I started working at age 16 during the summer of my sophomore year in 1996. I continued exchanging time for money until the summer of 2019.
In June 2019, I began exchanging time for assets. These assets then paid me money that I could use to purchase more assets.
I retired from the military in October 2023 after 24 years of service. Although my wife and I have not worked full-time since then, our assets and passive income have increased. Let’s take a look.
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Take a peek inside our investment portfolio. In October 2023, the value of our paper assets (stocks & bonds) was $276,000, and our dividend income was $1,380.
In January 2025, the value of our paper assets was $385,000, and our dividend income was $2,239. How did our assets increase by $110,000 and passive income increase by $1,000/month?
The simple answer is the power of compounding. Instead of working a job, my assets do the work for me. My job is to ensure I put their new income to work.
Every day, I wake up to more income. I am a hardcore income investor who loves using dividend income to increase my income.
Sometimes, it feels like a dream. To my wife and me, every day feels like Saturday. We greatly appreciate being able to stay home and “mind our own business.”
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But we didn’t just wake up one day and become income investors; we got help from Robert Kiyosaki, Dave Ramsey, and Ramit Sethi.
I spent the first twenty years of my military career clueless about finances. Although we weren’t big spenders, we accumulated a lot of credit card debt.
Looking back, we spent far too much on our first home in Arizona. This caused a ripple effect that resulted in $50,000+ of credit card debt.
However, in June 2019, we auto-corrected ourselves into a new lifestyle. That month, we put the first $1,000 into paper assets, literally starting from scratch.
We learned about earning passive income rental properties, rental rooms, dividends, business, and royalties. However, dividends are my favorite type of passive income.
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What is income investing? When you purchase a gift card for $50, you expect to receive $50 in value. The face value of the gift card is $50.
If you purchase a $50 gift card for $40, you will receive $10 of additional value—that’s income investing in a nutshell.
You are looking to extract additional value from a known quantity. The more you research, the better deals you find.
Income investing is the process of purchasing securities with the express intent of collecting income. The two questions you ask are: is the product safe, and how much does it pay?
Let’s say you have $2,000 monthly to invest in the stock market. You decide to invest in Tesla (TSLA) stock that does not pay dividends.
You hope Tesla’s value will increase so much in 20 to 30 years that you can sell it at a massive profit. Capital gains and income investing are very different from his approach.
Let’s invest $2,000 as an income investor. I look for products that yield over 10% or have the potential to grow while paying huge dividends.
I can purchase a closed-end fund like Oxford Lane Capital (OXLC) that yields 20% and will pay me $33/month forever.
I could purchase a dividend stock like CVS (CVS) that yielded 6%. However, I expected CVS’s price to recover, ensuring a high total return—which it did.
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The merits of income investing. So why become an income investor? Income investing is how you free yourself from the workforce.
Income investing aims to create a paycheck that will replace your work paycheck. You earn a high yield that you can reinvest to generate more income.
Income investing gets you where you need to go much faster than index fund and dividend growth investing.
Is income investing risky? To some, looking at 20% yields can give them pause. However, if you follow these products, you’ll understand why they yield so much.
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The best way to succeed at income investing is to divide your portfolio into buckets. You have your emergency fund, index funds, dividend growth stocks, and income investing.
I have all of these buckets, but I make income investing my largest allocation because I love money. I want to purchase securities that pay me over 10%.
Seeing the world through income. Wouldn’t paying your electricity or water bill with dividends would be nice? How do you get to that point?
You start making better decisions with your money when you see the world through the income investing lens. You can convert every dollar into more dollars.
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Let’s say you want to take a family vacation to Disney World that would cost $8,000. You decided to stay local and spend $2,000 while investing the $6,000.
If you invest the $6,000 in the PIMCO closed-end fund (PDI) at 12%, you will receive $60 monthly for the rest of your life.
The following year, you spend $2,000 on the trip and have the $720 in dividends from PDI. If you make the tough decision to invest for a few years, your dividends will reward you.
I am living proof of the magic of income investing. Every day, I wake up to more income. My first month of dividend investing yielded $0.25 from Papa John’s (PAPA).
However, I stuck with it and now earn $2,300/month in dividends. Do you understand how much $2,300 is? For context, my mortgage is $1,700/month.
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Every year, the dividend snowball effect grows even more significant. My pile of money keeps growing faster and faster, and my dividends are putting me in a higher tax bracket.
How long do you want to be in the workforce? If you want a different result than all of your peers, you’ll need to do something different.
Conclusion. All of my peers are in the workforce. They all retired from the military but decided to purchase liabilities like boats, RVs, and cars.
I can purchase these things with my dividends, but I want more dividends. Eventually, my dividend income will be so high that I’ll start spending more frivolously.
I’ll most likely earn $10,000/month in dividends around the time I turn 50 (I’m currently 44). With that amount, I can pretty much do whatever I want in this life.
With just one month of dividends, my wife and I can travel to Spain. So, that’s my dream: to earn so much dividend income that I can do whatever I want.
What are your dreams? Are you willing to set aside your current wants for your future dreams? Income investing requires capital that must come from somewhere.
To build a base of dividend income, you must invest a pile of money. This cash flow comes from your budget. You must create change in your life, to establish this pot of cash. Are you willing to double down on changing?
I love waking up to fresh income. Nothing makes me happier than seeing new dividends in my account. I went from broke to income investor, and I am not looking back. You, too, can feel the power of income if you want it badly enough. 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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