Passive Income – Your Ticket to Financial Independence Achieving financial independence simply means being able to sustain a certain standard of living without having to work again. That certain standard of living varies from person to person. You can use as a benchmark your current standard of living, or settle for something lower. To break this down further, imagine for a moment that you lost your job and cannot get another one for the next 12 months. What standard of living would you maintain? Would you maintain your current standard of living or settle for something lower? That is a personal choice. Most people would opt for a lower standard of living – cut back on annual vacations, cheaper cable bouquet, tap or boiled water instead of bottled water etc. The how is not really the issue, but coming up with an amount you are comfortable with. This number is often referred to as the financial independence number (FIN) – the magic number you attain to deem yourself to have achieved financial independence. Whatever the number, you need to start building up your passive income portfolio by putting your savings to work. One of your financial goals should be your planned passive income. How much passive income you want to end by December? How much do you need to save and invest to make it happen? Which money market vehicle will take you there faster? What options do you have (both onshore and offshore) and which one works best in the context of your financial goal. When you have a goal and a plan, you find it easier to focus. When you save first before spending, and invest your savings in your passive income portfolio every month, you grow your passive income cash flow every month. This means your passive income increases every month. If you have a plan that aligns with your financial goals, and work that plan every month, you are well on your way to meeting your financial goals and ultimately achieving financial independence.
Posted on: Mon, 26 Aug 2013 07:11:21 +0000
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