Evaluate how many income streams you currently have. If it is one, that is fine. The goal is to understand if you are reliant on a single source.
Having control of your financial destiny with many income streams allows you freedom.
This topic hits hard since something recent at work. You need many income streams in your life. Period. Having many income streams is critical to your long term financial success. I recently had to displace an associate who was working for me. This was an extremely difficult thing to do. This decision wasn’t made by me, but rather the larger business. This got me to thinking, if I were to get displaced from work tomorrow, would I be okay?
What I Mean By Many Income Streams
Here is the simple way to think about it. Your 9-5 job is an income stream. Anything else that produces monthly cash into your pocket is an income stream. You can checkout this article I wrote in the past about different horizontal income streams I currently have.
If You Were Fired From Your Job Tomorrow, How Would You Make Ends Meet?
Have you ever thought about this? Most people don’t, but the recent experience I had started the wheels turning. The majority of people are reliant on one source of income. This source of income is typically their 9-5 day job. There is nothing wrong with this approach if you are employed and want to be employed the rest of your life. In this sense, you are exchanging your time for money.
Again, nothing wrong with this approach as long as you realize what you are signing up for. People with one income stream are dependent on staying employed. If you were to get displaced, you are putting yourself in a dangerous spot.
Nothing Is More Powerful Than Having Control Of Your Destiny
When you are dependent on one source of income, once that stops, your income stops. Let that sink in. When you are dependent on one source of income, once that stops, your income stops.
If there is one thing I have learned in the last year and a half, it is the importance of having many income streams. Over the past year and a half, I have been working hard to develop many income streams. The end goal for is to develop income streams from investments that become greater than my W2 income in the next 5 years.
Don’t forget @TheYoungRetireeBy33 3 Core Principles:
Second paycheck of the new year in the books and I invested almost 100% of my paycheck into retirement accounts! This continues along with the strategy of front loading my investments at the beginning of the year. Being able to invest almost 100% of my paycheck into retirement accounts will allow me to max out my retirement accounts by the end of February. Let’s take a look at where my money went.
Breakdown of Second Paycheck
The total amount for my second paycheck of the year was $6,538. Of that, here is the breakdown
Living Money: $352
What My Strategy Is
I have worked hard to document my strategy for this year. To read the full article of how and why I am planning to front load the year, you can click the link above.
The goal remains to max out my retirement accounts by the end of next month. This will then dramatically increase my paycheck for the rest of the year and allow me to invest more aggressively.
Don’t Forget To Automate
One of the keys to my strategy is automation. What do I mean by automation? Here are two ways I automate my investments each month.
First, I set up automatic deposits for my 401k and HSA contributions. For me, I set this up through benefits with my employer. We have a landing page I can go to and can update the percentage of my check to contribute to each of these accounts. I do this for one reason and one reason only. When automating this way, I no longer see that money in my bank account. This money will go directly to my retirement accounts and I don’t have to do anything on my end.
Second, I set up automatic investments every week in my Vanguard account. This money is transferred on pay day as well so I end up temporarily seeing the money in my account. Again, the goal is to automate things so I have less things on my end that I need to do.
Executing this strategy allows me to live paycheck to paycheck in an effective manner. The less money I see in my bank account, the less money I will end up spending.
- Front loading your retirement accounts is one of many strategies you can utilize for saving
- Don’t forget to automate your investment strategy. The less you see in your bank account, the easier it will be.
- The cool thing about front loading is what my paychecks will look like after my retirement accounts are maxed out!
Don’t forget @TheYoungRetireeBy33’s 3 Core Principles:
Too often, people get stuck in the fixed mindset. It is important to begin asking yourself ‘How can I afford it?’ The most common feedback people have is telling themselves they can’t afford it. This mindset is fundamentally true if you tell yourself it. Begin reframing your mind to ask the question ‘How Can I Afford It?’ instead. This fundamental shift in mindset is transformational.
$13.70 Per Day Costs You $5,000 Per Year
I continue seeing more and more posts from people about the importance of not spending money on coffee. The importance of not spending money going out to eat for lunch or other things daily. A common thing people share is the ‘Want to learn how to blow $5k a year? Spend $13.70 on lunch every day!’
Does $13.70 per day equate to $5,000 per year? Yeah, the math checks out. Now, let’s look at this problem from a different perspective. What if I asked you, hey, how can we make an additional $5,000 in income a year? Well, you need to make $13.70 per day for 365 days. That will equate to $5,000 of additional income in a year.
A very simple refrain in the question makes you think in a completely different way.
Ways To Make $13.70 Per Day
There are many side hustles you can take on that would earn you $13.70 per day. Here are a few side hustles you can do:
Flip items from facebook marketplace that people are giving away for free. Make sure to equate gas and car mileage in this. Typically it “costs” $0.50 per mile driven in gas, maintenance, etc.
Deliver food on Uber of Lyft
Drive passengers for Uber or Lyft
Rent out your spare bedroom on Airbnb – house hacking at its finest, find out how I house hack at this link!
Sell crap you have accumulated in your home that you don’t need
These are just a few of the side hustles you could pick up to make some extra cash.
How Investments Can Pay For Things
Think of it in this way. Let’s say you wanted a new car because the car you have is about dead and at this point it is a need in your life. Okay, cool. Let’s follow this mindset.
Ask yourself, ‘How can I afford a new car?’. The first thing that is important to note is you don’t need a new car. You need a used car that is as good as new. Let’s say a new car would cost you $220 a month in payments for a certain amount of time. Cool.
Ask a more specific question now. ‘How can I afford $200 per month for a car payment?’. I will use one solution for this example. Let’s say you live by yourself or have an extra room in your home. How about renting it out for a few nights a month on Airbnb? Depending on your area/market, you could rent the room out for $30-50 per night. This would take you 5-6 nights per month to rent out to pay for your car.
Just like that, you can now afford a new car by asking yourself one simple question and solving the problem!
So What’s The Point?
The point is simple. Stop saying you can’t afford things in your life. Ask how you can afford them. Be creative with your thought process and how to solve the problem. There are many ways to make more money in this world. We live in a day and age of incredible technology.
The power of your cell phone has enabled hundreds of thousands of people to make a better life for themselves. Begin to reframe the question in your mind. It is simple, yet powerful.
Start asking yourself how you can afford something versus saying you can’t afford it
Understand there are hundreds of ways to make extra income. Figure out what could work well for your life situation.
Use technology to your advantage! We live in an incredible age where we have so much power in the palm of our hand.
Don’t forget @TheYoungRetireeBy33’s 3 Core Principles: