This topic is going to be a tough sell to most people, especially young people. Somewhere along the lines, we started convincing young people that they shouldn’t even attempt to get their act together until age 25. By my calculations, that leaves seven years of wasted time between ages 18-25.
I chose this topic specifically because my wife and I barely reached financial independence by the time I reached age 40. I will continue to remain in the workforce until I am 45-48, but that is purely by choice. Our goal is to have $1 million in our dividend portfolio before we completely punch out from the workforce.
But, my only saving grace is that I was in the US Marine Corps during my entire 20s and 30s. A large part of our financial freedom is because we will have a sweet military retirement check coming in and completely cover our lifestyle. This pension makes us financially independent.
Strong Finances, Strong Marriage: 10 Steps to Healthy, Wealthy Marriage
Besides the fact that I was in the military, I did not get serious about financial education and financial freedom until age 38. At that point, I started to pay down debt, lower expenses, create multiple streams of income, and invest in assets. Those are the four steps that will make you rich. Please read “From -$77,000 to +$150,000 in 22 months.”
I want to get my message directly to the young 20 and 30 years old who are reading “DO NOT WASTE YOUR YEARS!” The world will tell you that you can drink, party, stay up late, do drugs, sleep with the opposite sex, disregard authority, and focus on politics. But don’t!
I’ll tell you a little secret; all these things keep you from becoming wealthy. Most of these things have a place in your life, but only in extreme moderation. Don’t do drugs or disregard authority. I would even go as far as to say avoid politics until you are financially independent.
I know that I sound like an overprotective parent, but these are the ideas that I am teaching my children—my two boys (age 14 and 10). It is vital that you keep your head down, become financially educated, find a suitable mate, and become wealthy while in your 20s and 30s.
As clearly as I can write in words, I am telling you there is no better feeling than being rich, in love, having kids, successful career, and again BEING RICH. I am living the dream life, but it wasn’t always that way.
How We Plan to Retire on Dividends
Debt is the silent killer of wealth, and it can literally suffocate you during relationships. When you have debt in a marriage or relationship, it taints every experience. It makes you feel guilty when you enjoy simple things. It causes arguments when there shouldn’t. It is just a suitcase full of stress, left in the middle of your living room, every day and night. You see it, it pisses you off, but you can’t move it.
Let me describe two real-life scenarios to you. The first example was about 3-4 years ago; I was roughly 36 (an E-8 in the military and making good money) and my wife 33. We had debt for various reasons, mainly because we bought a too-expensive house in 2008. It slowed our growth and made us take on debt.
We were getting by pretty okay, I guess. But looking back, it was a crap show. On top of our everyday expenses, we had two car payments, personal loans, a credit card payment each, etc. We were paying $100/month for my oldest to have braces.
Good Debt vs. Bad Debt
His grade in math wasn’t so hot, so we had to take him to a tutor. The tutor was across far away, so all four of us had to drive across town after school and work. The first month was $330 and each additional month was $150/month. Needless to say, I was pissed. I hate driving, and I hate math. I hate losing money. It was an altogether crappy situation and maybe the start of us getting our “stuff” together.
Looking back, it may seem that we were mad at my son, but I was madder at being in this predicament. If I had the money, I could have hired a tutor to come to the house. If I had the financial education that I have now, I would understand the importance of the school system. That means that I would have accepted his grades as is. I can give my son more education in finances than anyone else can. I am ultimately responsible for his ability to survive and thrive in the real world.
Now, let’s look at scenario number two, where my wife and I have “stupid money.” Fast forward until today (April 2021), and we are completely debt-free. Every penny that enters our home is ours to control freely.
We can live very comfortably for $3,000/month but probably spend roughly $5,000/month on expenses and creature comforts. However, we make $17,000/month. The rest goes into investments.
Mailbox Money: The Power of Dividends, Royalties, and Rents
However, our investments pay us back in the form of rents, royalties, and dividends. Our dividend portfolio has $150,000 and pays us $500/month, our real estate pays us over $2,000/month, and royalties pay us $20/month but growing slowly. On top of that, our jobs pay us $180,000 combined, and I also teach online for $35/hour.
To say life is good would be an understatement. Money is just a physical manifestation of our financial education. Every day we are becoming more imaginative in retirement planning, investing, real estate, and business. We are free and continue to fine-tune our passive income portfolio. Best of all, we are still young. I still have at least 30-40 more years to love my wife and build more passive income streams.
Now, let’s get back to you, younger people. I have lived the stressful middle-class life. I have had a large, expensive home (I still own it since 2008), two car payments, credit cards, and personal loans. We have struggled due to military moves and my wife changing jobs.
Big Money in Tiny Homes
I am telling you, from someone from the other side of that lifestyle, avoid it with “extreme prejudice.” That term means not just to avoid it, run away from it if it even attempts to seduce you. As I said earlier, keep your head down, find a mate, and become rich. I want to give you some actionable steps that you can take quickly. I hate when a blog post gives you a lot of education but no physical actions to take. So here they are.
1) Read the books “Rich Dad, Poor Dad” and “I Will Teach You to Be Rich.” One is the best educational book on personal finance, and the other is the best training book on personal finance.
2) Answer these three questions “How many assets do you have?” “How many liabilities do you have?” and “When is your debt payoff date?” If you read these books, you will have all these answers.
3) Now, the part that gets everyone caught up, how to move forward. Right now, you need more education. Once you become financially savvy, you will start to see a path to wealth. It is hard to explain, but to absorb the information you need, you will have to make your brain bigger. It’s like trying to pour a gallon of water into a “1 cup measuring spoon”.
4) Shameless plug. I just released a book that will get you started in the right direction. It is called “Now Freakin’ Way I Am Working for Another 25 Years.” I pitch my book because to become wealthy, you need education in financial mindset, retirement planning, investing, real estate, and business. It is hard to find all these ideas wrapped in one book. I have read over 43 books in the last nine months and crammed as much education into my book as I could. I also have all my takeaways from these books written as well.
Millennials, Homeownership, and Kids
5) Continue to read more books on these topics. You will find what your passion is in each category. Let’s look at three completely different examples:
Retirement Planning: Roth IRA focusing on index funds
Investing: Dividend portfolio focusing on Blue-Chip stocks
Real Estate: Focus on renting rooms and mother-in-law suite
Business: Starting a blog on blue-chip stocks
——————–
Retirement Planning: Self-Directed IRA focus on Real Estate
Investing: Dividend portfolio focus on cryptocurrency (yes, they pay interest)
Real Estate: Focus on single-family homes
Business: Selling custom t-shirts and opening a dog park
——————–
Retirement Planning: Employer matched 401k
Investing: Capital gains focus on high-growth stocks
Real Estate: Focus on buying properties overseas
Business: Start farm focus on courses, herb gardens, and petting zoo
Happy Cash Flow Retirement
6) As you can see, there are an unlimited amount of options to customize your passive income. The best part about diversifying is that you don’t have to be great at any particular venture. I don’t have to be the best stock market investor because renting rooms give me the highest return possible (an infinite return). Nothing I do in the stock market can even come close to renting rooms, so there is no need to try. I don’t have to be the best author because I am already rich. I do this to diversify my income. If I can get to the point where I make $1,000/month passively from books, I am golden.
7) So read books in financial mindset (Unfair Advantage), Retirement Planning (The Passive Income Myth), Investing (The Intelligent Investor), Real Estate (Zero Down), and Business (Company of One).
8) Take your time and write down each category and how you intend to start.
Retirement Planning: Max out my employer matching contributions, or open Roth IRA
Investing: Open a Cash App investing account and invest $10 into VTI
Real Estate: Research homes near me that conform to USDA zero down loan for farmlands
Business: Start writing my blog in Google Docs. Once I have money, start a blogging site.
9) Stick to your plans and keep reading. You will become so freaking smart; you won’t even recognize yourself. Become your best self at all times.
Young Brilliant Entrepreneurs
10) As you keep your head down, you will find your mate. You’ll be surprised that you will find others like yourself once you are hyper-focused on achieving results. Do me a favor and pick a great mate with extraordinary core values. The core values are the most crucial part of a person. When Kristina and I married, our core values are all we had. Now we have the same values, but we are rich. Nothing has changed; we can just provide for our family better and enjoy ourselves more.
Hopefully, I have given you enough actionable items to start on your journey early. I do not know how a younger version of me would have reacted to this article. I would love to think that he would have taken action, but probably not. He focused on trying to achieve success by climbing the ladder.
Don’t be like the younger me, trying to climb the ladder. You can create the ladder by building passive income. The rungs of your ladder are financial mindset, retirement planning, investing, real estate, and business. The top of the ladder is you and your partner, sitting on top, in love, and rich!
I totally forgot. You don’t need to buy my book. All the information is for free, here on this article. “No Freakin’ Way I Am Working Another 25 Years.” You will need to follow the links to the various pieces to get the full scope of the article. Good Luck!
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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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