Now, we have been all over the world on passive income. Previously, we covered financial mindset, retirement income, dividends, rents, royalties, cryptocurrencies, and automated business. There is only one more type of income to discuss—cash.
Yep, that’s right. Cash is a form of income, and it is vital to our success while living overseas. You must remember, living abroad carries its own inherent risks.
We trust to have access to our bank accounts and financial institutions in America. However, overseas things can be much different. The governments may control access to your local bank or ATMs.
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We must prepare at all times for “weird” things to happen. The best way to prepare for emergencies is to have cash on hand.
Why cash? Cash gives us the freedom to move freely around the country where we live. Since we generate all of our cash flow in America, all we must do is travel back there.
So, our goal is to keep enough cash on hand to survive in our country for six months without access to our local accounts. But, this may be tricky.
People will expect us to have money lying around at home if we look like foreigners. So we must be smart about the locations where we keep our cash.
I would divide my cash pile between a few locations outside my home. Maybe a friend you trust or a secret hiding place is where to decide to store it. Perhaps you bury it in your backyard or at a business where you work.
How to Create Passive Income 103: For Advanced
The idea is to have multiple little stashes of cash to protect you from an immediate change of government or law. Trust me, back in 20002; I was in Niamey, Niger, West Africa, and things became heated quickly. Crap happens all the time.
Generating local currency. It may not be a bad idea to create local currency as well. Because we are outstanding entrepreneurs, we can start a small business or automated business.
Having access to local currency will keep us rooted in the local economy and allow our USD to grow and compound. Why spend money when it isn’t needed?
Cash on a higher level. We also want to keep an American-sized amount of money in our American bank accounts. Remember, as much as we love to live on dividends and royalties, crap happens. Companies can cut dividends, and media outlets can cancel your content, thus stopping your royalty payments.
The Business of RV Life
Having a large amount of cash can help you stay in your local country, stress-free, and ready to find alternative sources of income.
You don’t have to let all of your cash sit in a savings account, earning nothing, however. I like to use a tier system to keep my money still working for me but available on request. My tier system looks like this: cash on hand, high yield savings account, government bonds, and USDC stable coin.
Cash on hand. We talked about cash on hand above. Remember, when overseas, you want to keep a large amount of cash on hand but divide it among separate “safe” locations. It’s also a good idea to find a way to generate local currency.
High yield savings and government bonds. I talked about high-yield savings accounts and government bonds in the article “Investing for Interest 102: Super Safe Savers.” These vehicles are an excellent way to earn 2-5% interest on your cash. It does take 2-3 days for the government to return your money from bonds.
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USDC Stable coin. My favorite store of cash is the USDC stable coin. Currently, the interest on these coins is 9%. Even better, Voyager is releasing a crypto debit card that interfaces directly with your USDC account. So you can have immediate access to your savings in a pinch.
Conclusion. Using the tier system will ensure you can access your cash in a pinch. Also, if there is a financial emergency within the US economy, you won’t be stranded (broke) in another country.
Living overseas is a fantastic experience, and the better prepared you are, the more likely you can keep that reality. Having cash on hand is the first step to protecting yourself from random changes in the local economy.
Keeping cash throughout your portfolio ensures that madness in America doesn’t affect your well-being overseas. It is a ying-yang scenario and will give you deep comfort at night. Again, thanks for reading more about living overseas passively. There is more to follow; stay tuned.
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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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