Well, I find myself on another cross-country road trip across America. This time from Pensacola, Florida, to San Diego, California.
I am taking a seven-day slow drive to ensure I do my best to arrive safely. This is the fifth time I am making this trip, and I believe I am older and wiser each time.
Passive Income is the difference. The last time I made this trip was with my family in 2017. We were returning from our duty station in mainland Japan. We bought our second home and drove from San Diego to Pensacola.
Grace & Passive Income
In 2017, we were in debt. My wife would not have a job when arriving in Pensacola. The home would need a new washer, dryer, and refrigerator. Things were tight, and we were happy but a little anxious.
Unfortunately, that’s one of the side effects of having debt—it’s an emotional burden. Debt controls every aspect of your life, including your relationships.
Getting out of debt. In 2019, we decided enough was enough. We went on our passive income journey (here is one of my earliest articles), and in less than two years, we finished paying all of our debt.
Did it take a complete overhaul of our financial mindset? Yes. Carrying debt is a mindset—one that prevents you from accumulating wealth. I’ll explain.
I Live Paycheck to Paycheck 4
The power of compounding. They say that compounding is the 8th wonder of the world. When interest compounds, it grows upon itself exponentially. Our human brains cannot even fathom how this happens.
Our minds think in simple interest. We believe one plus one equals two. When you start a blog, you can’t imagine how you can accumulate significant numbers of readers. It’s magical.
Debt is the power of compounding, working against you. That’s right; all that magical growth is now happening to your credit card balance. That’s why it is difficult to catch up with your debt payments.
Changing your mindset. Returning from Japan, I see why Americans are so indebted. Today I drove from Pensacola to Lake Charles, Louisiana.
Start a Consulting Business Towards Passive Income
Almost 75% of the cars I saw on the road today were newer, nicer vehicles. All I saw were colossal car payments driving around at fast speeds.
Why do we need these very nice vehicles? Roughly 56% of Americans cannot cover $1,000 in emergency expenses (CNBC article). And not just cars—houses, clothes, vacations, etc., all play a role in our misfortune.
Owning newer stuff convinces most people to spend tons of money. This is why we have become detached from one another in the last 50 years.
USDC vs. Treasuries vs. Savings Bonds
It will take a change of mindset to divert your attention from owning more things to building better relationships. This is actually the first step on your financial journey.
Where to start. I would recommend overcoming your love of things. An excellent book is “The Life-Changing Magic of Tidying Up,” which covers the Japanese art of removing stuff from your home (and mindset).
If we can remove our love of possessions, we have a better chance of focusing on building strong, healthy relationships. On the relationship front, “How to Not Die Alone” is a great way to learn about ourselves.
Real Estate Investing in Your 40s
Too often, we focus on others in relationships when we are at least 50% of the problem. Relationships are the most challenging part of being alive but also the most rewarding.
What does this have to do with finances? I took the long route to tell you life is about relationships. By becoming financially independent, you will have time and resources to pursue all the relationships you can handle.
Money is simply an exchange of value. There is no magical formula to becoming rich except for creating things of importance: working, businesses, creative projects, etc.
To free our time for family and friends, we must create value. We can do this at our job. The book “From Paycheck to Purpose” explains how to become a valuable team member.
Why I Became an Income Investor
We can start a business, own real estate, invest in valuable companies, and create content. These things all produce the same result—passive income.
Passive income is the ultimate form of sacrifice and love. I am here in a hotel in Lake Charles writing this article to produce passive income. I am sacrificing my free time, so I can later spend guilt-free time with my family.
When we decide to live below our means, pay off debt, work hard at our job, and create multiple streams of passive income, we are putting our family first.
In the beginning, it won’t look like this. You’ll be working late, staying up in the middle of the night, and losing time with friends and family.
The Magic of Living Below Your Means
Time is the early cost of becoming a Passive Income Hero. Creating passive income takes an extraordinary amount of time and energy upfront. It must be tough, or everyone would do it.
However, in the long run, the Passive Income Hero will have more free time and financial resources than the worker bee.
Let’s say it takes me five years of challenging work to build a $1,000/month stream of book royalties. However, over the next 50 years, these payments grow to $20,000/month of passive income.
Now, I am spending time with my grandkids while my books do all the heavy lifting in my life. You can arrive at the same outcome with real estate, businesses, and dividends.
The Beauty of Rental Income
Conclusion. The hardest part of creating passive income is getting started. Over the next six days, I will review each of my pillars of passive income: financial mindset, retirement planning, dividends, cryptocurrencies, real estate, royalties, and automated business.
How bad do you want to get out of debt? Where do you envision yourself if you had all the time in the world? What would you do if you had an unlimited amount of money?
These are big questions, but they start by cutting coupons to save $10. You then can invest that $10 for a 5% dividend return. Passive income starts small but grows at a rate we cannot even fathom. Find more of my Financial Mindset articles in my Become CEO of Yourself Series.
- Become CEO of Yourself 1 (Amazon)
- Become CEO of Yourself 2 (Free PDF)
- Become CEO of Yourself 3 (Amazon)
You have to decide if you want compounding working for you or against you. 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. All Right Reserved Military Family Investing
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