Forget About Working Until 67: Invest in Property Instead
- There are many reasons for wanting to retire and enjoy life
- Property offers a wonderful way of growing your money in the long-term and of gaining monthly income
- It is easy to start with a buy to let mortgage and interest rates are very low now
If you rely on the State Pension for a comfortable retirement, you will be waiting around for a long time. Recent changes mean that many of us would have to wait until we reach 67 to do this. Thankfully, there is a better way of managing your money to make your golden years better.
Why Retire Early?
The first point to cover is why you would even want to retire early in the first place. If you enjoy your career maybe you would be happy to carry on working for a bit longer. Well, just consider the following things that you could do after early retirement if you have good income or savings.
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- Spend more time with family and friends
- Travel the world at your own pace
- Carry out charity work for a good cause that is close to your heart
- Live where you have always wanted to be, rather than close to your place of work
- Discover interesting new hobbies or dedicate your time to what you’ve always wanted to do
Surveys show that 23.6% of British workers think that career success should be achieved by the age of 40. It would make sense to enjoy a couple of decades of a good career and then move on to a different phase in your life.
Better healthcare and improved living conditions now mean that we live longer than our ancestors. The life expectancy for a girl born in the 1840s was 42. Now, it is 83. For males, it has risen from 40 to 79.
Retire at 67 and you might get to enjoy a decade or so of retired life. Do it at 50 and you could have three times as many years of freedom. Of course, with longer lives and more time spent retired comes the responsibility of planning your finances better. This is where property investment can work wonders.
Why Property is Perfect for Retirement Investing
Some types of investment are about risky, short-term gains. This isn’t right for retirement plans, unless you are close to retiring and need to urgently increase your funds.
A better approach is to choose a safe and steady approach that grows and grows over years. Ideally, you will also get a regular income from it in the future. Properties are terrific investments in this respect.
The British property market suffers its fair shares of ups and downs. You might worry about whether you buy at the wrong and end up losing money. However, the key to this plan is long-term growth.
If we look at the market, we can see that the long-term trend is for price rises. There are peaks and troughs along the way, but an investment over 15, 20 or more years represents about as risk-free a move as you can make.
Look at this graph for British property prices from 1975 onwards. As a short-term investment, there are periods when you could have lost money. However, if you look at in 20 year periods, the only time when you might have made a poor investment is between 2004 and 2007.
The chance to gain rental income is another huge factor. Having money coming in to your account every single month will give you a massive amount of flexibility.
How to Get Started
You might think that getting started on investing in property is incredibly difficult and expensive. It doesn’t have to be, although you should be aware of the risk of over-stretching financially.
For most people, getting a buy to let mortgage is the easiest approach. With interest rates so low now, this is a great time to get a mortgage. The rental income that you receive should then be enough to cover the repayments.
Choosing the right property at the right price is crucial. It needs to be in an area with a decent degree of rental demand and where there is a good chance of price increases. If it is a place you can re-decorate or otherwise improve to boost its value then so much the better.
It is then up to you whether you try and build up a portfolio of properties over the years. If you do, this will increase the risks but will also give you more chance of big profits.
The chance of enjoying a long, comfortable retirement with financial security is now greater than it has been in human history. There is no excuse for not grabbing your opportunity before it is too late.