The path to becoming wealthy can take many twists and turns, and may lead to unexpected places. Everyone’s path is different and exciting in its own right.
Most people believe that the only path to wealth is through a high-paying job, but this assumption is incorrect. The money you make from your job must go somewhere, and that somewhere is how you build true wealth.
But, what if you don’t have a high-powered job? Are you S.O.L. (out of luck)? Luckily, there are things you can do outside of your career to assist you.
The Metaverse vs. Your Job
Today, I want to focus on dividend investing and renting rooms as two techniques to assist you on your wealth-building path. After reading this article, you should have a better understanding of both and be able to decide which path is more suitable for you. Let’s begin.
Why you should become a dividend investor. Dividends are the most passive form of passive income. They are also portable, meaning you can take your income all across the world.
I am a hardcore dividend investor—more specifically, a hardcore income investor. This means I invest solely to earn dividends and create an income stream.
Once you receive your paycheck, you should invest a portion of it into dividend-paying stocks and funds—a large portion. Investing over time can lead to significant wealth accumulation.
Let’s say you earn $5,000 per month from your job and find a way to invest $1,000 in a high-yielding product that yields 12%.
The Magic of Cash Flow
Using simple math, after ten years, you would have $120,000 in investments and $14,400 in annual income. That means you would earn $5,000/month from your job and $1,200/month from dividends.
The best part is that once you stop working, your $1,200 would continue to hit your account. That’s how wealthy individuals retire and maintain a wonderful lifestyle.
To become a great dividend investor, you must dedicate at least one hour a day to reading books and following the news.
That doesn’t mean you must buy and sell your stocks every day, simply that you must stay abreast of what’s happening in the markets.
Why you should rent rooms. Of all the things I write about, people truly hate the idea of renting rooms. However, I continue to write about it every day. Why?
Overcoming Limiting Beliefs 102
Renting rooms is simply the most powerful and accessible way for the average person to become wealthy.
Why is renting rooms such an effective and powerful financial tool? Because the fastest way to become wealthy is to avoid having housing expenses.
I never considered having roommates until I got my family into $77,000 of debt. Once you have that kind of debt, your perspective on life changes.
At the time, we were paying $1,100 per month for our mortgage. We secured two roommates at $500 a piece. We quickly started accumulating savings while paying down debt.
How to Make $500/Month in Dividends
We then purchased our third house, with a mortgage of $1,500 per month. We got two roommates for $800 apiece. Again, we quickly increased our financial portfolio.
Most Americans pay between 30% and 45% of their monthly expenses toward housing costs. Imagine if you could get that number to zero.
Now, imagine converting those monthly savings into interest-paying securities. How fast could you become rich?
Why people hate renting rooms. People don’t hate renting rooms; they hate the idea of renting rooms. Let me explain.
The American Dream Costs $5 Million
People often assume that their future roommate will be a terrible person and a horrible housemate. That could be true.
However, over time, they would learn to screen for the best possible roommates. It took my wife and me a couple of years to learn how to find great roommates.
However, once you find the perfect roommate, you will be printing the easiest money you can imagine. That’s when your life will begin to change for the better.
Renting rooms vs. dividend investing. So, which path should people take to build wealth and find financial freedom? My answer may surprise you.
I believe every homeowner should learn how to rent rooms first. That’s right; it’s a skill set that can generate enough money to pay your mortgage.
Series “I” Bonds vs. Roth IRAs
You can’t just place an ad and get a great roommate. You must learn how to write copy (advertise), talk to prospective roommates, clean and organize the rooms, and maintain standards in the home.
However, if you learn how to acquire roommates, you ensure yourself an income stream no matter what happens in life.
Imagine you have a $2,500/month mortgage and you get downsized. However, you know how to find two roommates at $1,000 per month each.
Now, you have a nice buffer to assist you through the job search. Again, renting rooms is a skill every homeowner should learn.
Financial Independence through Real Estate 3
Dividend investing is a great way to generate an additional stream of income. However, you cannot sleep on dividends or avoid the rain.
Your home is the most essential part of your lifestyle. Without a stable home, the rest of your life will begin to crumble.
Eventually, you’ll make enough in dividends to cover your mortgage. Heck, eventually, you won’t have a mortgage.
However, through thick and thin, the person who knows how to acquire roommates will come out ahead. They have the ultimate insurance plan for their life.
From Dirt to Dividends 6
Dividend investing AND renting rooms. What if you combined renting rooms with dividend investing? Well, that is a recipe for a prosperous financial future.
Imagine renting two rooms for $1,000 each per month and depositing that money into your investment account at 12%. How fast could you become rich?
Let’s say you invested $1,000/month from your job and $2,000/month from your roommates. After ten years, you would have $360,000 (using simple math).
Using compound math, you would have $641,000, and your portfolio would yield $3,600 per month. That’s the magic of having discipline and using compound interest to build wealth.
Overseas vs. Homestead vs. Small Town
Conclusion. I convinced one of my friends to get a roommate for three years. During that time, he amassed over $100,000 in savings.
He decided not to keep his roommate, but he appreciates the wealth he has accumulated. Renting a room can be a life-changing experience.
I love dividend investing more than anything, but renting rooms is a valuable skill that can significantly impact the trajectory of your life.
Remember, you can also rent rooms to family and friends. In many cases, this is an even better setup than finding strangers.
Either way, everyone in America needs a side hustle and a source of passive income. When you combine both ideas, you will become rich. 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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