‘I stopped a million dollars and all I got was forty thousands dollars per year’.

Prey that might as well be the slogan many retirees wear.

In truth, millions of older people do not have one million dollars in their personal savings. It’s significantly less for the actual majority: currently, the average 65-74-year-old has only around $609,230 saved .

So based on the known 4% rule, those individuals retiring can only be allowed to take $24,369 per year from the money saved. Yes, great profits but that’s not exactly the golden years you’ve been dreaming of are they?

The truth is, that the classical model of retirement is problematic. It is just too much for the pocket and the numbers no longer all add up together.

But what is there that is so much better that can help you prepare for retirement—and you don’t need to be_ix-1a-forcing yourself to follow a restrictive diet to do it.

The Problem with Traditional Investments: Volatility and Uncertainty

Of course, stocks can be good performers in the long run, generating roughly about 10% yearly on average. But “average” does not mean reliable, steady or consistent so those entities cannot simply be considered as good or bad.

At times, or more often in some years or even decades, the prices go down so much that retirees struggle.

This rule is the famous 4% rule, which is aimed at avoiding the most frightful scenario for retirees – to exhaust the available money. It relied on the lowest pre Crash 30 year averages and to retiree’s recommended a withdrawal of $4,000 in the initial year and then adjust for inflation. The presumption here is that this would keep them from spending down all their retirement savings even if the worst happens.

But here’s the kicker: While they are getting an actual 10% returns they are only getting 4% and the majority of them are over-saving and dying with hundreds of dollars they don’t need.

With $1 million saved and a $200,000 — $40,000 yearly income, you’d feel like you worked so hard for nothing. There’s a better way.

In How Real Estate Changes the Game,

Some of the related findings are: rather than investing in the equities and fixed income, securities, more and more investors are now looking at properties for better and better returns. You can make 10 percent to 12 percent on your debt investments and 15 percent plus, on equity investments in case of real estate.

Here’s the best part: those returns are real-time. Real estate debt investment provides you with monthly cash flows and on the other hand also provide predictable incomes as well as some equity from the sale of the property.

Worried about risk? Think again. This is to refute the typical Provo that high returns involve high risks. Indeed, successful real estate investors seek out what is called asymmetric returns—high likelihood, low risk investments.

For instance, consider an experienced property trader. Once, I talked to one flipper, who did 300 properties. He said that he had had a success rate of between 93 and 95 percent. There’s bound to be the odd one or two missed but when you are flipping 70-90 times a year, the profits balance out in your favor.

Another recent investment of mine returned 10% interest with a personal and corporate guarantee on a company that had $15+ million in real estate equity. Does that sound risky? Not at all.

And here’s the kicker: If you want to earn $40,000 solely from properties, then, you only need to save $400,000 and not a million. This is how, depending on what you do, real estate can totally turn your retirement math around.

Guide to Getting Rich: How to Avoid Failure from the Stock Market to Real Estate

A particular with the threats associated with stock is the bitter failure to retire and find a stock market crash soon after. In a downturn you are likely to be left nursing a loss after selling stock as the market dispels your dreams of making a kill in the near future.

This is known as sequence of returns risk—and when these market cycles occur is as valuable as how much you make in the long-run.

How do you dodge this? If there is enough other income from properties such as houses, so as to do with early retirement years what needs to be done in difficult time. Since you will be having a continuous income from your real estate investments you will not bother whether to sell the stocks at wrong times.

Strategy: That is investing in Real Estate Now and Stocks later.

Here’s how I see it: The idea of stocks is perfect for long-term capital gains, but they’re almost impossible to use for generating short-term income. I am pretty sure my stocks will increase in the next 30 years, but I do not know how it is going to be like in the next three years.

That is why I depend on real estates to get steady, secure income at present times. As for me, I can sell off my stocks at later time if I require cash and this option is preferred to begging. And they will be as easy as succession to my family once I am no longer around.

Hence through private real estate partnership, debt funds and syndications, I generate good income today. There are investments that offer already, on the comforts of their fund, like the land-flipping fund that generates 16% annually. Some others make at least quarterly distributions and the cash on cash returns being between four and eight percent.

As such, some investments will be sold to get returns in some few years while others will be refinanced to give my initial capital back plus an income stream. Motivated deals might not make profit for the first year or quarter, or even two, but they become sources of big earnings later on.

The bottom line: I actually don’t even consider the 4% rule. I’m earning better returns at this time-period as they are better than those before plus do not reflect influence from the market.

The Key to Success: Minimizing Risk

This simple statement captures my thought process when considering any real estate transactions: ‘Lots of winners, fewer losers, fewer still big losers.’

Yes of course, you can find lots of real estate investment opportunities that promise 15%+ rates of return. Not all of them are of the same risk level, though. The caveat is to identify which of these give substantial protection when the price is on the downside.

It means that efficient investments will allow creating the passive income that covers all expenses, without having to gamble with stock or use the utterly ineffective 4% rule.

And that’s how you win at retirement – by constructing a plan that is effective in practice, rather than in theory.