No. of Recommendations: 0
I had a conversation with a friend the other day that has sparked my thinking about this, so I'm curious what others out there think. The earlier discussion thread on annuities has also fueled the fire.....

I've been investing for a long time in many different vehicles: stocks, corporate bonds, CDs, mutual funds and real estate (rentals and speculative land). As I plan for the imminent retirement years, conventional wisdom "sorta" says high-yielding dividend stocks are the way to go. But when I think of earning enough in dividends to actually replace income in retirement years, I think that would call for investing a lot of money (say $100k) in a given stock for a dividend to actually help with your annual costs. And investing $100k in a company is a big leap of faith to take given your reliance on that company to operate ethically (Enron) and not make major business mistakes (Netflix -if it had a dividend).

With that being said, wouldn't real estate be a better solution at the end of the day? With the monthly rent check coming in -which doesn't really depend on a home's "market" value- wouldn't that be a better (maybe "steadier" is a better word) investment than stock dividends? Even if you paid a property management company to manage your rentals you could presumably get a better/steadier return than a dividend stock. And with less risk since stock prices/dividends can drop fairly quickly but rental rates rise and fall a lot slower, neighborhoods deteriorate a lot slower, etc, which makes the impact to your income more manageable.

Although I am diversified, I am thinking about lightening up on some of my other investments and go more heavily into real estate rentals.

Am I missing something here? Any insights appreciated.

canuck104

PS: I purposely didn't post this on the "rental" boards because I wanted input/feedback from those that don't own rentals as I think input from those with different opinions are always more helpful.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement