We all should dream of someday being financially free from the confines of the workplace. We may dream of a beach, island, or lake—no matter, it’s definitely not an office cubicle. But how do we get there?
Is saving our money in a 401k going to get us to a lifetime of financial freedom? How about a savings account and social security—will they work out for us? The answer to these questions is MAYBE.
However, we want to build a definitive answer. We want to ensure our futures are brighter than the morning sun. And the only way I know how is through building streams of passive income.
I Live Paycheck to Paycheck 2
Passive income is your money working for you when you are not working. The best part of passive income is that we can build as much as we need. Through the process of learning, we can decide how much passive income we need to create. And then we begin.
If we need more income from our dividend portfolio, we can add high-yield products like closed-end funds to the mix. If we want more growth stocks for our children, we can add in young blue-chip companies.
If we need more income from rent, we can purchase more property. We can use creative financing to acquire more projects or storage units. Or we can add tiny homes or mobile homes to our existing properties.
If we need more business income, either royalties or automation, we can create more streams by maximizing advertising or marketing. We can also use our land to start a small business to increase our bottom line.
What is the main difference between passive income and 401Ks? Options. Passive Income will give you a massive variety of options and customizability to ensure you not only reach your goals but also can aim for even more.
Why settle for a fixed income when you can have as much income as you want or need? There is only one caveat, though? You will need to learn, and you will need to act.
How Much Do You Need for Retirement?
These are the two hardest verbs for most people to do—to learn and to act. We are told once we have our college degrees, the money will flow to us. We will be the hotshot that all businesses want. You will be guaranteed to be a high-earner.
But this is not the truth. Yes, you will most likely make more money than a high school graduate, but you will need to sacrifice something to make huge money. Most high-earners (let’s say over $200,000/year) have some sort of sacrifice they have to deal with.
Mainly it involves time. However, it can also affect stress at work or lifestyle stress. Making a high income is impressive, but how long can you deal with this type of stress. Would you want to do it for 40+ years?
Happiness isn’t Free
How do we transition from a high-income (or low-income) job to white sand beaches? Passive income is the answer because your money will be working for you.
While on the beach, your dividends will be compounding and paying you a return on your investments. You can get paid in cold-hard cash or decide to reinest. Or you can take what you need and reinvest the difference. You have options.
While on the beach, your rental income will be getting paid and increasing in value. Also, your home prices will be increasing as well. Even though we will not sell our homes, we can tap into our home equity to buy even more houses or make other investments.
While on the beach, your royalties will continue to find people who love your work. Since you took the time to ship creative work, all you have to do is enjoy the passive cash flow. When you are ready, you can create more work for an even more significant return.
The only decision you will need to make is if you are ready to embrace passive income. We are not taught to think in this manner. We are taught to work for money. That is how we earn our actual income by exchanging time for money.
Start a Family Business
To break this cycle, we will need to learn about the stock market, real estate, and business. Nothing is complicated about learning, but we will need to make a leap of faith at some point. We will have to put all that we learned into action.
Whether that is by doing a cash-out refinance and investing the payout or by renting out your master suite, we will have to act. Analysis Paralysis usually sets in around this time. Don’t let yourself talk you out of doing something great.
Nothing is quite like going through the month and receiving 300+ tiny paychecks. This is how the rich get rich and stay wealthy. You have to decide who you want to be. Passive income is the art of challenging yourself and winning. Only you can prevent yourself from creating multiple income streams.
Good Luck on your journey, and when you are ready, go ahead and find a way to get started. I have plenty of books to help you build the correct mindset to envision a world of money. Read first, act second, and you can have everything you want.
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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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