Many fear the idea of not earning an income upon stopping work, but everyone dreams of enjoying a comfortable retirement, and there are common sources of retirement income such as Social Security and pensions that are usually sufficient to cover the bills of most investors in them, but there are many alternative options that provide an influx Critical, however, is often overlooked or underused.
In a report published by the American Montana Standard site, author Ryan Downey said that the following four unexpected sources of income upon retirement are less common for good reasons, but it may be useful to resort to them if you have already exhausted traditional methods of improving your lifestyle in retirement. .
Converting the property into shares
According to United States census data, real estate is the most common stock category most retirees enjoy. You may have a few hundred thousand dollars of equity on your property, but unfortunately it is not in the form of cash, and this problem was solved by developing reverse mortgages. And other financial strategies that convert real estate stocks into cash, enabling a person to stay in his home.
On the face of this, this situation appears positive, but there are some risks and negative aspects that must be taken into account, as reverse mortgages require payment of fees and an increase in the value of the interest included with the increase in the value of the loan, and they do not change the commitment to bills such as property tax or insurance, and these mortgages are also depleted. Your shares by converting them into cash that can be tapped, so you will reduce your net worth over time, so you must weigh the costs, risks, and benefits before deciding on a reverse mortgage.
Peer-to-peer lending
Peer-to-peer lending services link lenders with borrowers to facilitate private loans, and platforms for this service allow lenders to set standards for borrowers, agree to parties that meet acceptance requirements, then distribute funds and manage repayment transfers.
Some of the most popular lending platforms are supported by major financial institutions and now have significant positive records.
However, consumer loans are often riskier and provide less liquidity than most retirement bond portfolios. Individual lenders do not have the same regulatory oversight as corporate bond holders, and yet it is an alternative that could produce higher yields than conventional debt.
Peer-to-peer lending services that connect lenders with borrowers to facilitate private loans (Shutterstock)
Private real estate investment funds
Many people have income from publicly traded real estate investment funds, while only some of them benefit from private real estate investment funds that require minimal investments. Advances in financial technology and collective pledge have eased restrictions, allowing individuals to participate with less than A few hundred dollars sometimes.
Finding a suitable private real estate investment fund that focuses on income generation would yield impressive results, but various regulatory parameters, low liquidity and high risk may be problems to consider.
Most private real estate investment funds have relatively high fees that reduce the value of the returns, so make sure that any additional expenses you may incur will be matched by high performance, and private real estate investment funds are also generally less liquid than their publicly traded counterparts, which means that you may take a long time to get your money back. After being invested.
Silent partner on a small project
Some people want to become silent partners in small businesses, and if all goes well, the private capital invested in this enterprise will help its growth, stability and make regular profits.
However, the margin of failure of small companies remains more than stocks, and it is one of the least liquid investments. For example, about 20% of small companies stop working before completing their first year, and 50% of other companies stop within 5 years.
Once you give up your capital for the sake of a silent partnership, you may never get it back, and if you become a silent partner, first make sure that you can trust the people who run the company, and invest only in strong business models, and try to invest only a portion of the capital that you can. Live without him.
These unexpected sources of retirement income remain unknown, because they are not effective or appropriate to face risks for most investors, while stocks, bonds, pensions and social security seem to be among the most secure options, however if you cannot solve your problem in the usual ways, then you may try new solutions.