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SHOW ME THE INVESTMENT INCOME!

  • Writer: Nest Capital MIC
    Nest Capital MIC
  • Aug 19, 2021
  • 2 min read

Retirement is an opportunity to move from a life of hard work into something a bit more leisurely. But retirement can also be a time of uncertainty.


As an investor, retirement marks the beginning of an important transition point.


Investing goals, risk tolerance and portfolio composition will shift from growing a nest egg to living off it. A change from embracing risk and volatility to more income and safety.


But what if your retirement nest egg is not where you want it to be to support your vision of the future?


Investors approaching retirement may be looking at a variety of options to support their current lifestyle or perhaps a new one. That means either dipping into investment principal or finding ways to generate new income streams.


Many are faced with spending their nest egg or finding passive income.


At one time, retirees could rely on income generated from traditional sources like dividends, bonds and GICs due to a favourable interest rate environment. The ability to rely on favourable interest rates as a form of income generation appears to be more difficult today.


With savings accounts at less than 1% and Canadian T-Bills running less than 2%, finding income with a lower risk profile and a good return is tough.


You still have some options.


For example, you could choose to go with GIC’s with a current return of give or take 3%.


You could pick up some corporate bonds.


Or you could look into a customized Life Annuity and let the insurance company take care of your investment and income needs for the balance of your life. Using an annuity calculator, you can calculate what this investment and income situation will look like, and they look a lot like GIC’s.


Income opportunities favoured by low-interest rates can include publicly traded REITs. A REIT will allow you to have exposure to specific parts of the real estate market, or a diversified real estate portfolio. Here you can access income, capital gains and distributions in a variety of combinations. But you also get some market risk and volatility.


Another income option in real estate would be mortgage lending through a Mortgage Investment Corporation (MIC). A MIC gives investors access to mortgages.


Mortgage Investment Corporations provide an income stream with low volatility. Investors can choose between a residential mortgage pure play or hybrid models that include residential and commercial or development mortgages.


MIC’s are professionally managed mortgage pools with returns ranging from 6-10% net of fees. The difference in return can be due to management fees and what type of mortgages the pool invests in.


Investing in a MIC means you can participate in real estate investing without having to own or have the responsibilities of a landlord. Not having to deal with “tenants and toilets” is a relief for retirees.


As a retiree, or soon to be one, minimizing risk exposure while earning income can add an important component to your portfolio.


Nobody knows where interest rates will go, but at the current levels, investors approaching retirement have less low risk, low volatility income options than previous retirees.


Private lending through a professionally managed structure like a Mortgage Investment Corporation can provide an answer to a retiree’s income conundrum.


Nest Capital is a mortgage investment corporation in Ontario that is focused on residential second mortgages in Ontario.

 
 
 

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Nest Capital has retained:

Atlas One Digital Securities Inc. and Finhaven Capital Inc.

as its exempt market dealers for the distribution of its securities.


Interested investors should contact:
Atlas One Digital Securities Inc. at ryan@atlasone.ca

Finhaven Capital Inc. at mike.poettcker@finhaven.com

If you are interested in investing, we will connect you with a registered exempt market dealer who can walk you through the investment process. Past performance is not intended to provide an indication of future performance. *The targeted returns are not guaranteed returns, nor are they meant to illustrate your minimum or maximum expected returns. Undue reliance should not be placed on such forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur and may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

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