We live in a crazy society that prioritizes having fun over long-term financial stability. The main issue with this short-term mentality is that most people don’t realize that they think this way. On the surface, it seems that everyone is making these “quick hit” decisions.
I guess the actual title of this article should be assets versus liabilities. I’ll define these terms later in the piece. For now, you can run your own experiment. If you post on social media that you bought a new car or received $200 in dividends last month—which post do you think will garner more attention?
That’s right, the post of you buying a liability that will add 2-3 years to your working career. I’d be surprised if anyone commented on your dividend post. No one wants you to remind them that you are trying to be their best self. Let’s jump into a few definitions.
From $28/mo to $700/mo in Passive Income in Two Years
F.O.M.O. FOMO stands for the Fear of Missing Out. It usually refers to making moves in the stock market or crypto exchanges. If there is a “meme stock” or “new coin,” everyone rushes into that product because it is the new hot thing.
However, FOMO is everywhere. Our consumerist society places more value on liabilities (cars, boats, motorcycles) we own than financial security. Every time you use your credit card to buy something you do not have the cash for, that is FOMO.
J.O.M.O. JOMO stands for the Joy of Missing Out. The people who exercise JOMO are on their way to becoming rich or finding peace. Once you realize that capitalism rigged the world against you, you can find peace in avoiding the madness.
I wrote an article about JOMO roughly seven months ago. As I scroll through Facebook, I see that most people still believe in this society of consumerism, and it scares me. Life is so easy when you shed the “mandatory” luxuries of cars, boats, RVs, and motorcycles.
Assets vs. Liabilities. Assets put money into your pocket, and liabilities take money from your pocket. This simple definition comes from “Rich Dad, Poor Dad” by my favorite author Robert Kiyosaki.
Dividends vs. Capital Gains 2
If you can follow his teachings, you will feel more prosperous than you ever have—usually in short order. It doesn’t take much to trade in your assets for liabilities. My wife and I made the conversion in less than two years and collected $150,000 in a dividend portfolio in that timeframe.
The problem is you won’t look richer than you ever have because you won’t buy dumb crap. My wife and I easily make a combined $200,000 a year while living in a very low cost-of-living area. We are rich.
The definition of wealth. Wealth is having excess income versus expenses. Every month, we invest over $6,000 into the markets and earn $900 in passive income from royalties, interest, and dividends.
We probably spend about $500/month on ourselves and little crap to get us through long workdays. I know I bought some video games on Black Friday this year.
The separation. The $500/month we spend on ourselves separates us from the rest of society. Most people want to spend $5,000+ on themselves every month. They save (not invest) 5% to their retirement account, get the employer matching, and spend every dime that enters the home.
On top of that, they buy things they cannot afford—that’s when the credit card comes into play. I’m all about using the occasional “36 months, no money down, no interest” at the local furniture store. It is a great way to keep your cash pile. However, where does the urge to buy new cars every two years, new furniture, home remodels, new jewelry, luxury vacations, etc., enter our brains? FOMO.
How to Create Passive Income 104: For the Average Person
Social media and keeping with the Joneses have led us to spend our hard-earned income on liabilities. Rich people don’t spend money like us—they build assets. These assets then produce income in the form of royalties (from books and media), dividends (from stocks), interest (from cryptocurrencies and bonds), rents (from rental properties), and residual business income (from automated businesses).
How can you prevent FOMO? Okay, enough doom and gloom. The good part is you are reading this article, so you are 90% of the way there. You need only take action. First, I am going to recommend a suite of Robert Kiyosaki books. You may not comprehend the power of his words at first, but you will in time. But it’s good to have his words echoing in your brain early.
- “Rich Dad, Poor Dad”
- “Rich Dad’s Guide to Investing”
- “Rich Dad’s Cashflow Quadrant”
- “Rich Dad’s Who Took My Money”
- “Unfair Advantage”
The power of reading. Becoming an avid reader is the most effective step you can take in your life. No, not reading mysteries and romances, but finance and self-help books. If you can make it through these books, your life will instantly change.
My 24 Favorite Blue-Chip Stocks
From there, I recommend reading my very own “Don’t Gamble with Retirement 5.” I give some practical steps to take on your passive income mission. Trust me, my wife and I live the passive income lifestyle now, and we have never been happier.
Conclusion. It is a life-altering cash flow when you bring close to $3,000/month in passive income ($2,100 from rents, $900 from dividends and royalties). However, having no desire to spend this money is the real power.
Converting from a FOMO lifestyle of debt and liabilities to a JOMO lifestyle of assets and passive income will empower your daily motivation. However, you will also lose most of your friends. Most people don’t want to change their mindset, and even worse, don’t want to see others succeed.
If you are tired of being in debt, living paycheck-to-paycheck, and stressing about money, then read the above books. Then, join my Facebook group, where I post about passive income and slowly becoming wealthy every day.
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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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