What’s the rush? We all seem to want to become wealthy beyond our wildest dreams—quick, fast, and in a hurry. The quote “it’s not about the destination, it’s about the journey” comes to mind. So, how do we slow down, reduce stress, make great decisions, enjoy life, AND become rich simultaneously?
The answer is that we focus on building a portfolio of long-term assets. I define long-term assets as items that produce money that we can leave to our children. I like to add the “leave to our children” because it helps qualify the assets in which we decide to invest our time and resources.
Just because you build wealth slowly doesn’t mean you will live your entire life poor. In fact, quite the opposite. I wrote an article yesterday titled “From $28/mo to $700/mo in Passive Income in 2 Years,” where I reviewed our journey to financial freedom.
The Business of RV Life
The month where we earned $28 was October 2019. We still had -$77,000 of debt and multiple cars, loans, and credit cards to finish paying. By October 2021, we were completely debt-free, had $200,000 in the bank, started a business, and were ten times happier about our financial situation.
That’s the power of building wealth slowly; you get to learn how to form deep thoughts about wealth, relationships, and life. The more you read books, talk with like-minded folks, and generally become more serious, the more cohesive your life becomes.
Don’t let the people who say “money is not important” set you off your path. To have a wonderful life, you need to be in complete control of your finances. You need a plan for every dollar that enters your household. Once you control your finances, you’ll be surprised at how much better your relationships and interactions become.
Build a Portfolio of long-term assets. I want to focus on building long-term assets. You may not know what this means, so I will give concrete examples of ways to achieve this goal. Once you understand the concept, you will realize that life isn’t about making money but rather obtaining long-term assets. Let’s begin.
How to Start Dividends Investing 103: Pick Your Platform
Your Job. Your job is not a long-term asset because you can’t give it to your children. However, most of us will need a job for a good portion of our lives. So once we pay our living expenses, our primary mission is converting our earned income to long-term assets that produce passive income.
We can convert our earned income to interest from cryptocurrencies, dividends from stocks, income from a business, and rents from real estate. Whatever our heart desires, but we need to have a solid plan. Living above our means, getting caught in toxic consumerism, and falling into the trap of lifestyle inflation are ways to waste our earned income.
The Stock Market. Many people chase fast capital gains in the stock market. Why? Remember that the stock market is not a tool to make you rich. Getting a 10% annual return in the stock market is considered pretty amazing. However, I can rent rooms in my house and achieve an infinite return consistently every month. I am printing money in my home that I can convert to passive income via the stock market.
What’s So Great About Being Independent?
Once you realize that the stock market is not a wealth generator, you can start thinking about the long-term. You can buy solid dividend-paying blue-chip stocks, quality closed-end funds, and invest in index funds for the long term.
Yes, all the traders around you will be making money on the new hot stock, but how long before they pull their money out? When is the right time for them to take profits? That is what they worry about every night. I wake up and have $30 dividends from AT&T in my account. Which life seems better to you? Also, which stocks have a better chance to be around to leave to your children?
Real Estate. So many of my friends sell their homes because being homeowners sucks. I get that, but we are here to build a portfolio of long-term assets. We need to keep these properties for the sake of our children. Not only that, we need to own multiple homes.
Here is how I think about being a homeowner; I call it the Harvest Equity Method. When you rent properties, you want to break even or turn a small profit. You’ll pay fewer taxes on rental income. Once your home has enough equity, you can then convert the equity into cash using debt. You can use a home equity line of credit or cash-out refinance to extract tax-free cash.
The Harvest Equity Method helps me sleep well at night because I know I am not losing money. I have extracted tax-free money from house number one, and house number two is becoming ripe. House number three is growing in value quickly, so maybe in 3-4 years, we can extract more wealth from this one.
You’ll Need $20,000/month is Passive Income
When we extract cash, we invest in more assets, such as properties, dividend stocks, and businesses. We keep the properties and build even more long-term assets as we build wealth slowly.
Cryptocurrencies. Everyone is looking for the next meme coin to make them rich. We had Dogecoin and Shiba Inu during the 2021 season. Yes, one good investment can set you up for life. However, if you made $300,000 in capital gains, would you know how to invest it into long-term assets?
Crypto is actually pretty simple. Invest in coins that are the tokens of their own smart chains. These tokens include Etherum, Polkadot, and Cardano—coins with their own individual smart chains. The more people build out the smart chains, the more coins people use, and the more valuable the tokens.
Don’t Gamble With Your Retirement 4
On top of that, centralized exchanges will pay you significant amounts of interest to invest in these coins. Voyager pays me 12% interest to keep my money in Polkadot (DOT), and the coin price can rise as well.
If you allocate a small amount of money for the meme coin hysteria, that’s fine. Ensure you invest the winnings into long-term crypto assets.
Business. We should all have our hands in some sort of business. Whether that is a home business, online or outside, or content creation, we need to be in total control of an income source.
Building a business is one of the best ways to create a long-term asset. We just need to review how we can leave our company to our children. If we start a YouTube channel, how can we leave that to our children?
We may not be able to leave a YouTube channel to our children, but we can write books, online courses, consulting firms, etc., on how we built our channel. In the business world, you have your business, and then you have the “how you created your business” model.
Create a Never-Ending Stream of Content 2
For example, I am building a book business. Once I reach, say, $1,000/month in royalty income, I can start writing how I created this income stream. I hazard a guess that more people would be interested in my income stream than my usual books.
I am reading a book about how to start a general contracting company. The author is already a successful general contractor with a large business. Now he can create a second income stream describing how he built a successful contracting business.
You can do the same with sports, marriage, relationships, the military, etc. Talking about your experiences is where the money truly is—as there is always someone who wants to follow in your footsteps. Build a great business model so you can leave it to your children.
H.E.N.R.Y. -High Earner Not Rich Yet
Conclusion. I could write for days and days, but I don’t want to overdo it in one article. This is just the introduction to the idea of building long-term assets. It will be a mindset shift for many people.
When I look at buying a $60 videogame, I weigh other things I can purchase instead. There is always stock or crypto where I can better spend my money. It is hard to stop thinking in terms of long-term assets.
As you build wealth slowly, your quality of life will improve dramatically. Things like car trouble or air conditioning outages will come and go with little stress. You’ll have the resources to handle these situations with little fuss.
Having less stress and more options is why we build wealth truly, and you’ll be able to reap those benefits as soon as you build the right mindset. Please follow me on Twitter and my Facebook Page for more investing knowledge. Enjoy and Happy Investing.
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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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