You Can't Save A Million (Like He Did)

Summary

• High Yield Landlord author R. Paul Drake just retired with well over a million dollars in savings.
• He built up these funds using methods that worked for the past 30 years and that are still advocated by many financial advisors.
• In our view what worked in the past will not work going forward, because of several major cyclical changes.
• We propose a way that you can build your own savings to high values in the future as we see it.
• I do much more than just articles at High Yield Landlord: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

Co-Produced with R. Paul Drake

This article is aimed at those who are well over 10 years from retirement. Your challenge is to effectively accumulate funds over the coming few decades. We don’t believe you can do it the way many Baby Boomers have. Investing circumstances are different.

To avoid confusion, we note that Jussi Askola (pictured above) is our leader at High Yield Landlord. He's obviously far from retirement. This article is co-written by and reflects the experiences of the oldest member of our team, R Paul Drake (“RPD”), who recently retired.

RPD entered retirement with well over a million dollars in retirement savings. We will share how this came about, some of which may prove useful to you. He began saving in his mid-20s, in the late 1970s. He spent a few years in various stock, bond, and option investments. This was a period of survival amidst high tax rates, high inflation, and economic stagnation. He also held some gold, some silver, and some real estate.

The age of IRAs, then 401ks, then many other similar account types began in the early 1980s. RPD took maximal advantage of these opportunities and they soon became his sole retirement savings path. He was fortunate to have larger savings opportunities that way, in his scientific and academic career, than most people did with the paltry 401ks of that era.

Three mega trends determined his opportunities and their fates. We take these in turn.

Interest Rates.

Figure 1 shows historical interest rates in the US. After those early years, the period during which RPD saved for retirement was coincident with declining interest rates and the greatest bond bull market in US history.

What matters greatly for you is that this also is true of every financial advisor you can find. Nearly all of

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

RPD is or soon will be long NOBL.