A note investing for retirement can be an important tool in your retirement planning. Investments in notes have been around for a long, long time. In fact, investment in notes existed long before banks were invented!
Before banks were invented, if a merchant or farmer wanted to sell their asset or product, they had to be paid in full in cash or the buyer had to be paid with a combination of cash and the buyer’s promise to pay. the balance later. Before banks were invented, private traders, private farmers, and private investors accepted promissory notes as payment for assets.
Today, banks handle most of the commercial paper business. But they don’t handle everything, they don’t handle it 100%. Private promissory notes are still used in specific business and financial transactions. Some examples of private note financing that are commonly used today are:
- A home transaction
- A farm or ranch transaction
- A sale of a business transaction.
- A divorce property agreement
- A dissolution of ownership of a partnership
All of these transactions offer potentially above-average investment opportunities, if properly structured. They can offer a monthly cash flow in excess of that available from other sources. They can offer short-term earnings opportunities or long-term retirement investment opportunities. They can offer an interest rate yield above average. Essentially, each private party promissory note can be tailored to suit specific and special situations, if properly structured.
In order for you to benefit from this self-directed retirement investment area, you must “do your homework.”
The best you can determine the following facts that apply to your personal situation:
- How much cash do you have now to invest in retirement?
- How much cash will you have in the future to invest in retirement?
- When will future cash be available to invest in retirement?
- Do you have a target retirement income amount?
- Do you want to be an active investor or a passive investor?
- Do you want to get involved in investment classes and training?
- What level of risk and volatility are you comfortable with?
- Do you want to invest alone or with one or more partners?
- Do you have investment experience?
Think carefully about each of the questions above. Take your time and really “get acquainted” with your investing self. Do not rush into any investment until you have sincerely and honestly answered these questions. By investing, as in many other areas, you have “wasted.”
You have to learn to crawl before you can walk; walk before you can jog; trot before you can run.
Your goal should be gradually, over time, to ensure a steady monthly cash income so that you can live when full-time or even part-time employment is not an option. Your long-term goal should be “financial freedom.”
A note of caution: Eighty to ninety percent of people believe they are above average. Suppose it is fallible. Be careful!
