Let me share one of my favorite stories about money strategy. The couple—George and Phyllis—aren’t affluent, but they’re not struggling. 

Their main investment strategy beyond their individual jobs is this: they bought homes in places where they like to vacation, such as New England, Florida, and Colorado. They took advantage of attractive interest rates when they were low and found properties that had motivated sellers. They also made sure to buy homes that were large enough to hold their own family. So they can spend their family vacations at one of the spots, rotate locations, and then rent them out the rest of the year.

With their kids grown, George and Phyllis can now use those properties for their own kids to enjoy for their family vacations, and they have enough properties that they can rotate and enjoy the benefits of each location throughout the year . 

During their child-rearing years, they paid down the principal on their mortgage loans and received valuable tax deductions to shelter their family income. Also they can use a 1031 exchange to defer gains on the eventual sale profits and reduce taxes paid to Uncle Sam.

Think about their financial advantage: they can generate income from the rentals (enough to pay the mortgage); they save money on their own vacations because they’re not paying hotel or rental costs; they could make even more money if and when they’re ready to sell properties, as real estate can be an attractive  income generator. In fact it’s a very smart retirement strategy if they want to sell one or more properties when they’re ready to retire.

I share this because George and Phyllis are a good example of having a balanced portfolio with liquid and nonliquid assets in a diversified portfolio. (Note: where fiduciaries can come in is helping to negotiate borrowing rates, identify real estate agents to select well-located properties, work through tax implications, and take care of many other financial and logistical details.)

Let’s also take a look at the bigger picture: They not only created a smart financial strategy. They created opportunities to spend time with the people they love, doing what they enjoy and building the family unity they want as the whole family gathers to enjoy the family properties.

They created wealth. And they created something even more valuable… family unity

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