Chris’ note: If you’re planning for retirement, today’s insight is a must-read.
A lot of folks stick to regular stocks to feather their nest eggs. But the upfront investment you need to fund just one year of retirement – not to mention the risk of a sudden crash like we saw at the start of the pandemic in March 2020 – may be too much for the returns on regular stocks to cover.
That’s why I want you to pay special attention today. Colleague Dave Forest has been handing his readers eye-popping wins from a little-known strategy for funding your retirement. It’s cheaper than buying stocks… and has much higher potential upside. As you’ll see below, one recommendation following this strategy in Dave’s Strategic Trader model portfolio went up 4,942%… in less than two years.
Plus, he’s hosting his first live event ever next Wednesday to share a deal using this strategy… one he says has the potential to make early investors more money than any deal he’s seen before. Make sure to sign up for that event here. Then read on as Dave introduces the strategy that’ll fuel these profits.
At the end of every month, I sit down and figure out what I spent.
I tally up food, gas, entertainment, and other costs of daily living.
I don’t have to do it. I’m not on a budget. But I find it interesting to see how much people spend to live.
This is the crux of planning for retirement. To figure out how much to save, you need an idea how much you’re going to spend.
According to the Bureau of Labor Statistics, the average household aged 65 or older spends $47,579 per year.
At age 75, yearly living costs are about $40,839.
That’s the average. You might need more or less depending on your plans. But that’s a ballpark target of what you need to be comfortable when you stop working.
So what does it take to pay for a year’s worth of retirement?
Let’s say you invest a retirement savings of $172,000 – the average amount folks in their 60s have saved. You’d need to make a 27.6% return in order to make $47,579. And you’d need a return of 23.7% to make $40,839.
Those returns are possible investing in U.S. stock market bellwether the S&P 500. In 2019, it returned 28.9%. In 2013, it did 29.6%.
But that’s cutting it close. Plus, the S&P 500 isn’t a reliable year-in, year-out gainer.
For example, if you’d invested $172,000 in 2016, you would have made just $16,409 – a 9.5% return.
That’d cover less than half the yearly spending for an average person in retirement.
And 2020 was a mediocre year, too. The S&P 500 delivered about 15%. That’s solid – but not nearly enough for a year’s worth of living.
What worries me most, though, are the down years.
In 2008, for example, the S&P 500 lost 38.5%.
And between 2000 and 2002, it had a run of three straight down years.
An average investor in 2000 to 2002 would have lost the equivalent of 1.5 years of retirement living expenses. That’s devastating.
The risk of losses on major stocks is one of biggest obstacles to people saving for retirement. I’ve spent years trying to figure out a safer way… without compromising upside.
Fortunately, it came together when I met John Pangere, my friend and co-editor at Strategic Trader.
John showed me his research on a type of investment called stock warrants.
Most investors have never heard of them. But their potential is so explosive, some of the world’s most prominent investors use them… including billionaire super-investor Warren Buffett.
I’m a geologist by trade. Commodities are my bread and butter. I’ve used warrants many times as part of my investments in mining companies.
In fact, I’ve even issued warrants to billionaire investors in companies I created in the past.
But John showed me ways to use these little-known securities to invest in some of the biggest, most mainstream sectors of the stock market.
And they can massively boost your retirement savings.
To illustrate this, let’s look at the performance of a real-life warrant for a company called Purple Innovation (PRPL). It’s a basic business. It sells mattresses.
We recommended this warrant to our Strategic Trader subscribers in early 2019. They cashed out in October 2020 for a 4,942% gain.
Amazingly, you don’t need to invest a lot of money to have a big impact.
Readers could have gotten in on the Purple Innovation warrants for as little as 19 cents. A $1,000 investment would have turned into $50,421 in under two years.
By comparison, a $1,000 investment in the S&P 500 would have turned into just $1,185.
But here’s the best part…
The past year was tough for the stock market. But even if stocks had taken a 38.5% shellacking as they did in the 2008 crash, you’d have lost only $385 on your $1,000 investment in Purple Innovation warrants.
You might have had to cut back on Starbucks lattes for a month or two. But it wouldn’t affect your ability to cover rent, food, or other necessities.
This shows the power of warrants for the average investor looking to grow their savings for retirement… without risking it all.
When people hear this, they sometimes think I’m cherry-picking an exceptional case.
After all, some rare stocks do return thousands of percent.
But with warrants, these outsized gains are much more common than with regular stocks.
Another of our Strategic Trader recommendations, Blink Charging (BLNK) warrants, gained 2,805% in five months. That’s enough to turn a $1,000 investment into $29,050.
And I’ve recently uncovered an opportunity to ride along Jeff Bezos’ coattails… on, you guessed it, a warrants deal.
I’ve never seen a deal with the potential to make my readers as much money as this. I believe if you get in before mid-November, you’ll be able to make 49 years’ worth of profits… in one trade.
It’s an opportunity so historic, I’m holding my first live event ever on Wednesday, October 20, at 8 p.m. ET to get the word out.
It’s called the “Zero to Retirement Summit.” Join me there… and I’ll give you all the details when I reveal Bezos’ next target.
The only other ways to get gains anywhere near this size are using complicated financial instruments such as call options or investing in cryptos.
Options are great for sophisticated investors who can dedicate a lot of time to studying the markets. But for regular folks saving for retirement, they can be complicated and extremely risky.
Warrants, on the other hand, trade just like regular stocks. You don’t need a special account – or insider knowledge – to buy them. You just plug in a ticker symbol like you would with any stock.
You can even buy warrants through most online discount brokerages.
This is the retirement answer we’ve been looking for. It combines the high upside potential of specialized stocks… with the ease of mainstream indexes.
I hope you’ll join me next Wednesday to learn more. You can reserve your free spot at my event here.
Keep walking the path,
Dave Forest
Editor, Strategic Trader