Wayne and I opened up a big can of worms in our articles last week:
The retirement crisis.
As we explained, the average 50-year-old today has less than $50,000 saved for retirement…
And 45% of Americans have nothing saved for retirement at all — zero.
But now that we’ve recognized the problem, it’s time to find some solutions.
So today, that’s exactly what I’m going to do.
Urgent: Retirement Crisis
As we showed you last week (here and here), even if you already have a nest egg saved up…
And even if you still have several years before you retire…
Two imminent threats could quickly blow up your retirement plans:
The first is a nasty stock market correction that could leave your nest egg in tatters…
And the second is a U.S. Social Security program that’s already in tatters.
Clearly, we need to find some new solutions to this crisis — and we need to do it now.
So today we wanted to share a solution you might not be thinking about…
A Simple Solution for a Better Retirement
One of the best ways to get out of this retirement crisis is very simple:
Build a bigger nest egg.
So now I’ll let you in on my favorite strategy to build your nest egg fast.
It all starts with the portfolio you have now…
The “Average Investor’s” Portfolio
If you’re like most folks, you probably have some stocks, some bonds, and maybe a REIT or two.
Historically, a balanced portfolio like that has returned about 6% a year.
6% a year isn’t “bad”…
But if you didn’t start investing until later in life, or if you’re still recovering from the 2008 crash, it might not be enough to get you where you’re going.
With a return like that, you may have to delay your retirement — or worse yet, you may have to keep working indefinitely.
But now I want to reveal a tiny tweak you can make to your portfolio that could have a big financial impact…
In fact, this one change could help you double your overall returns.
Here’s The Secret...
As long-time Crowdability readers already know, historically, early-stage private equity investments — in other words, start-ups — have trounced the stock market:
As an asset class, early-stage investments have returned about 27% per year.
But there’s no need to re-arrange your whole portfolio just to take advantage of those market-beating returns…
You see, simply by adding a tiny amount of private equity to your portfolio, you can dramatically increase your overall returns.
In fact, CNBC recently reported that this asset class gives investors like you “an easy way to nearly double the equity return that your 401(k) is generating.”
Let me show you how this is possible…
Proof: Double Your Returns
Let’s assume you have a portfolio worth $100,000.
If you earn 6% per year by investing in stocks and bonds, over 10 years, your portfolio would turn into $179,000.
That’s a 79% return. Not bad.
But look what happens when you add some private equity…
Assume you keep 90% of your assets ($90,000) in stocks and bonds, and put the remaining $10,000 into private equity.
At 6% per year, over ten years, the $90,000 would turn into $161,000.
But given the 27% historical annual returns of private equity, over 10 years, that $10,000 would turn into $109,000.
So in total, your portfolio would now be worth $270,000. That’s a 170% return.
So a 10% allocation to private equity more than doubled your returns:
Your returns went from 79%... to 170%.
But What If You’re Starting from Zero?
If you have some time before you retire — and you have some spare capital to invest — the strategy we just told you about is the best way we know to grow your portfolio.
But if you’re getting close to retiring or you’re already retired, it’s a different story.
Furthermore, what if you have very little money saved up — or no money saved at all?
Well, if that’s your situation, stay tuned, because we have a solution for you….
And tomorrow, Wayne’s going to tell you about it.
Happy Investing
Best Regards,
Founder
Crowdability.com
