Pulaski

You're forgetting $500k for the green cards, and also you can't get anything close to 10% on low risk investments; in the current economic environment, 3-4% would be as much as you could hope for without running substantial risk to your capital.

Jerseygirl

What will the OP do for the remaining 6 months? He will need a 2nd home, 2nd car etc. We have homes in the US, UK and Canada...the up keep when you are not there is very expensive. We are not interested in renting them out...too much hassle...management fees, repairs, taxes etc.

Once you hit 65 travel insurance becomes more and more difficult to obtain with each passing year...not to mention expensive. Again a major illness and the premium rockets.

Nokoman

I was thinking along the lines of the new thought of a 6/12 visit, no green card.

I believe a sharp investor could get a good deal more than 3-4%.

All I was trying to say was that everything wasn't an outward flow of cash.

Jerseygirl

He will still to to buy or rent 2 homes...2 cars etc.

Then there's the exchange rate to consider...fluctuations can make a huge difference.

Best scenario...summer in the UK...drive to the southern Med for winter.

Nokoman

I've no idea what he'll do as I have know idea about his circumstances. 1000's of Canadians are successful snowbirds.

This guy could be getting a healthy private pension. Who knows? Without knowing any details it's all guesswork.

All I'm saying is every post has highlighted the expenditure . But if you have a large chunk of capital you also have a sizable income.

Jerseygirl

Your figures me. Where are you getting 10% from? Remember the OP is retired and would therefore want to invest safely...which would yield a far less percentage.

Nokoman

Retired doesn't mean no income. He could have income from investments, dividends, rentals, trust funds.

Over the long term the stock market averages a 10% return. A shrewd investor can and does make money on falling and rising markets.

I'm not assuming anything. You seem to be assuming a hell of a lot

I'm only suggesting things may not be as sweetly packaged as we think.

scrubbedexpat099

8% is the rate of return in Colorado.

Jerseygirl

I know that...but usually unless a retiree has money to throw around and lose he will be on the cautious side when investing.

Without knowing the full picture all we can do is assume isn't it?...but not you of course. I know what I can live out my days on quite comfortably...but others may need far more or far less...again it all depends.

scrubbedexpat099

The board in charge of the $39 billion state pension fund for Colorado workers is sticking with an 8 percent expected rate of return on investments, despite a bleak economy and earnings in the third quarter of negative 8.5 percent.

The board voted 8-5 Friday to keep the 8 percent rate after an intense debate in which one member warned that continuing to underfund the pension plan could result in its demise.

An investment consultant hired by the Colorado Public Employees' Retirement Association board predicted earnings of 7.7 percent over the next decade. And a Goldman Sachs analysis forecast 6 percent.

http://www.denverpost.com/news/ci_19370370

Nokoman

I think you are painting with a very wide brush

1000's of elderly invested their whole nest egg with Bernie. That's hardly being cautious?

With this fine chap from SA I'm not assuming a thing.



The only thing I wanted to point out was that everything is not necessarily expenditure.

Jerseygirl

Investing your whole nest egg with one person/company...your example being Bernie....is not being cautious IMO.

Nokoman

Of course it's not. But you said the retired are cautious. I've just pointed out a huge group who weren't.

In fact the elderly often get talked into schemes. It happens every day of the week.

Flabound oneday

of course there are and you are right to point them out, however with due diligence OP (or anyone) could find a home that qualifies.
I wasnt saying he should, i was saying he could....

the average cost per month for a home management pack is $3-400 that includes pool care, lawns and (for an extra) shutter install.

and again yes you need to find tenants....

not a venture for someone strapped for cash but still a -potentially- cheaper option than spending 500k on a house or EB5

Pulaski

Agreed, that was common thinking throughout the second half of the twentieth century, and even in the early 2000's as interest rates collapsed. That was true when you could get 7-8% just holding US or UK government bonds, but with deposit rates close to zero, and government bonds yielding 2% +/-, the risk you would need to run to earn 10% is quite substantial, given that return is proportional to risk.

The world is full of people who don't understand that, including one of the Baring family who was a director of Baring's bank. He was interviewed on the BBC news and said ".... we considered [Nick Leeson's activities] to be highly profitable and virtually risk free"!!! I just about fell off my seat when I heard that, and that a director of what had been a well respected bank would say such a thing on national TV was embarrassing. I guess he skipped Economics 101.

Furthermore, even a substantial holding in low interest bonds is risky, given that a small increase in interest rates will cause significant capital loss. However predictions in a well respected investment magazine in the past couple of weeks were that interest rates would remain low [at least] through 2019.