Investing For Retirement: The 3 Most Overlooked Asset Classes

Summary

• Stocks and bonds pay less than 2% in 2020.
• Even higher yielding sectors such as utilities and REITs only pay 4% to the parts.
• We present three overlooked asset classes to generate ~8% yield that's ideal for retirees.
• Looking for a portfolio of ideas like this one? Members of High Yield Landlord get exclusive access to our model portfolio. Get started today »

Retirees need steady income. And preferably, a lot of it. Unfortunately, in today’s market, it's practically impossible to earn substantial income that is secure from the broader stock market or traditional bonds.

The 10-year treasury (IEF) is down to just 1.8% - barely covering inflation and taxes:

source

The S&P 500 (SPY) is even worse at 1.7%:

Finally, even higher yielding sectors such as utilities (XLU) and REITs (VNQ) pay only ~4% to the most part. A 4% yield is really just 2.5% to 3% when accounting for taxes – and it's down to 1% to 1.5% after inflation. This might be enough if you have a significant asset base, but it won’t come even close for most individual investors.

Because stocks, bonds, utilities, and other mainstream investments cannot satisfy our need for income, we must be more strategic and look for opportunities in less-crowded sectors.

This is what we do at High Yield Landlord. We aim to earn an ~8% average yield that is safe and growing over time. We achieve this by investing in overlooked asset classes that are often backed by real estate. The reason why we like real estate-backed assets is because it greatly mitigates risks. The income is backed by long lease terms and all investments are backed by real tangible properties with durable and inflation-resistant values.

In today’s article, we cover three asset classes that you have probably never heard about. Yet, they are key to our high-yield strategy.

source

#1 – Overlooked Income: Property-Backed Loans

Ever since the great financial crisis, banking regulation has become much stricter, and unless you can fill in all the boxes, you won’t be able to qualify for a traditional mortgage loan.

As a result, property investors, flippers, and developers have had to become more creative with their financing solutions. And one

Analyst’s Disclosure:I am/we are long MNR; BYLOF; DIC ASSET. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.