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The key to a successful transition into retirement lies with several tactics, and preparation — both financial and non-financial — is among the most significant, according to one expert.

“The highest single correlation to that success is how much time you spend preparing prior to retirement — not only on the financial elements, which is obvious, and everybody does it, but not as obvious is the non-financial side,” said Fritz Gilbert, author of “The Keys to a Successful Retirement” and guest on a recent episode of Yahoo Finance’s Decoding Retirement.

According to Gilbert, who also publishes the Retirement Manifesto blog, the more time spent planning for both sides of retirement, the higher the chances that “you’ll find those things in retirement that will bring you the sense of fulfillment that you’re hoping to have in retirement.”

Many prospective retirees don’t start thinking about their post-retirement plans until after they’ve left the workforce. Gilbert, however, took a different approach, beginning his planning years in advance — a move he credits as instrumental to his success.

“It certainly helps,” he said. “It’s been demonstrated that the more you do in advance in terms of this planning, the smoother that transition will be.”

In order for retirees to ensure they have enough money to maintain their desired lifestyle, Gilbert recommended tracking spending before even entering retirement.

“You can’t go into retirement without having a good baseline of spending,” he said. “It’s a math problem, ultimately. And the more variables that you can eliminate, the better your plan will be.”

Read more: Retirement planning: A step-by-step guide

According to Boston College’s National Retirement Risk Index, 39% of working-age households will not be able to maintain their standard of living in retirement.

In Gilbert’s case, he and his wife tracked every expense for 11 months to establish a baseline and then adjusted for retirement by accounting for downsizing, travel, and other changes. He also used tools like the 4% rule (spending 4% of your portfolio annually) as a guide.

“See how it compares to that estimated spending number,” he said, noting that if it’s close, you should be fine. But if it’s not close, you’ll need to consider working longer or cutting expenses.

Gilbert also recommended his “90/10 rule.” Before retirement, the self-described spreadsheet nerd said he spent 90% of his time thinking about money and just 10% of his time focused on the non-financial side of retirement.

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“I was a real money nerd,” he said. “I was really focused on the numbers.”

However, once he determined that his finances were secure and he retired, the time he spent focusing on money completely flipped.

“As that transition happens, you find yourself thinking less about the money because you’ve kind of worked through the kinks, and you know what you have to spend,” he said. “And you start thinking about, what am I going to do with my life? What’s going to get me that fulfillment and that excitement every day? And it’s not the money. Money is a means to an end. But as you get into retirement, you start looking for the end and not just the means.”

And that shift came as a surprise to Gilbert. “It’s a mental shift that I was not expecting,” he said. “It was one of my bigger surprises. It’s a pretty common reality that you do worry about (money) a lot less after you settle in.”

Gilbert explained how work often provides people with the “big five”: identity, structure, purpose, a sense of accomplishment, and relationships.

Retirees have to find a way to replace those. How might they go about doing that? First and foremost, it’s vital to recognize the importance of replacing the big five since they disappear once a retiree leaves work.

Many struggle early in retirement to find structure, purpose, or relationships, Gilbert said. “That’s when you’re starting to recognize that [you’ve] lost these things. Suddenly you have no structure in your life.”

In his case, Gilbert began replacing the “big five” by starting his blog three years before retiring. “I was looking for things that could potentially develop into things that give me fulfillment in retirement,” he said. “So I pursued it … and what does that give me now?”

In short, it’s given him a sense of identity, purpose, and structure.

That’s why he encourages both prospective and current retirees to replace the “big five” by actively exploring their curiosities.

“Pursuing your curiosity is not a skillset that we’ve exercised for a long time,” Gilbert said. “So it’s rebuilding that muscle and learning to explore and just have fun with it and recognize you’re going to try a lot of things that aren’t going to work … it’s a serendipitous process. It’s not a spreadsheet. But if you get better with it in time.”

Retirement isn’t just an individual decision — it also affects the entire household.

Gilbert emphasized the importance of discussing expectations before retirement. In his own experience, he and his wife conducted a “test retirement,” spending 10 days together to talk about their goals, the balance between “me time” and “we time,” and their travel preferences.

It also helped to do regular check-ins post-retirement to address changing needs and expectations, he said.

Despite all his planning and preparation, retirement did come with several unexpected surprises and challenges for Gilbert.

Transitioning from a saving mindset to a spending one was harder than anticipated.

“It’s tough to shift from building your nest egg to using it, knowing it has to last a lifetime,” he said. And that’s especially the case for retirees who are worried about running out of money. “It’s a very common tendency to continue to be conservative [and] underspend.”

In 2024, 67% of retiree respondents in a Goldman Sachs survey indicated they had too many monthly expenses, while 55% reported credit card debt.

Gilbert suggested using the bucket approach to creating a retirement income plan as one way to address the fear of running out of money. The bucket approach involves dividing your assets into separate “buckets,” each designated for a specific time horizon or purpose.

Typically, it includes a short-term bucket, which holds cash or low-risk investments to cover immediate expenses (e.g., 1–3 years); a mid-term bucket, which contains moderately conservative investments for expenses in the next 3–10 years; and a long-term bucket, which includes growth-oriented investments, like stocks, intended for use 10-plus years into retirement.

In terms of mindset, Gilbert’s retirement turned out just as he imagined: He pursued his curiosity and explored new interests as he planned.

However, where that mindset has taken him has been completely unexpected. For instance, he never thought he’d have a woodworking shop or a dedicated writing studio, but those came about through unexpected opportunities, like charity work.

“The biggest surprises — and the greatest excitement — have come from following where my curiosity has led me,” Gilbert said.

He also discovered that he could find fulfillment in retirement by focusing on others. Retirement, he said, is an excellent time to give back, whether through mentoring, volunteering, or charitable work.

“Start looking at people that maybe haven’t made it yet,” he said. “And find a way to use your time to benefit those in need.”

Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.

Bill Ackman and his fund Pershing Square Capital Management are big fans of the real estate development company Howard Hughes Holdings (NYSE: HHH). In 2010, Pershing, along with several big private equity firms, capitalized the company in a rights offering that valued shares at $47.62.

While Ackman is pleased with management and the work they’ve done over the last decade-and-a-half, he has very little to show for it. The stock returned 35% between 2010 and August 2023 before Ackman and Pershing began to intervene, which equates to a 2.2% compound annual gain.

However, Ackman isn’t giving up. On the contrary, the billionaire is doubling down. Now he’s proposing to purchase a sizable amount of the remaining public float because he wants to hold the stock “forever.”

Under the proposal sent in a letter to Howard Hughes’ board of directors, Pershing Square’s holding company would form a new subsidiary to acquire over 11.7 million shares from the outstanding float at $85 per share in a transaction valued at $1 billion. There were over 31.2 million outstanding shares on Jan. 13.

Additionally, Pershing would simultaneously conduct a $500 million share repurchase program at $85 per share for over 5.8 million shares from the public float, financed by new bonds issued by the company. The subsidiary created by Pershing would eventually merge back into Howard Hughes and keep the same management team in place.

The $85 offer represented an 18.4% premium to Howard Hughes’ stock price on Jan. 10 and a 38.3% premium from Aug. 6 of last year, when Pershing filed a 13D form with the Securities and Exchange Commission, hinting it was evaluating such a transaction. Pershing already owned close to 38% of outstanding shares before the proposal.

If approved, the deal would increase Pershing’s stake to somewhere in the range of 61.1% to 69.2% of outstanding shares. It all depends on how shareholders respond to the deal. Shareholders can take $85 per share in cash or roll their position into the post-merger company. The intent is to end up with a public float of about 31% of outstanding capital.

Ackman estimates that if all shareholders involved in the potential transaction elect to take cash, 56.4% of them would receive cash as a pro-rated outcome. The company will then repurchase over 5.8 million shares that it will effectively retire. If all shareholders elected to roll over their position, then shareholders controlling nearly 38% of the public float would be exchanged for $85 per share in cash, and Howard Hughes would add $500 million of capital to its balance sheet from the bond financing.

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There are many secular trends that have been shaping our economy in recent memory. One area that has deservedly gotten a lot of attention is the intersection of finance and technology.

There are numerous so-called fintech stocks to choose from. However, investors might have their eyes on PayPal (NASDAQ: PYPL) and Visa (NYSE: V), both of which possess favorable qualities. Which of these payment enterprises is the better one to buy in 2025?

One similarity you’ll notice with these companies is that their economic moats are supported by network effects. PayPal has 432 million active users, a base that consists of merchants and consumers. As the platforms get larger, it becomes more valuable to everyone.

Visa, on the other hand, counts a whopping 4.5 billion active cards in use across the globe. These are accepted at more than 130 million merchant locations worldwide. Again, as the card and merchant base grow, the network becomes increasingly valuable to both parties.

PayPal and Visa benefit from the prevalence of cashless transactions, a secular trend that still has a long way to go. According to the Pew Research Center, 58% of Americans still use cash for some or all of their transactions in a typical week. This data is from 2022, so that share has likely come down. However, it shows the runway cashless transactions broadly, and PayPal and Visa specifically, have. This is true even in developed economies.

Investors will definitely appreciate that these businesses are financially lucrative. In the past five years, PayPal’s operating margin has averaged 16.4%. Visa’s crushes this figure, with its average operating margin on a trailing-five-year basis coming in at a ridiculous 66.1%.

There are also some differences investors should keep in mind. For starters, PayPal’s valuation is cheaper. It trades at a price-to-earnings (P/E) ratio of 20 right now. That’s not only a 55% discount to its historical average valuation, but it’s also well below Visa’s 32 P/E multiple. To be fair, though, Visa’s valuation is 8% below its trailing-10-year average.

However, Visa’s premium valuation over PayPal is justified. This is the superior business, with much steadier financial performance and far better profitability.

Plus, Visa faces minimal threats of disruption since it’s so ingrained in our economy, as it handled $16 trillion in annualized payment volume last fiscal quarter. Just imagine the turmoil that would be caused if the Visa network went down. A sizable chunk of global commerce would be on pause.

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Nucor (NYSE: NUE) is a steel company, and that has major implications for its financial performance, given the inherent cyclicality of the steel industry. However, Nucor has managed to achieve an incredible feat despite the cyclical nature of the industry in which it operates.

Indeed, the company has joined the elite group known as Dividend Kings thanks to its 51 consecutive annual dividend increases. Here’s why now, with the stock down by around 33% from recent highs, is a good time to buy Nucor, with the plan to hold on to it forever.

You would think that a stock losing around a third of its value in roughly a year would be a harrowing experience. In some ways it is, but when it comes to Nucor, well, it’s not an unusual event. It lost about as much in 2022, and in even less time.

In fact, if you look back over the last few decades, Nucor’s shares have lost 25% or more of their value more than a dozen times. This is not the stock for investors with weak stomachs. If you can’t handle this level of volatility, you should avoid Nucor altogether.

The thing is, since the early 1990s, Nucor’s total return, which includes reinvested dividends, has bested what you would have achieved if you had owned the SPDR S&P 500 Trust (NYSEMKT: SPY). Basically, despite the volatility, and even after the most recent declines, Nucor’s stock price has marched impressively higher over time.

The stock price volatility here isn’t really shocking given that the steel industry is highly cyclical. Steel goes into everything from bridges to buildings to home appliances.

When commodity prices are weak because of falling demand, Nucor’s top and bottom lines will fall. That’s basically what’s happening right now, with the company’s earnings off materially from recent peaks.

The company is well aware of the industry’s dynamics and has long focused on having a strong balance sheet so it can survive the normal downturns. The debt-to-equity ratio is around 0.33 today, which would be reasonable for just about any company.

It has also built a diversified business, with a material number of value-added products. Such products have higher margins, and the diversification means there are more growth levers to pull even when the steel industry is weak, broadly speaking.

Nucor also has a habit of investing when the sector is on the outs. Management often talks about higher highs and higher lows with regard to earnings, which basically means it is always looking to improve its business no matter the point in the steel cycle. The current downturn is no exception, with capital spending of around $3 billion over the 12 months through the end of the third quarter of 2024. That’s well above the recent average run rate of roughly $1.9 billion a year.

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According to third-party estimates, the average driver in the United States spends 54 hours a year stuck in traffic. Multiplied by 243 million total drivers, that is 13 billion cumulative hours spent in traffic every year in the United States. Globally, the figure is likely over 100 billion hours. Time, money, and quality of life are lost by sitting in your car stuck on the road.

What if there were a company aiming to help solve this issue? That is the goal of Archer Aviation (NYSE: ACHR) and other electric vertical takeoff taxi (eVTOL) companies. With an innovative product and clear goal (to help solve the traffic issue), there is a lot of potential for these new air taxi companies. Does that make Archer Aviation a once-in-a-decade buying opportunity in 2025?

An eVTOL is an innovative vehicle type that is similar to a helicopter but with some major improvements. First, eVTOLs are much quieter than helicopters, making them easier to tolerate in neighborhoods and cities. Second, they are fully electric, utilizing tilt-propeller technology to make them cleaner and more energy-efficient.

Archer Aviation is building an eVTOL to help people travel quicker in congested urban areas. For example, it highlights the trip from downtown Manhattan to the Newark airport, which can sometimes take over an hour in a car. Once the company’s eVTOL point-to-point air taxi network is built, the company says this trip will take under 10 minutes.

This could be a huge time save not only for the riders, but also for other people on the roads. For every person who takes an eVTOL trip from Manhattan to Newark, that is one less car on the road. It is likely that it will cost a pretty penny for this air taxi trip (and will have to in order for the network to make a profit), but I think there will be plenty of demand for the service. Only the wealthiest people have the ability to skip the typical airport trip with helicopters and private jets.

There are plenty of people with enough wealth who will be willing to pay hundreds of dollars for an air taxi trip if it means a 10-minute flight to the airport, at least in wealthy cities around the globe. This is the passenger segment that Archer Aviation is targeting, with plans to open up networks in places such as Japan, India, the Middle East, and the United States. According to management, its first point-to-point network will start operating by the end of this year.

It isn’t just Archer Aviation that sees electric air taxis as a modern solution to traffic issues. There are eight other eVTOL stocks trading today, and this is only counting the ones that are publicly listed. Luckily for Archer Aviation, it is one of the largest and has a lot of financial backing. It is also close to bringing a service to market (hopefully sometime in 2025).

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Financial backing is huge for an air taxi start-up due to all the capital costs required in building the product, getting regulatory approval, and building all the takeoff sites. Over the last 12 months, Archer Aviation has burned $415 million in free cash flow. At the end of the third quarter, it had $500 million in cash on the balance sheet and has a $400 million commitment from Stellantis to help build its manufacturing facility.

Hopefully, these funds will bridge the gap as Archer Aviation works to get regulatory approval for its taxi network and build all the air taxis it needs. If this gap can be bridged, Archer Aviation has a ton of orders it can fill. The backlog at the end of Q3 2024 sat at around $6 billion, with commitments from airlines and cities around the world. There is clearly a demand for eVTOL solutions. Why? Because if they work, there are tangible benefits to society.

Electric air taxis are a promising product. Personally, I hope these companies succeed, and in a big way. That doesn’t mean you should buy Archer Aviation stock. For one, its shares are up 167% in the last three months and now have a market capitalization of $4 billion. Today, Archer Aviation is generating zero dollars in revenue and burning hundreds of millions in cash each year.

Using some estimates from its committed order book, a typical Archer Aviation air taxi will sell for $5 million. Manufacturers like this have low margins, meaning it will take a lot of orders and operating leverage for the company to reach positive cash flow. Even at 100 unit sales a year, that is just $500 million in revenue and likely minimal profit generation.

With a market cap of $4 billion, this looks like a wildly expensive stock. Avoid adding Archer Aviation shares to your portfolio at these prices, even if you think the underlying eVTOL technology has potential.

Before you buy stock in Archer Aviation, consider this:

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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Is Archer Aviation a Once-in-a-Decade Buying Opportunity in 2025? was originally published by The Motley Fool

Stock splits were a major market theme in 2024, with some of the world’s biggest names joining the list. Companies across sectors, from Walmart to Chipotle Mexican Grill, launched such operations last year. And Nvidia and Broadcom led the wave in the artificial intelligence (AI) industry, each completing a 10-for-1 stock split.

Why do investors love stock splits? Even though they don’t change anything fundamental about a company, they do lower the per-share price, making the stock more accessible to a wider range of investors. And the move also could be seen as a sign of confidence from management, with the idea that the stock has what it takes to rise from its new lower price.

So, it’s logical that investors are always on the lookout for stock splits, especially when a very successful company’s share price has soared to high levels. And one particular AI company right now is looking ripe for a split. The stock climbed 65% last year and today trades for more than $600. My prediction is this well-known company will be the next AI player to announce a split.

Before I give away the name of this company, I’ll offer you one more clue about its identity. This tech giant is the only member of the “Magnificent Seven” –the stocks that drove last year’s market gains — that never has launched a stock split. I’m talking about Meta Platforms (NASDAQ: META), owner of social media platforms Facebook, Messenger, WhatsApp, and Instagram.

Thanks to its social media dominance — more than 3.2 billion people use at least one of its apps daily — Meta has seen its revenue and profit climb into the billions of dollars. And its shares have followed the upward path, today trading near a record high.

Meta generates most of its revenue through advertising as advertisers seek to reach us where they know they’ll find us — using one of the company’s apps. But Meta has aggressively expanded into AI, making it the company’s biggest area of investment last year — and Meta has suggested it will increase AI investments this year too.

CEO Mark Zuckerberg has said he’s interested in developing AIs that all Meta users may rely on for whatever is important to them — from business to leisure activities. To get there, the company developed its own large language model (LLM) and is now training the latest version, Llama 4. In the most recent earnings call, Zuckerberg said Meta’s seeing fast adoption of the recently released Meta AI — the company’s first AI assistant — and Llama is “quickly becoming a standard across the industry.”

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At the time, streaming was still in its infancy, but Netflix dominated the DVD-by-mail space, and I was intrigued by its early, consistent market penetration and accelerating expansion. Since then, Netflix has become the undisputed king of streaming, with 283 million subscribers worldwide. The initial shares I purchased in 2007 have soared 34,540% and Netflix is my second-largest holding at 12% of my portfolio.

Gains of that magnitude only happened because I held the stock relentlessly, which is much more difficult than it sounds. Some shareholders bailed after the “Qwikster” fiasco of 2011, others lost confidence when Netflix lost 1.2 million subscribers in mid-2022, and still others balked at Netflix’s foray into advertising. I held the stock through all those challenges and more.

The company tested investors’ mettle many times over the years, but for those who recognized that the investing thesis hadn’t changed and stayed the course, the rewards have been life-changing.

You’d be excused if you’ve never heard of MercadoLibre (NASDAQ: MELI), as it isn’t a household name in the U.S. However, from humble beginnings as an online auction platform, it has become the leading technology company in Latin America, providing digital retail and payment services to 18 countries in the region. MercadoLibre provides logistics and shipping services, cross-docking and warehousing, online payments, digital wallets, consumer and merchant financing, and more.

Some investors have avoided the stock thanks to the inherent risks in the region, which include political instability, economic upheaval, and hyperinflation, among others. For example, Argentina, MercadoLibre’s home country and one of its largest markets, had an inflation rate that soared 166% year over year in November, and that’s just one of the challenges.

Yet those risks mask a sizable opportunity. While it’s several years behind the U.S. in terms of penetration, its online retail and digital payments adoption rates are among the world’s fastest-growing, with a population that’s nearly twice that of the U.S. MercadoLibre takes a cut of each transaction hosted on its website, which insulates the company from much of the risk. During the first nine months of 2024, MercadoLibre’s revenue grew 38% year over year, driving net income up 55%.

Understanding the level of risk and the magnitude of the opportunity, I made the educated decision to buy this “risky” stock, a decision that has been extremely profitable. A modest initial investment in 2009 has grown by 7,900%. Combine that with several subsequent investments, and MercadoLibre accounts for roughly 8% of my portfolio.

This helps illustrate how education can help minimize risk.

Despite numerous challengers over the past couple of years, Apple (NASDAQ: AAPL) remains the world’s most valuable company and one of history’s most successful. When the stock surpassed a $1 trillion market cap in 2018 — and numerous times since then — some investors believed that the company had reached its apex and there was very little upside from there.

Furthermore, the iPhone is responsible for more than half of Apple’s revenue, but as global smartphone penetration has crept higher, sales have begun to slow. Add to that the uncertain economy, and it’s easy to understand some investors’ misgivings.

Yet recent years have illustrated the resilience of Apple’s services segment, which generated growth in each of the past four years despite the worst economic downturn in decades. The segment brought in revenue of $96 billion in fiscal 2024 (ended Sept. 30), more than 77% of the companies in the Fortune 500. Furthermore, even as iPhone sales slipped, Apple continued to top the global smartphone market, with the world’s three top-selling models and four of the top 10, according to Counterpoint Research.

Selling a stock too soon can be a costly investing mistake, as it certainly would have been with Apple. Since it became a charter member of the $1 trillion club in 2018, the stock has returned 350%, more than three times the 106% return of the S&P 500. Furthermore, since my first purchase in 2008, Apple’s stock price has surged 4,120% to become my fourth-largest position, at roughly 8% of my portfolio.

I’m convinced there’s more to come.

Every once in a while, I find myself looking at a stock that has plunged, thinking, “That can’t be right.” Such was the case with The Trade Desk (NASDAQ: TTD) in early 2020. It had long been among my highest-conviction stocks — one I had been adding to for several years. The company was a digital advertising powerhouse and continued to gain market share, growing faster then the industry.

Imagine my surprise when — during a four-week period between Feb. 19 and March 18, 2020 — the stock lost 54% of its value. This wasn’t due to any operational failure, malfeasance, or financial impropriety on The Trade Desk’s part, but rather marked the start of the global pandemic. However, I had followed the company for years and was quite sure this was an overreaction on the part of investors.

After checking to be sure nothing else had changed, I put my money where my mouth was and doubled my position in The Trade Desk. My logic was simple. The need for advertising wasn’t going anywhere and the company had a demonstrated track record of using sophisticated algorithms to automate the ad-buying process, ensuring the right ads reached their target market. Furthermore, the stock was selling for half what it was just a month earlier, but the investing thesis hadn’t changed.

Since then, the stock has gained 717%, despite enduring the worst economic downturn in decades. Furthermore, since I first purchased The Trade Desk stock in March 2018, the stock has soared 2,349%. As a result, The Trade Desk is my fifth-largest holding heading into 2025, representing 7% of my portfolio.

The lesson here is a simple one. If the thesis hasn’t changed, and a great company is selling at a discount, don’t be afraid to buy on the dip.

If there’s one overriding lesson that pervades this list, it’s the compounding power of long-term buy and hold investing. Each of these stocks has been a staple in my portfolio for years. Nvidia and The Trade Desk are the most recent additions among the top five at nearly seven years, while I’ve owned Netflix shares for more than 17 years. There have been numerous instances when these stocks have lost between 25% and 50% of their value, but I resisted the common practice of jumping into and out of stocks, trying to time the peaks and valleys of the broader market.

Doing nothing is one of the biggest keys to investing success.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $357,084!*

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*Stock Advisor returns as of January 13, 2025

Danny Vena has positions in Apple, MercadoLibre, Netflix, Nvidia, and The Trade Desk. The Motley Fool has positions in and recommends Apple, MercadoLibre, Netflix, Nvidia, and The Trade Desk. The Motley Fool has a disclosure policy.

My 5 Largest Portfolio Holdings Heading Into 2025 — and the Important Investing Lesson I Learned From Each One was originally published by The Motley Fool

The average real estate investment trust (REIT) offers a dividend yield of roughly 3.8% today. That’s well above the S&P 500‘s 1.2%.

But you can still do better. Real estate bellwether Realty Income (NYSE: O) is yielding 6.1%. Here’s what you need to know and why now is a good time to put $2,000, or more, to work in this high-yield REIT.

Realty Income is a net lease real estate investment trust. That means that its tenants are responsible for paying most property-level operating costs. Although virtually all of its properties are single tenant — meaning there’s a high risk if the tenant leaves — over a large enough portfolio, the risk is pretty low. The REIT is the largest player in the net lease space with over 15,400 properties.

Outside of Realty Income’s size, however, there’s not a whole lot that sets it apart when you look at individual metrics. For example, W.P. Carey, the second largest net lease REIT, offers a dividend yield of 6.5%.

Meanwhile, Realty Income’s dividend growth over time has averaged around 4.3% a year, while peer Agree Realty has increased its dividend by roughly 6% over the past decade. As for the dividend streak, Realty Income’s 30 consecutive annual increases fall behind NNN REIT‘s 35 years.

Even Realty Income’s general approach to its portfolio isn’t really unique. It has assets in the retail and industrial sectors with a large “other” category. And it invests both domestically and in Europe. That’s exactly what W.P. Carey does, too.

At the end of the day, you can probably find net lease REITs that are better than Realty Income on any individual metric you like. What sets it apart is its size (with a $45 billion market cap, it is nearly four times larger than its next closest peer) and the fact that it manages to score well across so many different industry metrics, even if it isn’t the top-performing REIT on a particular metric.

Realty Income is, in the end, a foundational investment. It is the kind of reliable company that tends to perform fairly well year in and year out. You won’t brag about it at a cocktail party, but you’ll be happy you have it in your portfolio, sending you attractive dividend checks month in and month out.

You can reinvest those dividends to compound your growth. Or you can use that cash to pay for living expenses, since a monthly dividend is as close to a paycheck replacement as you can get.

There’s just one more thing: Size matters in the net lease sector. Net leases are usually financing transactions for the seller, which is often an operating business like a retailer or a manufacturer.

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