Picture living off of passive income. You wake up in the morning, Starbucks paid, meals paid, rent paid and so on. You can enjoy life without earned income – a full time job. The goal of my blog is to get you to this place. Often we hear advice, over the radio, from professionals to invest for retirement. Save for the long-term. Scaring us into thinking we are going to run out of money. With this mindset we picture someone being 60+ with various investments to last their remaining years. I don’t want to wait until 60 to enjoy life and travel. How about you? Start to think of ways you can retire today. How much will you need for daily expenses, how can you generate enough income to live on?
The goal is to pay for essentials with passive income so you no longer have to work. Then, you will be able to focus on your new full time gig of being a world traveler. Try playing this game, see how much passive income you will need to get through an entire day, without having to pay for expenses with earned income. If you can do this then try to make it a whole week, then a month, then a year.
Grow the percentage of passive income that you spend over time. Start out by spending less passive income and gradually you will accumulate increased streams. Then you can spend more of it until it is covering your expenses while growing at the same time. The goal is to let passive income auto-generate faster than you can spend it.
How can I live off of passive income if dividends are only paid quarterly? Beak up your investments so that dividends or other passive income streams are paid monthly. Have a portion invested in REITs (Real Estate Investment Trusts), Vanguard funds, rental properties and so on. Break up the payouts so you don’t have to wait an entire quarter.
Skip meals and use that money for investments. Would you rather splurge on Burger King, on unhealthy food or just skip the meal altogether and deposit it directly into your brokerage? You don’t have to do this all the time but once in a while try to save a little extra cash without interrupting your lifestyle. That single meal could pay you back for the rest of your life with dividends and investment appreciation. Plus, skipping Burger King can’t hurt. Your waistline will thank you.
Here are some monthly dividend candidates: SUNS SOLAR SR CAP LTD COM, dividend yield of 8.71%, O REALTY INCOME CORP COM dividend yield of 3.85%. Diversify so that you are getting paid with different income streams at different points in the year. Invest in a variety of ETFs, REITs, and rental properties so money is auto-generating to support your lifestyle. Granted this will take hard work and you will have to invest more than you spend but what are the other options, wait until 60?