Life is good when you live for free. Housing is the highest expense in most households, and rightfully so—we all need a clean place to stay.
However, mortgages and rents have increased faster than wages, especially since the pandemic. If you don’t keep improving your income, paying your housing costs will be hard.
The best way to keep ahead of unrealistic housing adjustments is to pay for your mortgage entirely with passive income. Putting yourself in this position may seem unfavorable, but it is possible.
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My mortgage, my way. I have always been a fan of house hacking to reduce my out-of-pocket mortgage costs to zero.
I wrote the articles “Mortgage Zero” and “Mortgage Positive” a few years ago because our roommates covered all our housing costs.
When someone pays your mortgage, it’s very likely you will amass great wealth. My wife and I leveraged roommates for 4.5 years to pay off debt and build a large dividend portfolio.
Today, we use dividends and rents to cover our mortgage entirely. We are living our best lives, even in retirement, because of passive income. How did we get to this point?
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Unlock your passive income potential. The key to unlocking your passive income potential is to have a powerful goal in your mind.
Setting your mortgage as a passive income goal is a fast way to get headed in the right direction. For example, our mortgage currently sits at $1,900 per month.
We earn $1,500/month in dividends and $650 in rents, allowing us to cover our mortgage entirely from passive income sources.
Of course, we bring in more passive income from options trading and book sales, but that is neither here nor there. Our main objective is to cover our housing with consistent, passive income.
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How much do you pay for your mortgage? What types of income streams can you start while replacing your earned income with passive income?
Roommates are the best way to start. In the past, nobody wanted to consider taking on roommates to better their financial position.
How do you feel about roommates now that housing costs continue to skyrocket? I understand that nobody wants somebody else in their space, but is your “independence” worth the financial struggle?
The best part of getting roommates is that you can choose them yourself. Is there someone you know who is clean, respectful, and organized?
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You could find a mutually beneficial situation by asking a few questions. No one wants roommates, but everyone wants to be debt-free and have passive income.
If you want to change your life, you must change your life. This means you need to do something that isn’t “ideal” but will put you in a stronger long-term financial situation.
My wife and I used the passive income from roommates to pay down $77,000 in debt and build a $200,000+ dividend portfolio. Now, we are chillin’ hard in retirement at an early age.
Was getting roommates worth it for us? Hell yes! Was it fun? Heck no. However, we had to do what was necessary for our survival. Nobody was coming to save us.
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Try renting your car. If roommates are out of the question, you can try renting your car. I have a friend who earns over $1,000 with her minivan on Turo.
Once you earn money by renting your car, invest the income into dividend-paying stocks. You can probably build a dividend portfolio that covers your mortgage in five years.
How about options trading? Another way to earn large amounts of passive income is options trading; however, I don’t recommend it for most people.
Trading options can be emotional, so most people will not have the capacity to handle the added stress of daily stock market interactions.
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I use safe option trading techniques (covered calls, cash-secured puts) to earn 5% on my capital every month.
That means I earn $1,000 per month on my $20,000 portfolio. This is a significant return; I don’t find it too stressful. However, I have been studying the stock market for over four years.
If I used options to cover my $1,900 mortgage, I would want to have at least $80,000 invested. That gives me roughly $4,000 per month in options income.
The premiums on options contracts vary wildly from month to month, so I want some additional capital to ensure I earn enough for my mortgage.
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Starting a passive business. You can also start a business that covers your mortgage. You can create a blog that covers all of your mortgage costs.
However, reaching a high level of passive income from your creative pursuits would probably take five years. This can include YouTube, blogging, writing, podcasting, art, or music.
Ideally, you want to create something that aligns with your current work situation. When discussing a mortgage, running off and becoming a YouTube star becomes very scary.
I began writing while I was still in the military. As much as I love to write, the military paid the bills. A mortgage can cause great anxiety because it is a thirty-year commitment.
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Don’t do yourself a disservice and pursue a creative career prematurely. The good part of being creative is that you can operate this business at your pleasure.
Again, allow at least five years to earn enough royalties or residual business income to cover your mortgage.
Many entrepreneurs fail because they try to expedite their timelines, causing too much stress on themselves and their businesses.
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You can also use tools like vending machines, ATMs, arcades, cash washes, billboards, and parking spaces to earn additional passive income.
Conclusion. When it comes to passive income, the sky’s the limit. However, you must train yourself to see a world full of money.
It’s tough to see all the money the world holds when you look through the lens of holding a job. You believe that your hourly wage is what you are worth.
Once you break this mindset (it takes a lot of reading), you can see the world for what it truly is—a place where value reigns supreme.
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If you can create more value for someone than their dollar is worth, they will exchange their dollar for your product or service.
Currently, housing is the hot-button topic; therefore, renting rooms will be quite lucrative. People need to become used to living in 1,000 square feet or less.
If you own your home, consider yourself lucky. It is time to solidify your financial position for the long haul.
You should already be thinking about purchasing homes for your kids because real estate is only getting more difficult to enter. 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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