free, that you enjoy and contributes in a positive way socially.
Outstanding advice ✅
Thank you sir, always appreciated!
Nicely done and said!
Thanks very much, glad you enjoyed it
Fact : The S&P made 0 % from 2000 to 2012. Zero. That is 12 years of 0 % return on your equity investments. " Sequence of returns risk " It's a real thing in retirement , and if it hits you early in retirement, it could be devastating to your financial plans. Folks these days expect perpetual double digit returns and 2 % mortgages . That is the exception when viewed through a historical lens people, it's not normal. Why is it people have such insanely short memories. Be cautious of the stock market in retirement. Godspeed.
Wise words. The last 15 years of returns for most folks have seen complacency creep in a bit. Tough times will come again and knowing how you will react to them and what you will do is a key part of planning.
I have 500k in my 30's, I'm shitting bricks...Inflation chipping away at the value rapidly. Economy/employment becoming more precarious and cost of living going insane. I'm more of a perpetuity guy than an annuity guy.
There are lots of concerns just now but if you go back in history are todays concerns greater than what we have dealt with in the past? On the bright side, you are doing very well if you have 500k in your 30's. That is not very common.
Great Video!
Thanks very much glad you enjoyed it. Are you close to retirement?
500000 in dividend stocks at 5 % plus would generate enough cash to fund most of their needs.
Why not put it all into 8%? The extra 3% would make a big difference on the bottom line.
@@machinesnmetal well, because 8% is very difficult to achieve, reliably without running into ROC or other risks to the underlying capital. Sure, there are REITs like SRU (I own some), but they rarely raise their dividend and therefore won't keep pace with inflation. Once you start to spend the money it's important to make sure that there is protection against inflation.
Agreed @James_48 .... a dividend portfolio can work very well if a) you can stomach the downturns when they come and b) you have high quality dividend stocks. An 8% dividend sounds great but it doesn't mean a lot if you lose 50% of your original capital.