Every year, I write my passive income resolutions. I put them out on New Year’s (2022, 2023, 2024) so that they can set the pace for my financial ambitions.
This year, I want to supplement my resolutions with some hard data on how my finances look at mid-year. This update will serve as a guiding point as I head into 2025.
A quick look at retirement. Retirement is not about getting a pension or saving a certain amount of money—it’s about creating income streams.
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I call my program Happy Cash Flow Retirement (HCFR) because it allows me to balance time and income to make my retirement as enjoyable as possible.
I am living an HCFR at age 43 because I learned I can do better for myself by not working a full-time job. Of course, this means I must understand budgeting, saving, business, and investing.
As you review my finances, ask yourself how your Happy Cash Flow Retirement looks today. How much money would you have coming in if you stopped working? What things could you do to create a passive income stream from home? With no further ado, let’s begin.
Military Pension. I consider myself blessed because I receive a military pension every month. Most people will never have this type of passive income. Therefore, I pay it forward by passing this information on to the world.
Although people may not be able to join the military, their kids can. Although the military has become a bad word for many adults, it can change their lives forever.
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The benefits of a military retirement are too great to describe here, but I urge any young person to evaluate their options. Contact me if you have any questions about the military.
Of course, earning $9,000 per month in passive income is great because my wife and I live below our means. We live far below the $9,000 to save and invest from this pot of money.
By living below our means (paid-off cars, budgeting, not eating out too much), we have positioned ourselves to save and invest all the other cash flow coming in from different sources.
The only way to get rich is to decrease expenses and increase income. When it seems like we have “too much” income coming in, we think about how we must help our kids in the future. That keeps our eyes on the prize.
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Dividends. Dividends are my favorite income stream—by far. I love dividends because I control how much I earn. I decide how to reinvest my dividends to earn more dividends.
I have been dividend investing for five years and am just getting started. I cannot even fathom what my portfolio will look like in 20 years. Every month, I get excited about receiving huge amounts of income from my dividend-paying stocks.
My wife and I currently earn $2,100 per month from dividends. This number is growing fast because of the tax-free GI Bill income that I can redirect into my dividend portfolio.
I have three types of dividends coming in: index funds, dividend growth, and income investing. They all offer risk and reward, with index funds offering the least risk and income investing the most reward.
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The more you study the different nuances of dividend investing, the less risky it will become. Robert Kiyosaki says, “There are no risky investments, only risky investors.”
My favorite dividend quote comes from John D. Rockefeller, “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”
Roommate. My wife and I had roommates from 2019 to early 2023. We learned a lot about the process of getting and keeping a roommate. After a 15-month hiatus, we found a fantastic roommate who pays us $1,000 monthly.
Why is having a roommate so vital to our financial success? Roommates help us create a buffer between reality and our portfolio. What does “creating a buffer mean?”
When you create your budget, you try to factor in random events. No matter how much you try, something crazy happens every single month.
For example, I recently went to pay for my RV’s registration. I expected to pay $300, but I walked out with a $1,300 note because of a tax difference between Alabama and Florida.
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We can keep the $1,000 in our roommate account and use it as required. We always have a budgeting plan, but having this amazing buffer for backup is undoubtedly nice. Whatever we don’t use, we can save and invest.
Having a roommate is the single greatest wealth-building tool available to the average American. However, the average American frowns on having a roommate. I hope they can find a way to earn $1,000 passively somewhere else.
Rental income. My wife and I own three homes and a tiny house. We have cash flow from two properties, one in Florida and the other in Arizona.
Having multiple properties is a pain in the rear end; however, it is more than a financial decision. We know that our kids will be good to go because they already have real estate, which is the primary reason we keep our additional homes.
We earn $500 from the Florida house and $200 from Arizona. It’s fairly easy money; however, we must prepare ourselves for random maintenance. Although it looks like we are cash-flowing, we are probably breaking even.
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There are some tax benefits to “losing” money every year on your homes (including depreciation). However, there are income requirements you must fall under to get a $25,000 loss on your adjusted gross income. This can be quite powerful in retirement.
Creative writing. I love writing. I love writing because I don’t need to earn any money from the process. I spend roughly two hours per day writing for my blog and publishing books.
Everyone can become a writer; you only need to write about something interesting. We all have experiences that can help others.
If you don’t like writing, try sewing, knitting, nails, hair, gardening, fishing, or anything else. The idea is to find something you love and create a small income stream by sharing it with others.
I earn about $250 to $300 total from my blog, books, and Medium. Again, I could earn more if I commit more time to these projects; however, I love it just the way it is.
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I can stop writing for a month, and it wouldn’t change my life. Nobody depends on my writing, and that’s how I like it. When creating a passive income stream, build something that explicitly fits your personality and time requirements.
GI Bill. The Department of Veterans Affairs (VA) pays me $1,730 to go to Pensacola State College and get my Bachelor’s Degree in Business.
This is perhaps one of the best perks of serving your country. Going to college at age 43 is a little jarring, but it’s definitely not bad.
The best part is receiving $1,730 in tax-free income and forwarding it directly into my Wells Fargo brokerage account.
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Again, this particular income stream is not available to everyone, but use your imagination. Maybe you have some consulting or freelance opportunities you can leverage in your field. Be creative.
Putting it all together. I can even add in more passive and active income that comes our way. It’s incredible how many opportunities we see because we don’t have to work daily.
The key to retirement isn’t hiding behind your pension, social security, or 401 (k); it’s using those things as a starting point for something better.
My wife and I can live on our military pension for the rest of our lives. However, our pension is not an asset because we cannot pass it down to our kids.
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Conclusion. We can pass down our homes with the knowledge to maintain roommates. I can pass down the books I have written and the dividend portfolios—those are true assets.
When we look at the big picture, the more we do for ourselves, the more we help others. In one year’s time, I will write how these income streams have matured or changed. That’s why it is great to keep a record for future generations. 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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