I was on the wrong track. Work was consuming all of my waking hours, and my house was a time and money sink hole. I was angry and frustrated. I wanted out
I looked at my most recent bank statement. Last month I had earned $0.06 in interest. 6 cents?! I was doomed!
I had a mortgage and a student loan. Most of my savings was locked up in my 401k or home equity, and the value of the latter was highly questionable
I needed some passive income. Who wants to continue trading hours for dollars, when money can magically appear in your bank account while you sleep? The late night infomercials promised over night success
Of course like most good magicians, behind the illusion is years of hard work, dedication, and practice. It is one thing to understand how to earn income while you lounge on the beach, and another to make it happen
But if you are diligent and overcome the challenges, one can go from being burdened by debt to having assets that earn more than your cost of living in a relatively short period of time.
There are many different ways to generate passive income. We can learn a lot from people that are already successful.
- Jason Fieber of Dividend Mantra is building a nest egg of dividend growth stocks
- Paula Pant of Afford Anything is building a real estate empire, one house at a time.
- Jacob Lund Fisker created a stock portfolio, built a successful website to help others retire early, and wrote a book.
- J. Money has a successful website helping others increase income through side hustles
- A good friend of ours earns $1,000’s a year from his photo portfolio
While each of these examples can be a great boost, at the same time, standing at the bottom of the mountain it can look impossible to reach the summit.
This is where it helps to have passive income milestones
First, I had to pay off my student loan. $0.06 in the bank account wasn’t even a start if I was paying $100’s in interest each month.
Little by little the savings grew
I paid off the student loan. I sold the house and moved into a small apartment. I started riding my bike more
I was earning $1 a month in my savings account
Dividends now paid for the monthly cost of Internet Service, and then all of my utilities
Interest and dividends now covered the cost of rent. I would never be homeless
Investment income was now earning the equivalent of minimum wage, then $5.15/hour. Never would I have to work at Wal-mart
And then it happened. About 7 years after setting the goal, our assets were enough to support our cost of living. 3 years later, I quit my job
It wasn’t all easy, there were mistakes and losses along the way, but being able to look at the milestones kept us motivated and kept things in perspective
What is your next Passive Income Milestone?