ho wins? Self-storage wins every time, hands down!
The 4 percent rule lets you know the recommended value of your stock portfolio to retire with a certain yearly income via your stock portfolio. It simply states that the maximum you should spend from your stock portfolio during retirement is 4 percent. For example, if you wanted a yearly income of $200,000 during retirement you would need $5 million invested in the stock market. If you wanted a $300,000 yearly income you would need $7.5 million ($300,000 divided by 0.04) invested in the stock market.
For additional safety against the occasional large stock market drop, it would help if your mortgage was paid off and you had one or two years of income in cash. That way you could skip withdrawals when the market is down significantly.
If you have $7 million to $10 million in the market, or will soon, you are on track for a great retirement.
If you don’t see this happening, self-storage is a real alternative. And even if you have a 10- to 20-year plan to save for retirement, you can cut that time in half with self-storage.
Normally, to make $300,000-plus a year in self-storage you would need to invest $2 million to $3 million of your own money with a traditional loan with a 30 percent down payment. But now you have an opportunity to get a Small Business Administration (SBA) loan to build your self-storage business with 15 percent down, which allows you to cut your initial cash investment in half. If you would like an introduction to leading SBA Self Storage lenders let me know (Marc@storageauthority.com).
It is much easier and faster to save a million dollars to invest in self-storage than to save $7.5 million to get that same $300,000 retirement income.
Disclaimer: I am not a certified financial planner, so make sure you review your retirement funding with your financial planner. Last week we had a prospect go through our discovery process. She was all set to go and just had one step left: to check with her financial planner. She told us she decided not to get in because her financial planner said she would be risking her grandkid’s college fund. Of course, we disagree with the premise, but she made the right decision, because if she did not believe enough in herself and self-storage, then self-storage is not for her. It does take work, but most people work a lifetime and do not retire with a $300,000-plus yearly income. Many of our Storage Authority franchisees reviewed the opportunity with their CPAs/financial planners, so we encourage it. We even have one franchise who is a CPA/financial planner bidding his project out as we speak. If you would like to talk to him, let me know and I will introduce you.
Cheers! Lets crush it in 2024!