The Passive Income Portfolio
The Goal: $50,000/yr. in Passive Income
The ultimate goal of my financial existence is to build up a passive income portfolio that generates $50,000+ per year of income. I accomplish this by building up my active income, then investing that money into various sources of ideas that can generate money even while I am not working.
What is the definition of passive income? I define passive income as income that I earn as a result of systems that are self-sustaining and products that sell regardless of my active efforts.
Quite often, passive income sources take quite a while to develop and establish. Some examples of passive income might be: products that sell via an automated online mechanism, stocks that pay dividends, real estate rental income, etc.
While passive income is the ‘long game’, it is the only way to achieving true Financial Freedom.
As Buffett famously said:
“If you don’t find a way to make money while you sleep, you will work until you die.”
Why is Passive Income so Important?
Passive Income is important because through passive income we achieve Financial Freedom. Through Financial Freedom, we achieve Time Freedom, which is the ability to do what we want, when we want.
Time and Financial Freedom doesn’t mean you need to spend the rest of your days lounging on a beach in the middle of the Caribbean. The type of freedom for which I seek is the freedom to live a more involved and passionate life, while not worrying about where the next paycheck will be coming from.
A well-established Passive Income portfolio will allow you to maintain a lifestyle where if you want to work, you work; if you don’t, you don’t. When you have this type of mindset, you are not tied to a job, a boss, a paycheck, or any situation. In essence, you are Financially Free.
I have found that the best way to keep me motivated towards the end dream of being Financially Free is to have a purpose for the goal. My personal reasons for wanting to be Financially Free:
- Never being tied into one income source or one particular employer.
- More time spent with family and friends.
- More time for pursuits of non-money passions – i.e. basketball coaching, volunteering, etc.
Building Towards Passive Income
My passive income journey goal is to build my way to sources that generate $50,000 in passive income per year. It is the long game, but through these various sources, I am on course to achieve my dreams.
Current Passive Income Sources:
- Interest Income