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
