It is possible to enjoy the retirement years and earn income without having to meet a working day. How to do it? There are two ways to prepare financially for retirement: Save and invest in Blue World City.
The path of saving should always be considered a good financial habit, but investing increases the possibility of increasing that saving and our capital. In our article “retirement savings, where to invest?” We will talk to you in more detail about this topic.
For investors looking for safe options for extra profit, real estate investments are an alternative that has shown stability and constant appreciation.
Therefore, in this article we leave you some tips that have proven to work when it comes to retirement planning.
5 tips to prepare your retirement and obtain extra income
There are many investment tips that apply to different stages of life, and that will help you make better sound financial decisions to obtain an additional source of income.
Here are some ideas to earn extra money and enjoy a relaxed retirement without financial worries.
1. Know our financial status
To start investing we must know what the capacity we have to do so is. This capacity has to do with our investor profile and —to know it— we must consider the following characteristics:
- Evolution of salary or income that we have. That is, how our fixed income will increase. Although it cannot be anticipated exactly, an estimate can be made based on the ladder plan of the company where we work, or on the projection of the income that is acquired from an investment, for example, from the lease of land or housing.
- Progression of expenses. Do we have children who will attend a private university? Do we have an operation or treatment pending? There are things that we cannot foresee, but we can acquire instruments such as policies or trusts for educational, medical and security issues; These will allow us to cover unscheduled expenses. The cost of these is something that we can know and plan.
- Saving capacity. This is the real amount that we can save without affecting our finances on a day-to-day basis. There are techniques such as the 50/20/30 rule or similar that help you better manage your income and be able to save.
- Life expectancy. Although it is not an issue that many talks about, it is important to know our own health data and that of our family, to estimate an amount of suitable capital to retire without changing or reducing our quality and lifestyle.
- Investment sustainability. Does our heritage make us profit or does it generate expenses? And more importantly, how much does it cost to sustain it? In the retirement season — where productivity generally drops — we need to have financial or non-financial assets that provide us with earnings at low maintenance costs, or that are sustainable so that we can have a return on them.
- Retirement savings plan. Currently, most Mexicans do not have a retirement plan; But there are instruments such as Adores or retirement savings policies that, although they should not be considered the only option due to the possible instability of their currency, should be added to the characteristics to be considered when planning this stage.
- Risk profile evaluation. In our current financial situation, how much could we lose without affecting our capital? Assessing the risks of an investment before making it will help you protect your capital.
In addition, if you also carry out a financial balance, you can take actions such as:
Pay off debts
It is important to include a section on retirement and paying off unnecessary debt in your financial planning. This allows us to have the capital to make investments in which we can allocate the same, or more than what we pay in credits.
Invest in heritage
As we have already seen, the risk profile allows us to know how much we can invest without going undercapitalized, in case things do not turn out as planned.
It also allows us to make decisions to invest in the acquisition of heritage assets through financing, which is adjusted to our ability to pay without putting our capital at risk.
In today’s real estate market, buying land is emerging as an option to protect our capital with assets with a wide range of leasing possibilities.
Experienced real estate companies – such as BMF Inversions – provide excellent opportunities to acquire investment lots ideal for retirement, from which to take advantage of them and generate passive income.
2. Research and invest in what we know
Business and investment genius Warren Buffett says, “Investing must have a rational basis. If a business is not understood, it is better to avoid it”, thus trying to advise the favorable of staying within a circle of competence, that is, within what we understand, since this way we will make decisions based on prior knowledge.
Reading and researching about where we want to invest, about a property or property that we want to acquire, is a way of using our free time or hobbies to benefit our investments.
In addition, some of our hobbies may be in high commercial demand and can help us earn money from home. A business idea can arise from something that we like to do and thus earn money for the retirement years.
Identifying trends in the markets allows us to know which are the strongest commercial or financial sectors to invest in them.
3. Choose formal and legitimate investment projects
There will always be investment proposals in the market that offer to obtain – in a short time – extraordinary profits, with the promise that there will be no risk of losing capital, but we must remember that:
Investing on a hunch is not the same as investing in a project with a proven, safe, and formal earnings record.
Investors know that real estate as financial assets have always given very good results through revaluation, leasing, subdivision, sale, etc.
It is not surprising that large investors choose to buy several plots of land, in order to diversify their capital and have the possibility of obtaining cash for the sale of one, if necessary.
It is advisable in this case that a properly legalized property or land be acquired, that is, that it is private property and not communal to protect our investment.
Undoubtedly, deciding to buy a land in cities like Cancun is a guarantee that high returns will be obtained, since the Mexican southeast has had high real estate capital gains for some years and continues to grow.
4. Start a business with land
Investing in real estate in Playa del Carmen or building a profitable business in Merida will be the key to ensuring a comfortable retirement and providing a wealth for your family.
Currently, to start a business that generates money it is necessary to use tools such as digital marketing to promote yourself, have a customer service strategy, either through email or a virtual assistant, have a presence on social networks or a store on-line.
If you are passionate about something and you can start a business with it, offer your services. Our recommendation is to acquire a land that allows you to set up your business, since there are several benefits that you can obtain.
- You get a property that over time will increase in value and that in the medium or long term will generate considerable profitability, especially if it has a good location in an area of high capital gain.
- If you do not have your own idea to start a business, you can rent it to companies or franchises that are looking for a space to expand, and in this way get a constant cash inflow.
- There are business options from the construction of commercial premises for rent, to leasing it for social events or a parking lot that do not require a lot of investment.
5. Start preparing for the retreat right now
The first step to making a comfortable and loose retirement a reality is to be clear about where we want to be, and start right now with simple actions and not wait until we are approaching 60 or 70 years to do so.
From the moment we start an active working life, it is ideal to start investing a part of the salary in fixed income and variable income investments, these investments will depend on how old you are, because – according to the rule of 120 – the percentage that you must allocate to income variable will decrease as you get older.
Not surprisingly, you might think that it is too early for someone in their twenties to start worrying about retirement, however, starting early can be an opportunity to retire early with enough income to live comfortably.
How to choose the ideal terrain?
In several articles on our blog, we emphasize the importance of choosing the land that suits your needs above the price, a cheap land is not a guarantee of a fruitful business.
We will briefly mention the key points to buy a land that generates returns:
- Location: Before investing in a property, you must make sure that the location is correct. Many times, due to the type of business that you want to start, a piece of land may be unsuitable even if it meets the other requirements. Defining the type of business will be the basis for finding a location that suits your needs. For example, setting up a laundry in an area where there are already several businesses of this type will not be profitable, as well as setting up a restaurant in an area where not many people pass by.
- Services: There are rustic, semi-urbanized and urbanized lands. Depending on the time in which you prospect to start your business, it would be best to opt for land already with urbanization, otherwise, it is not known with certainty when the responsible municipality will proceed with the work. Among the basic services that the land must have are: drinking water, electricity, drainage service, public lighting, paving, among others.
- Accessibility: The location must allow adequate accessibility, be close to avenues, hospitals, shopping malls or educational centers that guarantee a considerable pedestrian and vehicular influx, as well as being able to arrive from various points.
- Legal certainty: It is necessary to confirm the legal status of the land to confirm that it does not have legal problems such as liens or mortgages, and carry out the deed process before a notary public.
A retirement with secure income is possible
Now that you know some tips to start generating extra income for your retirement, it is time to start applying them, because it is never too late to start investing and making money.
Choosing a land that is ideal for your project or undertaking does not have to be complicated.
At BMF Inversions we have more than 25 years of experience, and real estate successes in the main cities of the southeast of Mexico.