Retire Rich With REITs... 2.0 by Brad Thomas

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Summary

  • When it comes to real estate, I’ve got a lot of experience I’m more than willing to share.
  • While we do recommend these five high-quality REITs, we cannot overemphasize the significance of spreading your hard-earned capital across various REITs and other asset classes.
  • We believe that the way to retire rich with REITs is to (1) avoid market timing and (2) to maintain strict discipline at all times by adhering to principal preservation.
  • Looking for a portfolio of ideas like this one? Members of iREIT on Alpha get exclusive access to our model portfolio. Get started today »

It has been a little while since I wrote a retirement-specific article. I think the last time was in early November.

On November 5, I published the piece, “Retire Rich With REITs: May the Force Be With You.” And the following day, I posted its sequel, “Retire Rich With REITs – With a Satisfactory Margin of Safety.”

In the first one, I noted that, “Over the years, I’ve witnessed firsthand the vast wealth that can be created by owning real estate.”

That statement wasn’t just real estate investment trust, or REIT, specific though. I told my whole professional story, including how:

“For over two decades, I forged a career developing free-standing and multi-tenant properties. By learning value creation from the ground up, I was able to turn a student loan (around $25,000 in 1988) into a net worth of around $30 million.

“I was doing good and flying high.”

That was until the housing bubble burst.

“Fast forward to 2008, when the word ‘developer’ became virtually extinct. I had lived through previous recessions, of course. Yet the ‘great’ one turned out to be the catalyst for my new career as a real estate analyst.”

That’s truly how I got where I am today. By losing everything and forging a new path forward.

And, boy, but am I grateful for that journey. Truly, as I’ll explain down below.

Photo Source

Doing Something Worthwhile

I’m going to quote myself from that article again because I can’t stress this next part enough:

"If someone had asked me at the time – if they had given me the choice to proceed the way I had to after that – I would have turned them down flat.

“Yet, looking back at those painful times, I can honestly say that I learned a lot from them. To the point where I can’t help but consider them all exceptionally worthwhile. As Benjamin Graham recounts:

“‘Adversity is bitter, but its uses may be sweet. Our loss was great; but in the end, we could count great compensations.’”

Back during my developer days, I truly believed in what I was doing. I can’t express how much I loved being a part of building up my community and the communities around me.

It wasn’t just about the money either. The money was great. I’ll be the first person to say as much. But it was money that came from doing something I saw as being worthwhile – complete with the individual jobs and economic improvements it encouraged.

As evidenced by the eventual fallout, it ended up encouraging a few too many jobs and economic improvements. But I’ve learned my lesson since that diversification is key to success.

That’s why, today, I don’t preach that your portfolio should be filled with nothing but REITs. It shouldn’t be.

Any and every asset class – whether real estate, precious metals, stocks, bonds, etc. – is fallible. Any and every asset class can come across hard times. Which is why you need to maintain a healthy balance of each (or at least many) of them.

...Originally Posted On Seeking Alpha

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The REIT sector led most of 2019, but has been down in recent months as the probability of a recession has decrease. However, I have my eye on a couple of REITS if things become a risk on environment again.

Below is the Real Estate Sector vs SPY.


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