I woke up today in San Antonio, Texas. I decided to split Texas into three days and two nights of driving. If you didn’t know, Texas is a massive piece of Earth.
My friend called me and said I should have driven the 900 miles of Texas in one day. To that, I replied that I had articles to publish. I am committed to staying on my Passive Income Grind.
It’s the same with retirement planning—you’ll have to commit to the process and stay the course. Welcome back to the Passive Income Road Trip Series (Financial Mindset).
Happy Financial Independence Day 2!
Build your own retirement. Your retirement is yours and yours alone. Nobody is coming to save you. Luckily, everything you accomplish for tomorrow will help you today.
My retirement planning series of articles focuses on things you need to achieve outside of passive income streams.
I cover topics such as reducing expenses, becoming debt-free, staying debt-free, 401Ks and pensions, and emergency funds.
These topics fit neatly into what I wrote over a year and a half ago in “4 Steps to Become Rich.” So I will outline this article with these easy-to-understand topics:
- Pay down debt
- Lower expenses
- Create multiple streams of income
- Invest in assets
Paying down debt. Debt is not our friend. In fact, it destroys our lives from the inside out. Once we understand the true nature of debt, we will have to do everything in our power to defeat it.
Retirement Planning for the Average Person 4
Paying down debt is the first step to successful retirement planning. During retirement, you will want more income than expenses; debt is a massive expense.
A great place to start will be my Staying Debt-Free at Any Age series (20s, 30s, 40s, 50s, 60s, 70s). Here, we can see common pitfalls in a particular age group. If you can understand these concepts in your 20s, your life will be much easier.
Speaking of age groups, my Retirement Planning at Any Age series (20s, 30s, 40s, 50s, 60s, 70s) may also be of some assistance to help you move in the right direction.
Sometimes we get stuck on a particular form of debt, so I broke those out into groups (automobile loans, student debt, credit cards, weddings).
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Whatever the case, you must start your debt payoff journey today. If you are reading this, you are heading in the right direction.
Lower expenses. Reducing one’s costs is tough for Americans. Why? Because they would have to *gasp* change their lifestyle.
Is the lifestyle you live producing the results you want? Is driving a fancy car giving you the freedom to visit your adult children? Would you be happier not working a job but maintaining a lower profile?
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These questions are personal in nature, and only you can answer them. Too many people can’t drive a Ford Focus (I have two now) like me. They tell me they want to but can’t because of social pressure.
So what are some ways to lower expenses? We can start by couponing. A couple of bucks here and there can add up.
How about keeping our cell phones for a little longer? You can invest the difference from not upgrading and start building passive income streams.
How about starting a small food garden or growing our herbs? If you have the space, chickens can pay you dividends in the form of eggs (and meat).
The inflation Ate My Paycheck series (101, 102, 103, 104, 105, 106, 107) covers many ways to get ahead now and later. However, you need to understand how to invest after these cost-cutting measures.
Start a Blog for Passive Income
Create multiple streams of income. I won’t cover too much on this because the following articles in the series will explain this topic in great detail.
I do need to define passive income and financial independence. Passive income is money that comes in although you aren’t working for it.
Many people get confused because they don’t think it takes work to obtain passive income. It requires a great deal of work upfront. You make money from the asset you create. You aren’t exchanging time for money but income-producing assets.
A book is the perfect example of passive income. You put in, say, 40 hours to create a book. However, it can generate revenue for the rest of your life, plus 70 years after death. Nice.
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I discuss other forms of passive income throughout this series. Financial independence is when you have enough passive income to pay for expenses and, eventually, your entire lifestyle.
Invest in assets. Assets are items that produce passive income. Please reread this statement because many people get confused.
Banks like to tell you that your boat is an asset. Your boat is an asset for them because they can take it and sell it if warranted.
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Your boat is not an asset for you; it is a liability. Read “Rich Dad, Poor Dad” if you have trouble understanding this concept.
You can turn your boat into an asset if you can use it to make money, such as for a fishing business or advertising on the side of it.
You’ll need assets that produce money for a great retirement. This way, you do not depend on a government pension or social security alone.
Conclusion. Take baby steps towards retirement every day. People tend to overestimate what they can do in a day and underestimate what they can do in a year.
I have amassed over 550+ books on Amazon by releasing one a day. However, if I had started with the intent of producing 500 books as fast as possible, I would have burned myself.
When planning retirement, assess your debt. Figure out your debt payoff date (read “I Will Teach You to be Rich”)and create multiple income streams to increase your payment rate.
Income Investing vs. Inflation
Look at your bills. If they total $1,500, make an effort to reduce them to $1,300 and invest the remaining $200. Seriously, this is how you become wealthy (read “Manage Your Day-to-Day”).
Find all of my Retirement Planning articles inside my Signature Series.
- Retirement Planning at Any Age (Amazon)
- Your Retirement Planning Guide 2 (Free PDF)
- Your Retirement Planning Guide 3 (Amazon)
Finally, ensure you have great daily habits. Wake up early, make your bed, and accomplish the most critical tasks for the day (not job taskers, but your priorities) first thing. These things will prepare you for retirement more than a 401K. 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.
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