How are your savings? In good shape? And your investment portfolio?
When you're in your twenties, dropping a few dollars a week into a savings account is adequate in terms of putting money aside for the future. It's likely that you have no dependents, and beyond saving for specifics, such as holidays, running repairs to your apartment or car, or just having a slush fund for the unexpected, any kind of investing plan is just not in the picture.
However, you won't stay in your twenties forever. That's why setting (and sticking to) an investment timeline is the most crucial thing you can do today to plan for how you're going to finance the rest of your life, including any unforeseen extras there may be along the way, such as residential or other nursing care.
How to Create a Property Investment Timeline
Decide Where You Want to Be
Start by doing your research—jot down a few things you would definitely like to do or buy in the future, a few things you might want to look into if you could afford it, and a few of the nasties that can creep up on us all from nowhere (think illnesses or emergencies). Determine how much these things would cost, and you will have a minimum figure that you need to be able to afford to live comfortably after you stop working.
Determine How Much You Have to Invest
You may already know how much you have available to invest—there might be a lump sum you've inherited, or you might have a number in mind that you've accumulated in your savings account through the years. You should also assess your attitude to risk; if you're particularly cautious, you may want to leave your investments in tried-and-tested accounts, which provide steady (though likely small) growth. You'd also want to make sure you diversity and invest in a wide range of things instead of putting it all in the same investment.
Consider Different Kinds of Investments, Including Property Investments
There are many options where you could put your money other than a volatile stock market. There is one investment which is concrete—sometimes literally, or at least in part!—and if undertaken with the right advice and research, can be at least as stable as your low-risk savings.
Property investing might seem like a minefield, and it is true that some investments are more financially lucrative than others. However, a moderate portfolio of turnkey rental properties will almost certainly give you the kind of yield you would be looking for. If that's the route you decide to go, you'll need to spend some time crunching numbers to determine what kind of cash flow you can expect to gain from each property, which should help you decide on a target number of properties you'll need to purchase in order to reach your goals over time.
Take Your Projected Retirement Date Into Account
Now that you have the number of properties needed, determine how long you have until you wish to retire. For example, if you need to purchase 20 properties in the next 20 years, you could purchase 2 investment properties a year for 10 years.
Once you know the overall volume of properties you’ll need to acquire over time, you’ll be one step closer to creating the investment strategy needed to reach your passive income goals.
Ask Experts for Help
Lastly, exercise a little of that caution—find a good turnkey property management agency, who will do everything from source the investment to cut the grass. Then all you have to do is focus on your retirement goals.