We all want to lead a fantastic life; a life filled with adventure, travel, and fun. However, most of the time, we fill our lives with duty, responsibility, and work. How do we begin to live the life of our dreams?
The fastest way to change your lifestyle is to prioritize the importance of time over money. The higher value you place on time, the more you understand the concept of money.
However, there’s a dilemma: how do you free up your time when you need money? How do you avoid exchanging time for money?
Dividend Investing in Your 50s
Frankly, this question is the key to opening up your life and freeing up your time. You simply need to earn money 24 hours a day, even while you sleep. But how?
Passive income is the key. Passive income can solve all your financial problems if you understand how to manage and control it.
Passive income is money that comes from your assets. The first step to understanding this statement is to understand what an asset is.
According to my favorite author, Robert Kiyosaki, an asset is anything that puts money into your pocket, and a liability is anything that takes money away.
Therefore, the goal of life is to accumulate as many assets as possible while avoiding liabilities (at least initially).
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How do you collect assets and generate passive income? Let’s say you received $5,500 from your tax return; there are many things you can purchase.
You can purchase furniture, like I did last year. You can put it toward debt or a down payment on a used car. You have unlimited ways to spend your $5,500.
However, smart people purchase assets. Let’s say I spent $5,500 on Verizon (VZ) stock via Cash App. My $5,500 would allow me to purchase 125 shares at $44 each.
Those Verizon shares would pay me $339 annually or $85 quarterly. If I could live on $339 per year, I would be a free man.
Dividend Investing in Your 40s
Therefore, the goal of life is to acquire as many assets, like Verizon (VZ) stock, as possible. Will it take a long time to generate enough passive income to free yourself? Perhaps, but what else do you have to do?
Passive income is massive work. The internet tells you that passive income comes easily; that you can simply buy a vending machine, and it will automatically deposit $2,000 per month into your account. However, this is not the case.
The only true way to build passive income is to understand the asset you purchase. Every asset has its own foundational strategies you must follow.
If you understand the asset, you will begin to earn passive income. The more assets you learn about, the more passive income you will generate. Let’s look at some of my passive income strategies.
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Dividend investing. Dividend investing can be a slow way to generate passive income; however, it involves relatively low risk. Let’s say we want to generate $100,000 of dividend income from Verizon.
You would need to purchase 36,900 shares, which would cost you $1.6 million. Therefore, you would need to stay in the workforce longer to purchase these shares.
The good part is that you can generate more passive income from other sources to contribute to our Verizon retirement.
Room rentals. The best way for the average person to generate passive income is to rent out a room or two. I generate $1,000 a month in room rental income that I can use to purchase dividend stocks.
However, it takes skill to advertise your room rental and attract high-quality renters. Trust me, you will go through a few roommates before you find a good one. But once you find a good one, it is like printing money for free.
Passive Income Road Trip #7: Road Trip
Real estate. The returns on real estate are high, mainly due to the tax benefits of owning it. However, you can’t just buy a full-price home on the market and rent it for a high profit.
For me, the best leverage in real estate is time. Because I live below my means, I can wait for my rental prices to appreciate. I also won’t purchase a property where I wouldn’t live myself.
If you know how to repair and build homes, you can purchase properties at a deep discount. Some people can find off-market homes at stunning prices. Everyone has their own way to leverage real estate.
The main takeaway from real estate (and all passive income sources) is to read as many books as possible. The more experience you have, the stronger you will become.
Passive Income Road Trip #6: Royalties
Business. A great way to build passive income is to start a business. The key to building a passive business is to remove yourself from the equation.
For example, let’s say you start a car wash. You want to hire a manager to run it. It will lower your profits, but free up your time.
Of course, you probably don’t want to start by opening a car wash. It may be better to purchase a food truck, a vending machine, a parking lot, a billboard, or an ATM.
The options are limitless in business, but spend a year or two reading books to understand how to add value, find a niche, and build your core competencies.
Passive Income Road Trip #5: Real Estate
Start getting to work. So, you can start a business or buy one (via shares on the stock market). You can rent a room or a whole home. You can invest in dividends or trade options.
The main idea is to get started today. Each experience you create will build upon the next. Passive income is actually a test of your education level—not your formal education, but your financial education. The more time you put in after work, the better you will become at spotting deals.
The true test of building financial education is how you spend your free time. If you spend two to three hours after work reading about the stock market, building a business, producing YouTube videos, or scrolling Zillow for deals, you’ll become a great passive income hero.
Conversely, if you spend your nights scrolling TikTok, drinking beer, and sleeping in late, you’ll have a hard time in the future.
Passive Income Road Trip #4: Cryptocurrencies
Conclusion. I am not here to judge anyone’s lifestyle. However, if you want to travel for multiple years across multiple countries, you’ll need passive income.
If you want to spend an unlimited amount of time with your grandkids, you’ll need passive income. If you want to quit your job and homeschool your kid, you’ll need passive income.
The question is, how bad do you want these things? Are you willing to convert your Netflix time into reading time? Are you willing to convert your drinking time into writing time?
Passive Income Road Trip #3: Dividends
Most people cannot fathom giving up their drinking and Netflix time; that’s why they won’t generate passive income.
But if you want different results, you must do things differently. In June 2019, I made a vow to do better by my family. I wanted to get out of debt and free my time.
From that day in June 2019, I have been on a mission to generate as much passive income as possible by learning as much as I can.
Passive income is just the physical manifestation of your financial education. When you’re ready to expand your mind, you’re ready to earn passive income. However, I don’t think it will be easy. 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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