We all have a vision of what early retirement can look like and tell ourselves we’re working towards it, but why can’t we get there sooner? It often comes down to misconceptions and false beliefs about doing it.
If you consistently put money into your savings account, make strides toward your financial goals, and hire a financial advisor, your retirement may still feel a long way off by age 70. Bill Bloom is an author who explores building wealth through an emergency fund, saving money, high yield investments, and active retirement planning.
But sometimes, we’re not getting there faster due to student loans, large health care bills, and that most people cannot save enough wealth over time to retire by age 55. In today’s JWB Not Your Average Investor Show, we will explore with Bill Bloom, the Retire As You Desire Podcast host, how to save and invest to build your nest egg over the long term.
In today’s episode, Bill Bloom talked about:
- The number 1 thing holding people back from earlier retirement
- The type of support you need to get to early retirement
- How to start building wealth even if you’re in your 50’s
- Much more!
Bill is a super-connector that has helped countless people get the lifestyle they want sooner than they expected, and we are excited to have the President of Bloom Financial on the show!
What is the key to retiring as you desire?
You need to know what’s important first when you want to get there. Then, you know your end destination and plan how to retire in that timeframe. When you know your purpose in life and what you love to do, you free up your money to work for you so you can live that life you’ve always wanted.
The theme of understanding your why is becomes important when building your wealth and creating a plan for early retirement. To do this, you need to start with the end in mind. Work your way from there with a timeline and plan of action.
How many rental properties do you need to retire early? That’s where JWB will sit down with you and create a plan. It all comes down to cash flow. Whatever your goals are, having the cash flow coming in is the name of the game.
Eliminate bad debt first. Pay off your student loans and your personal residence. Once you get that done and have rental properties with positive cash flow in place, you’re off to the races to plan early retirement and build wealth even when you’re no longer working.
Who should you have on your early retirement team?
Get a great Certified Public Accountant who can help you understand how to play the game of building wealth. That’s the first place to start.
Bill Bloom launched his podcast to share wisdom about retiring when you desire. He shares how to play the game, take the steps on what to do, create strategies, and set yourself up with better money habits. He also invites guests on his podcast who share their wisdom, showing how their journey took them to incredible success.
The good news is that it doesn’t take that much of a team to reach retirement. It takes better habits that you exercise consistently.
What are the three questions to ask before spending money?
- If I buy this item, could it make me money? Will it help me with my financial future?
- Do I need this? If it’s food versus a set of towels, that’s a no-brainer.
- If I didn’t buy that item, where else can I put that money to help it grow?
Ask these questions to analyze your financial future. Do you need it? Would it be better to put that money elsewhere? These three questions put you into an investor mindset.
When Bill Bloom evaluates where to place his money, where does he put it?
When will he be taxed, and how will he be taxed on it if he puts his money into an investment? Knowing this answer is one of the essential questions when figuring out assets and cash flow.
Simplify your financial situation. The greatest threat to your investment’s ROI is the taxes. It’s not the deal itself, which surprises a lot of people.
Long-term taxes is the biggest threat to your investments, sometimes losing 40% – 50% of what you earn. When you simplify your money and look at taxes in an educated way, you can make better investments.
Is your social security income going to be tax-free, or is it taxable? Elon Musk talked at a conference and revealed that his tax bracket is 53%.
When you put money into a Roth IRA, the idea is to pay tax on the seed and not the crop. If you have grown your nest egg as tax-deferred, you will be taxed on it. It will affect your income over the next 20 – 30 – 40 years of retirement.
Will your future health care costs be taxed?
Yes. If you don’t set up your financial planning correctly and if your retirement account is not tax-free, you’re going to have to pay taxes on your health care.
Should you find a financial planner who looks into the future?
Yes, it’s all a math problem. If you do a Roth IRA conversion where you take your traditional IRA and pay the taxes to make it an after-tax account, you’re paying the taxes on the seed and not the crop. If you understand what’s going on with economics now, there will be a lot of taxes. We’re going to be paying for it over the long term.
Not many people think about the Roth IRA, which has a huge advantage because it’s after-tax. This investment grows, and Uncle Sam doesn’t take a piece of it every year. As a result, you will be okay over the long term. When you are finally ready to retire, you won’t have to do all of the fancy tax planning as much as someone who has a lot more pre-tax traditional IRAs.
There is the expectation from the government to change the tax laws so more people can pay down the deficit. It’s something that savvy individuals know that it’s a wealth builder to be aware of for the long term when planning retirement.
Will the government eliminate retirement plans?
There has been discussion and ideas on the table of what to keep and remove. But what has been allowed is that if you’re a high-income earner, you can contribute to your traditional IRA and convert it into a Roth IRA. The Roth IRA conversion has specific income requirements.
If you have other money, however, that strategy may not work. That’s why it’s essential to speak with an excellent financial planner and your CPA.
How do rental properties fit into building the retirement you desire?
Bill Bloom said investing in rental properties is an excellent way to diversify your money. You should invest in real estate, stocks, and bonds when it comes to cash flow. Many financial planners are concerned about making their own money and not promoting other assets. You have to be direct with people when you’re a financial planner and help them diversify so they have a solid group of investments.
Looking at different investment ideas is a great thing, and you should ask the three questions above when considering what to invest in. If you don’t have the answers, seek out a professional like JWB, to get those answers. The goal is to help people grow their wealth, regardless of what you’re selling encompasses 100% of their investments.
How can you get in touch with Bill Bloom?
Connect with Bill Bloom at https://www.bloomfinancialco.com or send him an email at firstname.lastname@example.org. You can also lookup his Retire As You Desire Podcast on iTunes and Spotify.
What are the 7 Adjustments JWB is making to their Property Valuations?
- We are no longer separating maintenance based on sewer or septic tanks. As a result, we introduced our septic warranty program. The resident pays the premium insurance premium via the rent, which helps the investor.
- Our maintenance rates have been adjusted to 7.5%. The reality is that we’re in inflationary times, and we are responding accordingly.
- Vacancy costs have changed. On the renovation side, that has gone to a vacancy percentage of lower than 4%. On the newer construction side, we see no change from 3%.
- How do we represent vacancy and maintenance costs? We understand that vacancy can happen in the first year, and we show that accordingly.
- Rent appreciation. Rents are going up, and we see rents going up to 3% annually, which is conservative.
- Tenant placement fee. We have amortized the tenant placement fee and show how it will affect your Return On Investment. We have added this, taken the tenant placement fee, and amortized it over four years.
- Our job is to project accurate Return On Investment over the full market cycle. After you settle into the first year of owning your rental property, you’ll see clear ROI expectations by year two of your investment.
The net effect of all these changes is minimal. But we want to be clear so you, as an investor, can know what to expect.
How Do I Find Out More About Investing In Turnkey Rentals With JWB?
If you want to invest in Jacksonville real estate, you are in the right place. Go to www.ChatWithJWB.com and find out how we can help you reach your financial goals through turnkey single-family rental homes. Contact the JWB team to begin the discussion.
If you want to become part of the JWB online community, join us in the JWB Facebook Group at https://www.facebook.com/CashFlowProperties.
You can also go to www.JWBInventory.com to see what properties are currently available. We encourage you to contact the JWB team for a consultation to determine how our turnkey rental properties can deliver positive passive cash flow.
We invite you to watch this episode of the Not Your Average Investor Show in its entirety because Bill Bloom shared some high-level concepts about how to gain early retirement and building wealth. Fortunately for those interested in the single-family rental property asset class, Jacksonville real estate continues to be an excellent return for real estate investors.
To Your Success,