It takes 10,000 hours to create a reliable income stream. Depending on your daily habits, that timeline can range from five to ten years.
With this knowledge in hand, be very wary of anyone claiming to have found the secret to quick passive income. The only passive income that matters is in your money system.
What is a money system? In “The Millionaire Fastlane,” MJ DeMarco says the money system is your true source of passive income and financial freedom.
Getting Started with Preferred Shares
You can use multiple methods to expedite how you fill your money system, but THE MONEY SYSTEM is the end game.
The money system is your investment portfolio, specifically dividend investing. Your dividend portfolio will allow you to quit your job, sell your business, or stop writing books—it’s your path to financial freedom.
Back to reality. My wife and I are retiring at the end of 2023; I am 42, and she is 39. We can live comfortably in Pensacola, Florida, on $6,000/month of passive income. Let’s quickly review our passive income stream as we move into retirement.
Military retirement. My military retirement will be roughly $7,000/month. This covers all bills, food, extra spending, and some savings.
The Invisible Budget
Rental rooms. Our primary residence has two massive master suites that we decide to rent. This brings in $2,000/month in pure passive income.
Rental properties. We also own two additional homes that clear a total of $650/month after mortgages.
Money system. Our dividend portfolio includes index funds, dividend growth stocks, and income-investing securities. It brings in roughly $1,800/month on a portfolio of $200,000.
Living below our means. In total, our number is around $11,500/month in consistent passive income that will keep increasing annually.
The Road to Wealth: Where Will You Stop?
We can retire comfortably because we choose to live below our means. For many people, $11,000 per month is not a lot, but we value time over money.
How long did it take to build this income? I was in the military for 24 years. We had two kids, traveled the world, and struggled financially during this time.
However, we became financially free by focusing on the big three passive income sources: dividends, rents, and royalties.
These income sources continue to grow over time, but they do require upkeep. All forms of passive income require maintenance; it is just a matter of whether you are performing it (or someone else).
Run a Profitable Herb Garden
Why didn’t I include my books and blog? I do not include my books and blog in my passive income list because they are not ready for primetime.
I have been writing and releasing books for about two years, and I earn roughly $200/month across Amazon, Draft2Digital, and my blog.
However, I am taking the long, slow, and true path to build royalty income. I like Gary Vee’s quote, “Release your content for free for 14 years, and you have a multi-million dollar business at the end.”
My end goal is to have my royalty income fund my money system. If I earn $1,000 in books, this money will go directly into my money system—making it passive forever!
Our Most Stressful Moments as Homeowners
Building a passive income stream takes a long time. You want to make something that is independent of trends, keywords, and gimmicks.
Be careful with the term passive income. You will see all types of claims about how much money someone made overnight, in a week, or during a month.
Remember, the only claim that matters is dividend income from their money system. That means their business endeavors went through the funnel of life and made it into their brokerage account.
For example, my military retirement is the equivalent of having $2.1 million at a 4% withdrawal rate. Actual passive income takes a lot of pure money to create.
Stock Market Investing 106: High-Yield Alternative Investments
Would you rather retire on $10,000/month of Etsy money or $3,000/month in dividends? How about $10,000/month from YouTube or $3,000 from rental income?
Longevity is key. There’s a reason why business, real estate, and the stock market are still the way to become wealthy—they require longevity.
Don’t get discouraged if your income stream takes a while to bear fruit. It’s supposed to grow slowly and then hit the jackpot much later.
If you can turn a massive profit in a month or two, then someone else can as well. That stream will wither away in a year or two.
This is fine; however, ensure you put those profits in your money system. I earned $2,000 total from books on Amazon over two years (from Jan 2021). I don’t advertise my books.
Cash Flow 104: Create Your Long-Term Strategy
I couldn’t be more proud because I didn’t start with an established audience. Writing high-content books is the ultimate grind, but it will pay off in ten years. Or so I hope.
Build yourself up. If you have a job, ensure you are building your money system. If you make money online, drive Uber, own real estate, or play basketball, ensure you are building your money system.
True wealth comes from creating systems that produce cash flow. Making money online can be a system but will require constant monitoring. That’s good, as long as the money gets into your money system.
Eventually, you will want to buy farmland, rental properties, stocks, gold, and perhaps cryptocurrencies. It is all part of your passive income profile.
Scarcity vs. Abundance Mindsets
Conclusion. My wife and I will be genuinely retired by the end of 2023. It wasn’t an overnight internet success that set us free. It was years of making small, intelligent decisions.
Don’t fall for the clickbait; life is tough. Staying married is tough. Growing your wealth while raising kids is challenging.
Anyone who tells you otherwise is not your friend. The income from our roommates goes directly into our money system. At the same time, we grow our personal projects. My pet project is building my blog and releasing books.
My wife wants to go to a beauty school. However, even in retirement, we must continue to grow our money system. Please make as much money online as possible; just ensure it makes it into your money system—the best source of passive income. 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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