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Do You Want to be a Rentier?
Friday, 25 June 2021 15:52

Rentier isn't the French pronunciation of renter. It is a completely different French word that has retained its French pronunciation from 1798 to this day.

Rentier is a noun. Hear it pronounced.

Rentier: A person of independent means; someone living off the income from investments.

The source of rentiers' wealth is no longer a concern of theirs. While their wealth may be inherited, the majority earned this wealth during their own lifetime. According to Drs. Thomas Stanley and William Danko, about 80% of the affluent did not inherit their wealth.

Rentiers may be referred to as the "idle class" by wage and salary workers that consume all they earn. Certain politicians may jump on that bandwagon in an effort to bamboozle plantation voters into casting their votes in exchange for their false promise a blue sky for everyone. We all know that these charlatans who use petty jealousy to get votes have no intention of actually delivering on their false promises. We have over 240 years of evidence to back this up, in case anyone isn't paying attention.

You have a much better chance of becoming a rentier by voting with your dollars. How you spend, how you save, and how you invest, are things you can control.

Some of the latest rentiers are members of the FIRE movement. You don't have to be rich in order to live off your investments, but you do need to be disciplined and you need to live beneath your means.

The sources of a rentier's income can be from any investment project that produces positive cash flows, for example (in no particular order):

  • Rents
  • Bond coupons
  • Stock dividends
  • Annuities
  • Life insurance dividends and loans
  • Partnership distributions
  • Private mortgages and loans
  • Reverse mortgages
  • Royalties
  • Real Estate Investment Trust dividends
  • Direct participation programs
  • Bank deposits (Savings Accounts, Certificates of Deposit, Money Market Accounts)

When I review my rentier clients' situation, I find that most of them have multiple and diverse sources of passive income. A rare few have all their eggs in one basket.

“Whatever your income, always live below your means.”

Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of America's Wealthy

How can I help you? There are two specific areas where I can help you become a rentier and two other areas where I can mitigate the risks of life that can prevent you from becoming a rentier, or cause you to lose your rentier status, in all the other investment project areas.

For more information, contact me today.