Self Designed Communties

Family House Picture

Image courtesy of arztsamui at FreeDigitalPhotos.net

We have talked previously about housing alternatives in retirement. A recent article I read in Marketwatch talked about some people that are living this reality. Below is the article:

http://www.marketwatch.com/story/create-your-own-retirement-community-2015-04-06?page=1

Comparison to “55 Plus” communities

These housing arrangements share some things in common with builder’s “55 and Over” communities, but they are self created by groups of people who have carved out little communities for their shared use. Some people don’t like having all the people the same age group in a big retirement community. They would prefer a tiny community within a large general population community of many ages.

While these communities will vary greatly, here are some common chracteristics:

People watch out for each other

People share resources – this can be appliances, tools, cars, or almost anything

People share skills – maybe somebody is good at carpentry, another is good with computers and still another likes to fix cars

Sometimes there are shared common areas – like a shared backyard or deck

In general people have the opportunity to form lifetime friendships

Some Self-Created Community Ideas

Here are just a few examples of how a shared community might be created:

A townhouse or condo with 3 bedrooms is converted to 3 little studio apartments with shared areas for watching TV, relaxing, snd socializing.

A 3 or 4 bedroom fixer upper is gutted and converted into three apartments with a shared backyard and storage areas.

A group of friends take over a building in an existing apartment complex. Say a complex has several bulldings with 8 apartments in each building. You make an arrangement with the owner so 8 friends can reside in the building and created your own little community without the need to buy a building.

A group of retirees take over and renovate a small dilapidated motel – a recent trip along the old Route 66 gave me this idea. There are still some struggling motels that were bypassed by the interstates long ago. Some are located in nice little communities. Why not take one over with a group of friends?

Share a big McMansion. As some baby boomers shed their McMansions there might be some opportunities for a small group of people to share them. Note that some communities limit the number of unrelated people that can occupy a single house. However I see this changing as millions of retired baby boomers look for affordable housing alternatives.

Some questions to consider

No arrangement is ever perfect and difficult scenarios will sometimes arise that affect all members of the community. None of these reasons should stop the idea. Here are just a couple:

What happens when someone cannot keep up financially?

People get sick and grow old, both physically and mentally. What happens in this situation?

What happens if someone gets ill?

What happens when someone passes away?  The reality is that this will happen someday. Is the deceased person’s share  in the community sold? Split up amongst the remaining membes? How are expenses handled while the transition is taking place. Are legal documents in place to handle this situation?

I hope this article keeps you thinking about housing alternatives and the need for community in retirement. What are your ideas for self created communities?

Multiple Income Streams – Part Two

Money in Hand Photo

Image courtesy of anankkml at FreeDigitalPhotos.net

In a previous post (Multiple Income Streams Part One) we talked about the importance of multiple streams of income in retirement. This included the impact of multiple income streams for those with various levels of retirement assets. In this post we’ll expand on those ideas by broadly identifying where some of that income can come from and propose a general plan.

Income generally has a way of progressing from less passive to more passive during life. If you remember from the previous post we basically defined passive income as income that you do not have to devote a lot of time to keep it coming. No income is completely passive but at one side of the spectrum you might have a job that requires lots of time and effort (not passive at all.) On the other side of the spectrum you might have dividend income where the checks just keep coming (unless the company stops paying.)

In between a job and dividend you might have various business such as service businesses, where you trade your time and talent for income.

With this in mind let’s consider a mix of five income sources to look at how you might achieve multiple stream of income:

Job

Jobs are the least passive but they might have the advantage of being the most reliable and sometimes even provide benefits like health insurance. For a retiree this might mean a part time job that assures at least some fairly reliable income.

Part Time Service Business

Also not very passive might be a service business. Examples might include consulting or even babysitting. Here you are trading your time for income but you have more flexibility in when and how much you work. And as long as you do the work you usually get paid! So it is fairly reliable.

Selling things

Selling things is probably somewhere in the middle when it comes to passivity. Easiest example is selling things from around the house that you no longer need. For a little effort on EBay or Craigslist you might collect a considerable sum. Of course you eventually run out of things to sell, but it is a good way to initially establish an additional stream of income.

Recurring income product

This is a product you create that requires a lot of time up front but can provide a lasting income stream. For example suppose you write a book that you self publish on Amazon. There is a lot of work initially but you can potentially receive an income forever from sales of the book, and that income is fairly passive.

Stock Dividends, Annuities, and Social Security

Stock Dividends are probably one of the most passive forms of income. A similar example might be an annuity. The basic principal is that you invest money and receive a stream of income from that investment. Social Security is similar in that you paid in a long time in order to receive a series of payments.

Putting it all together

After thinking about the above income sources it isn’t hard to see where multiple income stream might come from. For example:

  1. You start with a part time job.
  2. You do a little pet sitting and begin establish a list of repeat customers.
  3. You start selling things around the house on Ebay and Craiglist. Maybe you start small and generate about $50 a month.
  4. You write a little book called “How to start a pet sitting business.” You sell it on Amazon and it generates some money every month.
  5. You save your money from the above and buy some dividend paying stocks and a small annuity. This gives you another income stream on top of your Social Security.

As you can see it isn’t too hard to envision multiple streams of income. The idea is to actually take action and start with the more non-passive income types and then maybe as you get older to build up more of the passive sources. Good Luck!

Until next time…

How to retire without retiring

Older Businessman

Image courtesy of photostock at FreeDigitalPhotos.net

If you have read this blog for a while you would get a sense that we have dismissed the “traditional” view of retirement. No sitting around in rocking chairs here (well maybe once in a while!) We have pretty much said that only you can define retirement. With that in mind I would like to propose the somewhat radical idea that you can retire without retiring!

Retirement is a different state of mind and a new stage of life

The closest we have come to a definition of retirement is that it is a time of change. It is a different state of mind and the beginning of a new stage in life. We have also said that many of us will keep working, and some at the same company or business. However we have mostly implied that the actual job we do will change, perhaps with fewer hours.

I propose that you might be able to “retire” without changing your actual job or profession, but maybe just by changing your focus.

Our career focus can change

Much of our focus during our career is on job aspects that don’t really mean much in your retirement years. Career advancement may be less important. Office politics really don’t matter as much. Even salary increases are not as important if it means working long hours that could be spent on things that we care more about.

So, during our working retirement what things can we eliminate or at least drastically change:

Doing everything with an idea toward career advancement.
Playing office politics to assure that next promotion.
Working ridiculous hours to try and get that bigger salary increase.
And you can think of others.

And what can we start emphasizing:

Spending more time helping people, including your boss!
Focus on people you care about.
Focus on your hobbies and causes, rather than that next career advancement.

We’re not talking about short changing our employer

Some might be thinking that we are short changing our employers by taking such an approach. That is not true. When you start eliminating the time spent on such unproductive endeavors as office politics it allows more time for real work. And let’s face it, a lot of the extra hours that people put in are meant to impress the boss more than anything else. There are numerous studies that show that productivity drops considerably after a certain point and there may even be more mistakes.

The new focus is good for employer and employee

Enlightened companies might even encourage “retirement without retiring.” We are talking here about their most senior and seasoned employees. These employees have much to teach and many tips to pass on to the younger coworkers. Because they are not involved in office politics they can act a “bridge” between groups and help improve morale and productivity.

For the employee “Retirement without retiring” has many advantages. Obviously keeping a full time income allows you to save more funds in your nest egg and keep from having to access that nest egg for income. It keeps you mentally sharp and socially connected. You can still enjoy your hobbies and causes and may find you have more time for them than you expected. Less overtime hours and a mind that doesn’t spend after work hours plotting your next career move will do that!

I realize that this plan will not work for everyone. However I thing it may for many and is worth exploring.

Until next time…