Have you ever felt totally in control of your life? Have you ever felt that you can handle any and every problem that comes your way?
That’s how I feel nowadays. But it wasn’t always like this. Less than five years ago, the world told me what to do, and I followed. The world bullied me.
It wasn’t until I discovered the magic of passive income that I took control of my life. Going even deeper, my favorite type of passive income is income investing.
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What is income investing? Income investing is the art of purchasing high-yield products to give you money today. It’s a form of investing that focuses on getting cash into your pocket as soon as possible.
I became an income investor because I needed help funding my daily activities. Life is full of surprises, but you can solve most with cash flow.
But how can you generate enough income to supplement your earned income (job)? The key to a successful life is having money and time.
Working a second job or starting a side business can generate income at the expense of your time. That’s why income investing is vital to your rich life.
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With income investing, you can create additional income streams that keep growing without investing your time. My wife and I receive $1,500/month in dividends no matter what we do throughout the month.
Income investing for the win. So, how do you get started as an income investor? The key is taking complete control of your household budget.
Income investing can’t help you if you don’t know your income and expenses. By taking full accountability for your budget, you can adjust your lifestyle towards creating passive income.
You’ll need a large pool of money to generate meaningful returns from income investing. For example, you can create $10,000/year by investing $100,000.
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But how do you save and invest $100,000? It comes down to your resolve and how much you are willing to sacrifice.
Living below your means. If you come from an average family, you don’t have a large stockpile of money waiting for you.
Instead, you will have to save money by trimming your budget, getting roommates, working overtime, or getting a second job.
My wife and I started with debt ($77,000). Over the last four years, we paid off our debts and accumulated close to $300,000 in investments.
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We did this by living below our means and getting roommates. We kept a tight handle on our expenses and ensured we didn’t let anything break our momentum.
Now, we are on the other side of our hard work. We are enjoying our dividends as we dreamed. In fact, I am writing this article from the heart of Istanbul, Turkey.
Income investing products. I have six types of income investing products, although there are more. You can allocate your portfolio to match your risk tolerance.
- Closed-end funds are securities that mostly use leverage to generate outsized returns.
- Preferred shares are stocks where you can find fantastic deals. They resemble fixed-income assets such as bonds.
- Business development companies invest in small and medium-sized companies and pay you a high yield.
- Mortgage REITs invest in mortgages such as mortgage-backed securities. They can be tricky because timing is everything.
- Dividend ETFs are a simple way to invest in tons of dividend-paying companies. You’ll receive dividends and capital appreciation by investing in dividend ETFs.
- High-Yield Blue-Chip companies like AT&T (T) and Verizon (VZ) pay large dividends but don’t grow much.
As you learn the various types of income-investing products, you’ll start to see how they correlate to interest rates.
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Interest rates determine everything. Interest rates control the economy and, therefore, your investing goals. The Federal Reserve controls interest rates, so you must understand how the economy maneuvers as rates adjust up and down.
Your power as an income investor comes from understanding interest rates and making moves that others would deem crazy.
For example, mortgage REITs are struggling in this high-interest-rate environment. This means their stock price is down, and their dividend yield is up.
Most people wouldn’t want to invest until their stock price recovers. This gives people a sense of security. However, we are income investors. We invest for income.
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Therefore, we can purchase mortgage REITs that yield 12-15%. When interest rates begin to fall, the price of mortgage REIT will increase—which lowers the dividend yield.
Changing your life. Learning the types of income investing products is fine and dandy, but first, you must create a goal.
With a goal, plan, or dream, investing is easier. I aimed to generate enough money to travel and entertain my family.
Five years ago, I couldn’t afford to take my family to Applebee’s without using my credit card. I didn’t understand how so many people could afford to eat out.
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Surprise! They can’t afford it. However, I can because I have $1,500 of free money coming in every month.
What is your rich life? What do you want to do for you or your family? Do you want fancy vacations, nice cars, or expensive jewelry?
Maybe you simply don’t want to worry about paying bills. You want to have $500 in your account at the end of the month.
Whatever your dreams, income investing can get you there. Ensure you document your goals by creating a vision board.
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Conclusion. I write about my dreams; that’s how I stay on track to keep moving toward them. I always dreamed of being a great provider for my family.
Income investing gets me there because my income grows every month. I reinvest a small portion of my dividends to ensure my pot of money gets larger.
Are you ready for a change of scenery? Do you want to go to a restaurant and not look at the prices? You can get there by income investing.
However, there are speed bumps and potholes on the path to wealth. It’s tough to go against society and live below your means.
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If you can focus on your budget and investments for 3-5 years, you’ll come out a different person on the other side.
Are you prepared to make the change? It feels good to look at my $50,000 brokerage accounts. My checking accounts have cash on the last day of the month.
Not many people can go down the road toward passive income and income investing. I am confident that things are much better on this side.
Income investing will give you the confidence to navigate this world. It can allow your children to follow their passions. Income investing for the win!
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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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