How can Canadians enjoy more ability to travel now, without sacrificing their future finances and retirement?
The ability to travel is now more of a burning desire than saving for retirement or even retiring early. It makes sense for many reasons. We’re now working decades longer, and spending decades longer in retirement at even older ages. World travel can be so much more enjoyable when you have the health to engage in a full range of activities and see all the sights. Taking months or a year out to travel in the middle of working life can bring many benefits too. It avoids burnout, can be inspiring and can make for much better and more productive employees who are better at problem-solving. The pressing question is how can more Canadians enjoy this earlier, without destroying their finances and retirement plans?
Finding the Money
Setting aside additional funds, allocated for travel, on a monthly basis can be a challenge. Even for those who are already making great headway on their retirement plan. Cracking open any existing nest egg can be expensive and roll back years of compound gains. Foregoing retirement savings for an extended holiday doesn’t seem too wise either.
The good news is that there are alternatives. It may not cost you that much to travel either. You may find around the world tickets for as little as $2,000. You can also be as lavish as you like and may spend over $2,000 just for the flight on each leg of your journey. Most individuals and families can now take their work on the road with them. If your current employer won’t allow it, then freelancing, consulting or finding work abroad can be ways to finance extended travel.
Perhaps most importantly and reliably is to put savings and investment capital into passive income producing investments. These investments send you money every month or quarter, without you having to touch the underlying capital invested. In investments like commercial real estate, your nest egg can go on building wealth and equity, simultaneously. On your return, if you don’t need the investment income, just reinvest it until you retire or catch the travel bug again.
Growing Opportunities in Commercial Real Estate
Commercial real estate is a fantastic tool for accomplishing this, along with retirement planning. It offers a strong foundation, attractive yields and dividends, and wealth growth. This is why it’s such a favorite investment of the world’s biggest pension funds.
Thanks to these types of investments, Canadian pension funds now have close to $200B in assets. According to reports from RBC and the Financial Post, these funds plan to continue to grow their stake in real estate, as they pull away from stocks. They may not be able to do this as quickly as individual investors, nor be able to generate the returns of leaner and more profitable and nimble smaller private investment firm. Yet, this does speak well to the future of this asset class. These pension funds may also help drive up demand and values of Canadian commercial property sharply, as stocks continue to hit bad weather.
For Canadians who desire to travel more and earlier, it’s all about making smart investments. If done well, there should be some upside potential for saving and investing from the long term, by being driven to choose smarter investments. Canada’s big pension funds may even be a big help, by ultimately driving up the value of these assets or even buying after small investors have added value and performance to the property. This all creates additional leaps in wealth and further opportunities to invest in new cash flowing commercial properties at better values.