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 I
am always pleased when I review my investments to
find that I made the right choices picking cash
yielding assets.
As I plan to retire in the next five to ten years,
(or until my wife says stop) I had a great concern
whether I had put away enough cash to survive these
times where gas prices, house prices, and grocery
prices seem to be escalating out of control.
My retirement goal is simple. Leave as much of my
hard work and effort to the children and
grandchildren and not touch my assets. However,
since I still have to put gas in my car, go to the
odd movie, and have a round of golf here and there,
I still need cash to live on day to day without
having to sell.
I have bought into every one of the Real Estate
Income Gain (REIG) projects that I have showed, and
while the numbers may fluctuate slightly over the
quarters, my asset is still improving, and I know
that I have cash coming to me every quarter. Not
bad, eh?
I don't have to sit and worry to see what my
investment is doing, or comb my receipts I get in
the mail, if my mutual funds, bank stocks are going
up or down.
Nor do I have to worry if that land I bought has
received first reading, second reading or final
rezoning or whatever like that, or hear of the price
of servicing has skyrocketed, jumped and increased,
or what I thought would be five to seven years
return becomes ten to fifteen years.
I am too tired to see everyone lining up to grab
money out of my pocket.
I am too impatient and too old for that, and what if
God has other plans for me in ten or fifteen years,
that are beyond my control!!! (I am 64 years young.)
After five years on my REIG's, I know I can
refinance my cash flowing assets, put my equity back
into my pocket, tax free, still own the asset and
continue to enjoy getting cash flow.
I did that with our Trail South project in Edmonton
and now am going to do the same with that on our
105th Street project in Edmonton and this December
we will be dealing with our Inglewood project the
same way.
I believe that we should be doing more of this in
the future.
Ranchlands:
I have committed to buying into our latest REIG
project, Ranchlands in Calgary.
I believe that we bought this project right! My one
question always is, "What is the upside potential of
the rents?" (or in other words, how do I continue to
make more money in the future on my investment?)
If the upside is good then we are in. So even if we
have to pay a lower cap rate for the product, the
magic is in increasing the rents over a five year
period. If we can do that then we have a home run!
We have just caused a tremendous appreciation in our
product if we can do this.
What if we are wrong? Then the cash flow still
continues, the mortgage on the property gets paid
down and we wait for the rents to roll over, and
still capture our rent renewals down the road.
Meanwhile what is the downside? That I get cash
flow? Correct, I get cash flow. (My wife is smiling
now!)
If I were to pass on, then my wife and kids can
continue to collect the cash flow and watch it grow.
Think about it, every time you pay your phone
monthly charges, your monthly cable charges, your
electric bill, your water bill, who do you think is
getting the cash flow?
Month after month they charge, they earn.
Month after month, we charge our tenants, they pay
and we earn. Instead of being a shopkeeper, why not
own the shop and let the tenants pay you month after
month?
I look forward to my kids and grandkids earning and
learning from me after I am long gone. That would be
a nice legacy and asset to leave them.
My Mum and Dad are from Midale, Saskatchewan and
always said to save and have my investments grow.
"Save and Grow". It is the prairie way.
Call me if you want to hear more. I am always
available at 403-630-4544, or if you prefer email me
at
howardmanley@shaw.ca
Thanks for reading this and sharing this with me.
Your comments are always welcome.
Howard Manley
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