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OTHER ITA SITES:
A Roadmap To Your True Financial Independence - Part 1 - Generating A Passive Income For Yourself
Are you searching for a way to true financial independence for yourself and your family?
Aren't we all? ;)
Are you tired of being "trapped" in the "rat race", working day in and day out to earn a paycheck that just covers your immediate and short-term expenses?
Do you feel like you just aren't making any positive progress in this way towards your true financial independence?
Do you, therefore, believe that there *must* be a better way?
In these articles, I will share with you what we believe is this "better way" and provide you with a roadmap that you may customize to your situation and needs and use for yourself to achieve your true financial independence as soon as possible! :)
In a "nut shell", here is what we believe to be the simple roadmap, listed in order of importance, to your financial independence:
1) Build and grow a truly passive income stream!
2) Generate additional revenue with commercial-off-the-shelf (COTS) products (and/or others' services)
3) Use the money you earn from working, e.g. your "day job" and/or business(es), to further fuel your investments in and accelerate the returns on these investment from #1 and #2 above.
In this article, I will address Step #1, which is the one that we feel is the critical success factor and the most important "piece in the puzzle" to achieving and sustaining your true financial independence as soon as possible! :)
We believe that the "key" to true financial independence is to have a steady, and preferably growing, source of truly "passive income".
So ... What is a "passive income"?
A truly passive income is any source of income wherein you continue to make money without having to expend any further time or effort to maintain the source or level of this income.
You may probably already see that when you have a truly passive income that generates sufficient funds to cover your necessary monthly expenses then you are truly financially independent, since this means that you no longer have to perform any further work to earn the money you need to live on, right?! :)
So ... How do you get to a passive income that covers your expenses?
Well, like Robert T. Kiyosaki, author of the "Rich Dad, Poor Dad" books, T. Harv Ecker, author of "The Millionaire Mind", and so many other "guru's" will tell you, the key to a truly passive income is making Your Money Work hard for You! Rather than you working hard for your money! Right?
So ... How do you get your money working hard for you?
Well, firstly, you have to have some money that you can put to work for yourself, right?
And unless you are lucky enough to win the lottery or happen to inherit (or find ;)) a large sum of money, then the chances are that you will have to start with what you can afford out of what you currently have saved and/or from your earnings and grow it from there, right?
Then, there are many, many ways in which you may earn a passive income, from stocks and bonds, CD's, mutual funds, money market accounts, real estate, commodities, investing in businesses, etc. etc., right?
And each of these has their Pro's and their Con's relative to all of the rest.
Which of these is best for you and your particular needs and situation is somewhat beyond the scope of this article, and may be addressed in more detail in a future article, but herein the *point* we wish to have you take away with you is ...
Pick whichever passive income generation methods are best for you, start growing your passive income stream(s) and start getting your money working for you Today! Right?
Please see the resource box below for more information regarding the passive income generation method(s) which we prefer, use for ourselves, and therefore recommend.
And although I know that I just stated that we were not going to go into a detailed analysis and comparison of each of these passive income generation techniques, which we are not, here are a few of the factors that you may wish to consider and questions you may wish to answer for yourself in your selection of which of these are the best passive income generation methods for you, ok?
1) What are the true investment requirements?
What are the initial investment requirements? / How much money do you have to have to get started?
What if any recurring investment requirements are there?
2) What is the real net rate of return e.g. 1% a year, 10% a year, 1% a day, etc.?
How much passive income is this technique going to generate for you, each day / month / year, based on how much you invest in it?
Do these earnings compound upon themselves, and if so at what rate and frequency?
3) How accessible are the earnings generated?
Can you really access the money generated when you need it, e.g. to pay the mortgage and the monthly bills, etc. or do you have to wait and plan ahead to withdraw your earnings?
What do you have to do to access the earnings generated, and how easy to do is this for you?
4) How truly passive is it?
Do you have to constantly "watch the markets" and/or your investments to avoid losing money and/or your potential earnings in them?
Do these investments require some continuing level of effort to manage and/or maintain, e.g. real estate?
If so, then is this something you really want to do with your time in order to "guard" or maintain your investments?
5) How long will it take for this method to generate the passive income you need to cover your expenses such that you may achieve true financial independence?
Will this generate enough for you to live on in a matter of months or years or not until you are retirement age? This makes a Big Difference, doesn't it! ;)
Will this method generate barely enough for you to get by or will it continue to grow and provide you with added financial security?
6) What are the risks?
Could you lose your initial investment and/or your earnings if you aren't vigilant or careful?
Compare the risks to the potential rewards and decide if the risks are outweighed by the rewards and whether or not you are willing and able to take these risks.
Your answers to each of these questions relative to the passive income generation methods which you consider for your own financial independence strategy and plan should help you chose those that are right for you and your current needs and situation at the time, right?
Again, the objective is just to chose those that are best for you right now, and get started generating a passive income, Today! Right?
The sooner you start generating a passive income and getting your money working for you, the sooner and more likely you are to achieve true financial independence as soon as possible! :)
In Part 2 of this series of articles, we will explore the various ways in which you may generate additional revenue with commercial-off-the-shelf (COTS) products (and/or others' services) and how you may use the revenue generated from these sales to further fuel and grow your passive income stream(s).
And then, in Part 3, of this series of articles, we will explore how you may use the money you earn from working, e.g. your "day job" and/or business(es), to further fuel your investments in and accelerate the returns on these investment from both Step 1 and Step 2 above
I hope that you have found this article helpful and beneficial to you!
Please feel free to pass it along to your friends and family who may also be interested in achieving their own financial independence and whom may benefit from it.
To Your Financial Independence,
- Michael S. DeVries
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