I want to be very clear; we aim for the most significant number we can dream of. Most people do the exact opposite of this. They retire and see how much money they have coming in; they tailor their lifestyle to fit inside this amount’s confines.
Your lifestyle, when living within a small retirement, is not only meager but also fearful. Because you never learned how to build wealth, you will live in fear of running out of money. This habit is called a scarcity mindset. You feel that there is not enough money in the world, and you will never have enough of it to be comfortable.
Today, we will break this mindset and dream about our rich life. After we envision our dream life, we can build our cash flow plan to fund our fantastic lifestyle.
Just because we dream of our best life doesn’t mean that we have to live like idiots. We can still keep our expenses low, reduce taxes, and create multiple streams of income. The goal is to focus on experiences and people, not necessarily on things.
Why Budgeting is Important to With Creation
The first three articles of this series cover 101) how much our rich life costs, 102) how to build cash flow to fund our rich life, 103) how to use businesses to maximize our rich life’s effectiveness. With that, let’s continue building our rich life and asking for everything we want in life.
Expenses. We start with these costs because this is the first financial yardstick we need to cover with passive income. First, starting today, we need to cut our expenses to the minimums. You should know today how much you will need to cover your necessary costs plus some surprise expenses. Essential expenses include housing, utilities, car (operations), cellphone, tv, media, and incidentals.
The necessary expense to focus on is housing. If you can reduce this amount to zero, then everything else falls into place. Keeping your costs low is the easiest way to feel wealthy.
Notice that I did not list credit card debt, student loan debt, personal loans, car loans, etc. Debt is something that we need to remove immediately. There is no room in our cash flow retirement for bad debt. Go ahead and write your total expenses down. I will personally go for $3,000/month for my number. Yours may be higher or lower.
How We Built 13 Streams of Income
Experiences. Now that we have our base living expenses covered let’s live a little. Time to go and build experiences that our families and we will remember. Experiences include everything from travel, concerts, graduations, national parks, etc. You can also stay at fancy hotels, rent RVs, go camping, rent motorcycles, cruises (maybe in 10 years), sporting events, and visiting museums.
We mustn’t hold back our expectations. The time for us to dream big is now. If we don’t aim big, we will settle for whatever social security pays us. We do not want to put ourselves in a position to “survive” from social security, small pensions, and maybe a little 401K.
We are not only creating our cash flow retirement for ourselves but our family. Our kids might be just getting starting in life and will need our assistance to travel at a young age. Plus, the example that we set is what will live on in our children.
If all we can do is survive, then they will be survivors. If we can thrive, then they will be thrivers. Parents positioned to thrive and facilitate experiences can be involved in their kids’ lives. Survivors are too concerned with their problems to pay any attention to their children. What example do you want to set? I will put the amount of my personal experience to $3,000/ month.
How to Create “Luck” with Money
Generations. Generational assistance is the factor that most first-world countries do not account for in their plans. I read an article that told parents that their #1 focus should be on their retirement plans. Maybe that is solid advice for some parents, but not for my wife and me.
Generational assistance is being there for whatever your children will need. However, this does not mean supporting kids that do not want to work or perform. This assistance is for kids doing well and doing things as “right” as possible.
The world is simply not built for the average person to get ahead. The harder you work at a job, the smaller your chance of climbing the ladder. By using generational assistance, we can undercut and expedite the system. Let’s take a look at some ways generational assistance, using education and funding, can help our kids leapfrog ahead of their peers.
Buying a car. When our kids buy a vehicle, we can either co-sign or make an even better plan. Even if our kids start with an 18% loan- we can pay it off in a few months. Then they can repay us at a rate of 3%.
Going to college. Our kids can live at home with us for cheap or stay in one of our rental houses and charge their friend’s rent.
Start Investing or Pay off Debt
Having a wedding. Since we own land or know people who do, we can leverage this to have a reasonably priced wedding.
Buying a house. We have learned so much about real estate; we can work with our children to get a home that meets all our criteria to achieve Mortgage Zero.
Starting a business. Being employed as a W-2 employee usually does not lead where we think it ought to. To truly get ahead, our kids will need to start a business. We have learned so much about business, and now we are in a palace to offer our kids start-up funding. They will still need to present a business proposal and plan.
Taxes 102: The Business Mindset
As you can see, generational assistance is the most critical and expensive cost that we will have in retirement. Even some of you reading today are shaking your heads. Assisting one’s kids is not built into every one. It is something I believe deeply in after 14 years of parenthood. I also think that it keeps the parents involved in their children’s lives. The kids can talk business, real estate, and investments- as well as grandkids, travel, work, and friends. You can have it all. I will put my budget for generational assistance at $5,000/month.
My total is $11,000/month of passive cash flow income. $11,000/month is a lot of money. The funny part is that my Retirement 4-50 plan calls for me to earn $24,000/month. To achieve this sum of money will take a large amount of financial education. I am not trying to save my way to this amount. I will need to proactively seek out investments that will passively earn income while I sleep.
What was the total income needed for dream retirement? Do you agree with generational assistance, or are your kids going to be on their own?
In Cash Flow Retirement 102, we will cover building our income streams to fund our passive income requirements. Remember, we will not settle. If we agree to a small income, we lose. If our goal is $50,000 a month, we can achieve it. Financial education is the key to reaching all of our dreams. If we can envision a world where we make $50,000 a month, we can get there via smart work and education.
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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