I am not one to praise the virtues of having a job. In fact, I just finished an article about how the 8-Hour mindset destroys your ability to build wealth. However, we need jobs. Welcome back to the Cash Flow 101 series (101, 102, 103, 104, 105).
I know, if you have read any of my 600+ articles, you will think I went crazy last night. But, hear me out on this one. Jobs allow us to plan our future and build our income streams. As long as we have a purpose for our job, it is okay to hold one down. I want to explore how to find the meaning of employment.
Pay expenses. The first and most important purpose of having a job is to pay expenses. However, this is the scenario that gets us into the most trouble as well. Go back and read my prior sentence; it says “expenses.”
Can You Achieve Work-Life Balance?
Not luxuries, not vacations, not fancy cars. When we overspend our earned income, we add years to our working lives. Luckily there are a few things we can do to prevent ourselves from falling into this spending trap.
Budgeting. Budgeting guides us and allows us to make good decisions with our money. Even if we over-budget and become hermits, it’s better than the alternative.
Avoid toxic consumerism. They built America on the ability to spend all of our income. Even those who make tons of money (HENRYs) can still live paycheck-to-paycheck. The best way to avoid toxic consumerism is to read a book on advertising.
Once you understand that everyone has their hand out for you to purchase something, you can control your spending habits. Only buy something if someone provides value to you.
Minimalism. Minimalism is a great way to reduce waste around the house and in the wallet. If we can stop spending, collecting, and holding all these items and “stuff,” we will be much better off—mentally, physically, and financially.
Fund our investments. Now that we have control of our finances, it is time to fund our assets. There is a lot to learn about investing, and we will have time if we stop watching Netflix, sports, news, and politics. Sorry, getting rich takes time and energy.
Can You Achieve Work-Life Balance 2
Investing basics. First, we need to fall into investing by learning the basics. I use three types of investing to produce income, invest for the future, and grow my wealth. The three paths are income investing, dividend growth investing, and index fund investing.
Funding our portfolio. How much should you invest each month? At least 50% of your take-home salary. Yep, that is a minimum amount. My wife and I can invest over 90% of our take-home pay. That is what allowed us to go from -$77,000 in debt to +$150,000 in savings in two years.
Increase income. If you are struggling to save and invest over 50% of your salary, you need to expand your income. House hacking is my number one most recommended way to increase cash flow.
Create an income stream. While we are working, creating an income stream should be our top priority. What is an income stream?
Happy Financial Independence Day
An income stream is something where we can 100% control the time and revenue of the endeavor. Be careful. I am not saying we need to create a job or job-like business. No, an income stream. Let’s dive deeper into the meaning of an income stream.
First, I want to ensure everyone understands that an entrepreneur and a business owner are two different people. We want to become entrepreneurs. Developing a brain for entrepreneurship will take time. Here are some books I recommend to get you started on the path.
For our income stream, we want to pick something we love doing so that we can do it for as long as we live. We don’t need to make a ton of money from our income stream because we have dividends and rents to help us financially. I want to give you a few examples of an income stream versus a job-like business.
Proof-reading. If you are good at proofreading other people’s writing, there are many paths you can take. The easy way is to go to Fiverr.com and post your resume online. You can then go through the process of gaining notoriety on Fiverr and building your reputation.
Retirement Planning for the Average Person
The more challenging way is to open your own website and gain traction this way. You can write articles about how to quickly proofread peoples’ work. Also, you can ask for free submissions to use as examples.
It will take years to build your platform, and it will be difficult. But, that’s why you have a job! Eventually, you will be able to create YouTube videos and online courses on proofreading. You will become the subject matter expert. You can leverage your brand for affiliate marketing, sponsorships, and speaking engagements.
Do you see the difference between going the Fiverr route and opening your own website? To do things the hard way, you need to support yourself financially. Thank goodness you have a job. Also, your dividends and rental income will be growing, while you build your platform. Let’s do another example.
Driving. You become wise to the ways to financial freedom and decide to drive Uber on your off-time. It’s better than watching Netflix, but we can do better.
I would much rather become the destination hub of a resort town. Using everything I learned about Airbnbs, bed and breakfasts, and starting a renting car business, I can combine them all into a one-stop shop.
My idea is to buy a huge house, maybe six bedrooms and six bathrooms. One group would reserve the entire home for about a week or two. On top of saving a ton of money by booking a home that can hold 20-25 people, there will be more bonuses.
I would have my son on standby as a van driver, so they can travel to the beach, drink, and enjoy their time. Also, I would have Teslas, motorcycles, and other electric vehicles on deck for them to drive at their leisure.
Finally, I would have a gift shop, washing machines, vending machines, a pool, and more ready for their use. As you can see, this would be a complex operation, but it wouldn’t be as time-intensive as it seems.
The plan. To execute this plan, I would need to keep my job until I hit a certain milestone. First, I want to be financially free (not financially secure) before I ultimately leave my employment. In this case, we’ll say I need $10,000/month passive income before I retire.
Over-Budgeting: You Can Only Cut So Much Before…
I would work hard, save, invest, and rent rooms until I reached my goal. In the meantime, while I am working, I can buy the home. I can rent rooms in that big home until I am ready to start my income stream.
I will try to learn as many lessons and position myself for success while I am working. I may have to work extra years to ensure everything is in place. Then, finally, I can retire and finish building my income stream.
Conclusion. It sounds crazy, but your job is to pay expenses, build an investment portfolio, and give you time to create an income stream from scratch. Currently, I am building my book publishing income stream while I finish up my career in the military.
DO NOT fall into the trap of living to work. America trains us to spend every single dime we make on “stuff.” Go against the grain and stack wealth, and build an empire. The book “Before You Quit Your Job” is an excellent reference to preparing yourself while working.
Life is too short to work all day. Retirement doesn’t have to be boring either. We can have a fulfilling retirement by creating an income stream custom-tailored to our dreams and desires. Yes, we can have it all.
Find more of my articles and books by subscribing to my Twitter account. I write 1000+ words every day because I love what I do, and hopefully, I can help you achieve your financial goals!
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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. All Right Reserved Military Family Investing
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