Scott PearcyParticipantAugust 6, 2020 at 9:46 AMPost count: 298
I know the purpose of the Logical Investor Portfolio is to invest in strong, large, financially sound companies with good technical indicators at a price discount for an average holding period of 2-5 years to achieve a growth rate of 15-25% (on average) during the holding period. I have no problem with this philosophy and over the past 7 years that I have invested with you, Sean, I have made more in profit on the stocks that you have recommended than I have paid in subscription costs to your various newsletters and “other” newsletters, too, and I hope to continue along those lines….
My question is…..As I approach retirement age, should I begin to allocate more of my overall investment portfolio and strategies to dividend/income producing investments to supplement any retirement income that I may receive from whatever companies I have earned a pension from? I understand that if the value of the portfolio is large enough, the problem becomes moot but very few people have a portfolio large enough to support a care-free lifestyle and still provide the type of generational wealth that will also make our children’s lives, and perhaps our children’s children’s lives care-free…..
My overall goal is to produce enough residual income to replace my income from my current job by the time that I retire from my current employer….I just may not have enough years left until that date to develop that type of wealth in my portfolio…..DANNY ABARParticipantAugust 6, 2020 at 10:56 AMPost count: 73
Hey Scott …
I know Sean will have a great reply to your question. I have also been with Sean since late fall of 2013.
I was forced to retire at 62 last June 30, 2019 … even though I was planning to work until June, 2021, when I would have turned 65.
My 401(K) plan had previously allowed me to roll my entire portfolio into my self directed IRA, and I began transitioning into Sean’s Ultimate Wealth and Absolute Profit positions, as well as take on new Logical Investor Positions. But, while I was still working, I continued to add to my 401(K) plan, with until I retired at 62 on June, 30, 2018
I immediately applied for Social Security benefits, beginning July of 2018, and that became my monthly income, (a huge reduction to my monthly income of about $8,500). Fortunately, I had reduced almost all of my debt and significantly reduced my monthly expense requirements, in anticipation of retirement.
Very quickly, I found that I could grow my IRA of $300K or so, equal to or greater than my monthly income had been, and take IRA deductions (taxable as ordinary income) to cover my monthly expenses. And the IRA continues to grow at a pace greater than my monthly income had been (almost 1% per week). I do buy option contracts that match Sean’s recommendations for stocks and ETFs.
It is definitely a scary path at the beginning. But the freedom of retirement, with the reduction of monthly expenses, has given me the financial freedom to give away as much as I make, and still live a great lifestyle.
I now monitor my IRA, plan for future buy and sell transactions, and work about 2 hours a day, from anywhere I can get an internet connection.
Feel free to contact me anytime if you would like to chat (469/644-2227 or email@example.com).
Danny AbarSean HymanModeratorAugust 6, 2020 at 11:20 AMPost count: 2791
Thanks for sharing that Danny.
You can sell puts on entries and averaging downs. When selling, you can sell calls against your shares for income as well. This is all in addition to dividends.
So there’s all sorts of ways to derive income from LI positions. Also, your capital gains over time can more than surpass any dividend income.DANNY ABARParticipantAugust 6, 2020 at 11:37 AMPost count: 73
Thanks, Sean … I need to learn and practice more about selling puts and calls, outside of vertical spreads … additional tools to add to my “income producing tool belt”!!Sean HymanModeratorAugust 6, 2020 at 11:40 AMPost count: 2791
Yeah, as long as there’s cash to get the shares available, it can be a good thing.Bob SmithParticipantAugust 6, 2020 at 12:41 PMPost count: 91
Dividend producing investments; seems that many of our investments are just that.
Last year my dividends were 33% of my income without even targeting dividend stocks.Sean HymanModeratorAugust 6, 2020 at 12:47 PMPost count: 2791
Yeah, we’ve historically had some way above average dividend yielders for sure. When I can find them, I like them. But they don’t steer the ship.
Many that lead with dividends end up losing too much in principle/depreciation of the asset because their focus is in the wrong place. It’s a mistake that’s often made.Christiaan VlasblomParticipantAugust 7, 2020 at 1:26 AMPost count: 199
And in addition to that we have seen that dividends are is not so guaranteed anymore as it was before the corona crisis as governments put dividend restriction rules as precondition for crisis support packages. So I see dividends more as a nice gift and inflation correction or interest compensation than a guaranteed income. My main income in LI comes from the very good returns on the stock price.Christiaan VlasblomParticipantAugust 7, 2020 at 1:42 AMPost count: 199
Thanks Scott and Danny for sharing your stories. Your challenges reminded me of that great picture Sean once shared. See attached Cashflow Quadrant.
It helped me a lot with similar challenges in my life when moving from quadrant E=Employee to quadrant I=Investor while trying to avoid some of the sleepless nights of S=Self Employed and/or B=Business Owner quadrants….
Attachments:You must be logged in to view attached files.Scott PearcyParticipantAugust 7, 2020 at 8:50 AMPost count: 298
I have read the Cash Flow Quadrant by Robert Kyosaki….Perhaps I should revisit some of those lessons and put some of these other principles to work as wellSean HymanModeratorAugust 7, 2020 at 9:00 AMPost count: 2791
Yeah. While dividends are nice because of their consistency (usually, before Covid), but what’s needed to keep pace with inflation to preserve purchasing power is either a 3-5% dividend or stock appreciation. Both preserve purchasing power.Sean HymanModeratorAugust 7, 2020 at 9:06 AMPost count: 2791
Yeah, the investor route gives you more control over your future. The employed have the least control, yet it feels to them, the least risky.
That’s a great book to read.Debra CarterParticipantAugust 8, 2020 at 5:46 PMPost count: 8
Hi Sean, I hope your doing well. I know you have been busy settling your grandfather’s estate and all the emotions that it entails. Continued prayers for you as you travel back and forth to AR. In reference to the options I am retreading you’re book on options for the 2nd. I have had some success but also some big fails🤗. I wish you would open a subscription which would be as “user friendly” as the logical investor recommendations. I seem to be mentally blocked on option success and need more help. Please consider this service. I would be first in line to sign up😉Christiaan VlasblomParticipantAugust 8, 2020 at 5:50 PMPost count: 199
Fully agree, I will be 2nd in line of that long queue ….
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