We should all plan on enjoying our 70s while preserving capital. Even better, we can help our family build generational wealth while we travel the world.
There is much to accomplish in the later chapters of life, but it requires financial sophistication to achieve our goals.
Welcome back to the Bond Investing at Any Age Series (20s, 30s, 40s, 50s, 60s), where we protect what we earn while generating income.
Long-Form Content is the Future
Preserving capital. The main reason to invest in bonds is to protect the money we earn throughout our lives.
If we want to achieve a high rate of income, we can turn to income investing. Bonds are an excellent way to supplement our pension and social security.
The best way to preserve capital is by buying treasuries and holding them to maturity. Treasury bills, notes, and bonds all trade on the bond market.
You must buy these with the intent to hold them until maturity because you can lose money when selling. You can consider selling your bonds if the tides turn in your favor.
YouTubing vs. Your Job
Therefore, if you need an emergency fund, don’t use Treasuries. You can leverage high-yield savings accounts and certificates of deposit to keep your money accessible.
Creating Treasury Ladders. Treasuries are the perfect investment for building ladders. You can buy Treasuries from 3 months to 30 years in duration.
Therefore, depending on your circumstances, you can buy 1-year, 2-year, 5-year, etc. If you are planning a trip in two years, purchase some 2-year Notes.
By creating treasury ladders, you can ensure you keep your money safe, accessible and growing—albeit slowly.
High Yield Savings Accounts Reach 3%
Speeding up your returns. To drive some more income your way, try high-yield bond reinvestment. Let’s say you earn $15,000 in interest from Treasuries annually.
You can invest that $15,000 into high-yield bond closed-end funds by PIMCO. I personally invest in PDO, PDI, and PTY.
Your $15,000 can begin to generate $1,500/year in dividends. Before you know it, you’ll have a nice additional income stream from CEFs.
By taking the extra step to invest in CEFs, you are growing your income streams while protecting your capital. It’s a win-win scenario.
It’s all about the grandkids. Perhaps your greatest joy will be spending time with your grandkids. Of course, you’ll have the resources to help them financially.
Make Your Primary Residence Your Retirement Plan
What can you do to ensure generational wealth? One of my favorite tools for building wealth is the Series “I” Bonds.
Once your grandkids have social security numbers, you can invest $10,000 annually in their TreasuryDirect.gov accounts.
Series “I” Bonds earn interest and grow with inflation for 30 years. If you purchase these for your grandkids, they will enjoy them throughout college and beyond.
Series “I” Bonds even have a nice feature where you can spend them tax-free on college costs. This is a great bonus for your grandkids.
Overcoming Depression through Progression
What about your kids? Of course, the grandkids get all the attention, but what about your kids? I am sure they would love any assistance you can give.
Everyone can use income, so treasury and municipal bond funds will work great. Municipal bond funds typically do not pay federal tax, and Treasuries don’t pay state tax.
You’ll decide which investment vehicle is best depending on your kids’ situations. Either way, you’ll help them get through the harsh mid-life environment.
Taking care of yourself. Finally, we can turn the spotlight back on you. You will have anywhere from one to 30 years of life left.
Mortgage-Backed Securities vs. Treasury Bonds
You want to enjoy your time as best as possible. You don’t want to live on a tight fixed income. You’ll need to use high-yield bond reinvestment to ensure you generate enough revenue to beat inflation.
Trying to beat inflation while earning 3-4% will be brutal. Hopefully, you own a home or two that generates rental income that exceeds inflation.
I believe in total-life investing, which means we can’t depend solely on one type of asset. Bonds are outstanding for preserving capital but not growing wealth.
This means you want to think outside the box to continue to generate income. You can consult, coach, or mentor others in your given profession.
Retirement Planning with Index Funds
How about journaling your travels or your lifestyle? There are many ways to create income from thin air, and you must use whichever suits you.
Do not become stagnant, or inflation will grab hold. Also, staying active is a great way to live a longer, happier life.
Once you earn some cash flow, protect it with treasuries. When the treasury department pays you, invest in higher-yielding products like CEFs, baby bonds, and preferred shares.
Conclusion. Doing this correctly will keep your money safe at the top of the capital stack. Then, you’ll invest your interest income into higher-yielding (riskier) assets.
To Become Rich, You’ll Need Leverage
It may seem less than ideal to work a little during your 70s but bear with me. Have you seen people who live entirely on social security?
I have, and it’s not a pretty sight. If you are reading this, you want something more. You want a different outcome.
By focusing on generating income, you’ll stay hungry for tomorrow. You can become a writer, singer, or dog walker—anything works, and everything helps.
Your mind can create better returns than your bonds. However, bonds are great at protecting the income you earn. They also help build generational wealth through the years. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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