Myles of Investments

Read about my successes and failures. Learn from my experiences and gain insight without losing any cash!!!

Lesson: Catching a Falling Knife
Lesson: Currency Exchange
Lesson: Mutual Fund
Lesson: Paid to Wait
Lesson: Pricing in a Downturn

This is where you’ll find find my Blog. I will comment on the latest news relating to investing, real estate, and the financial markets.

Retire in 2 Years, Is it Possible?

A very good friend was worried the other week, she is approaching retirement age and her issue was that she was uncertain that she could retire in 2 years. “I’ll just be working forever, I guess. With my job, I just can’t make enough to save to retire in these last few years”. Does that sound like anyone you know? Instead of getting overwhelmed by the enormity of the scope of the problem, we started problem solving solutions. We tried to think of solutions that would cost little to no money as she didn’t have much on hand, but like many people she had an existing line of credit.

With minimal outlay my dear friend could create an asset out of her own home. She had very little savings and no company pension being a working single mother. She was looking to retire in 2 years, but had no idea how to do it, as the amount she could buy in mutual funds would not support her for her retirement. She has a basement that connects to the garage and an outside door to the patio, and the basement has full height windows with lots of light. She was using it for very little, for watching TV and doing laundry. She could move the TV upstairs, buy a new stackable washer and dryer leaving the existing ones for the tenant. The house could be separated from the garage hallway dividing the units. She could install a shower and some kitchen appliances.

She likely wouldn’t need to use her entire line of credit, and the payment and interest (and then some) could be covered by the rent. This would giver her useable cashflow to pay back the loan quickly. If, for the next 2 years, she took all of the rental income and paid her line of credit, the entire debt would be gone in that time. This would allow her to live on her government pension for two weeks of each month, and on the rental income for the remainder of the month, and her total income would remain the exact same is it is now. This would enable her to retire! In 2 short years she could retire by turning her house into an asset.