I can’t believe that it’s been six months since the last article in the Retirement Planning for the Average Person Series (part 1, part 2). I really need to try to get these out every couple of months because they are one of my favorite series on the PDF side.
On the Kindle Unlimited side, one of my favorite series is the Happy Cash Flow Retirement series (part 1, part 2, part 6). So check those articles out books out as well.
What will make you happy? I just finished an article titled “Happiness Isn’t Free 2,” where I explore happiness and money. I know exactly what will make me content, fulfilled, and satisfied as an average person.
Let Dividends Be Your Lighthouse Through Retirement
After I retire from the Marine Corps, I want to sit on my porch with my wife and drink coffee every morning. We both won’t need to work, and our days will be our own.
Every penny of my military retirement would flow into my income portfolio. We would live entirely on passive income from sources outside of my retirement.
I would wake up every morning thankful that I don’t have to work, life has slowed down, we can finally be together every day, and we have the financial means to support our children.
Reverse engineer your future. Now, to get to this point in retirement, I will need to reverse engineer precisely how I can accomplish all of these goals. Let’s examine the various milestones in my dream.
- Stay married and in love.
- Retirement from the Marine Corps in 3-7 years.
- Ensure children have financial education.
- Create multiple streams of passive income.
I want to focus on creating multiple passive income streams for today’s article. I have written a lot about passive income over the last 1.5 years. However, the most crucial element is getting started today.
The Passive Income Grind
As average people, we need to build our own income streams because no one is coming to save us. Even if our parents leave us money, we still need to convert that money into an income stream.
What income streams are suitable for you? You need to evaluate various elements of your past, present, and future to determine which income streams are good for you now and during retirement. Now, I’m going to ask you some tough questions.
- Past. What are you good at doing? What are your hobbies and interests? What skills have you learned at your job or hobby? What type of personality do you have?
- Present. How much time do you have to start an income stream? What is your family size? What are the financial goals for you and your family?
- Future. What is your retirement dream? Do you plan to travel or assist your children? Do you want to leave a legacy for your grandchildren?
If you haven’t thought about these questions recently (or ever), now is the time to do so. As average people, we don’t have any time to waste.
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The power of compounding. The power of compounding ensures things grow at an exponential rate. We may not always see things building, but they are in the background.
However, compounding takes time. Time is fleeting, so we need to take advantage of it today. Let’s look at income streams we should start today to have an excellent retirement tomorrow.
Dividend investing. One of the best ways to ensure a great retirement is dividend investing. There are multiple ways to invest in dividends, so I direct you to an article I wrote about my three methods.
It’s vital to create a goal for your dividend portfolio. I want to achieve $40,000/year in dividend income before retiring from the Marine Corps. Currently, I am on pace for about $8,000 for this year. But again, compounding moves exponentially, not in a straight line.
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Real Estate. You need to involve yourself in some form of rental income. Notice I didn’t say real estate. Simply owning a home is not enough for you to beat inflation, especially as inflation is rising our taxes, insurance, and utilities.
If you own a home, there are multiple ways to earn rental income on your property. You can rent rooms, storage sheds, parking spaces, billboards, basements, attics, or in-law-suites. You can also create spaces for a mobile home or RV park.
You can also reduce your expenses on your home by creating a homesteading environment. Homesteaders believe in sustainable living. You don’t have to become a full-on farmer, but you can grow some small crops or invest in chickens.
Anything you do today to learn about living on the land will pay off in spades in the future. Do you want to depend on the grocery stores for 100% of your food supply? I know I don’t.
Royalties. Building a stream of income from royalties is challenging but necessary. Royalties are fantastic because you do the work once and reap the benefit multiple times.
What is Your Rich Life 2?
Royalties fluctuate depending on recessions, seasons, and consumer interests. However, learning to create content is perhaps the most critical part of life, outside of relationships.
Everything in life requires an audience. You can either purchase someone else’s audience via advertising or build your own. If you build an audience, you are taking your future into your own hands.
If you genuinely want to stop being average and take 100% accountability for your life, building an audience and creating content is essential.
Business. Finally, starting an automated business that can follow you into retirement is vital to your financial longevity. The business doesn’t have to be overly time-consuming, as it may only take a few hours a week.
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Some ideas are harvesting insects, selling eggs or veggies, hosting karaoke tournaments, or operating a food truck. They may not start as passive, but you can build a nice stream of residual business income by out-sourcing, automating, or hiring a manager.
Your retirement, your way. Now, you simply have to figure out your ideal numbers. What are your overall income goals during retirement? Let’s say it’s $10,000/month.
We can simply do the math by determining what income streams produce revenue. (pension $3,000, dividends $3,000, royalties $1,000, food truck $3,000).
We ensure that our income increases every year to beat inflation—ensuring we are comfortable. Easy peasy. Of course, it won’t be that simple, as every income stream takes years to come to fruition. But that is why we are starting today.
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Conclusion. The main takeaway for the average person is to map out your life for today and tomorrow. Everything we do today affects tomorrow. In the book “I Will Teach You to be Rich,” Ramit Sethi says it best, “No one is coming to save you.”
If you want to have a fantastic retirement—where you have the resources to travel, help your children, and facilitate financial security—you must become above average.
The average person waits for the world to tell them how to change. They let inflation, careers, relationships, and politics dictate their lifestyle.
I am 100% responsible for my future. Yes, I still have a job, but that is ending pretty soon here. I’ll be retired by 48—no matter what (I’m 41 currently). My wife and I will retire into the sunset, ensuring we have the resources to vacation, travel, and support our childrens’ goals.
We have become above average. This is especially great because we started in below-average situations. How do you want to retire? Like the average person living on social security and $10,000/year of 401k income?
Or do you want to have $20,000/month of passive income flowing through your household? The answer truly lies in how serious you take your retirement.
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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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