Not too long ago, I quit Corporate America, sold my condo, and moved across the country. In that order. No job lined up. Not a single client on the horizon.
I tried leaving the 9-5 grind 3 times. The first time was ugly and messy. Second time was little better. Then, third time was the charm.
In my mid-30s, I reached financial independence retire early (FIRE) by creating multiple income streams from investments and side hustles.
7 Things You Must Do Before You Resign
I was finally able to leave a career that was no longer a fit. More importantly, it was time to get away from East Coast winters!
I gave everything away and left all my furniture. It was the third time quitting a career without a Plan B.
While I'm not recommending resigning without a Plan B, I do suggest having a “fluid” roadmap. I had a rough plan in the back of my mind so that I had some sort of direction.
Financial Independence Retire Early (FIRE)
What's the best way to make passive income?
For years, I tried different passive income ideas and strategies. Eventually, I reached financial independence retire early (FIRE) by replacing my corporate salary with passive income.
Here's one thing I learned: The best passive income strategy for you is one aligned with your strengths and interests.
Ready to create passive income too?
Find out which passive income idea best suits your personality!
Interested in creating passive income through index fund investing?
You probably already know that the path to financial wealth is to have your money work for you. Investing in index funds allows your money to compound over time so that you can earn money while you sleep.
Not interested in stock picking and day trading? Want to sleep soundly at night despite the volatility of the markets? Me too.
Here’s how I minimize risks:
Diversify across different asset classes
Diversify within asset classes
Diversify across markets, countries and currencies
Diversify across time
What does it mean to be diversified across time?
I’m talking at least a ten year long term investment strategy. No jumping in and out of the market.
Even the top financial gurus are not able to predict the right time to buy stocks. By adding to my index fund portfolio systematically over months and years, I reduce my risk and increase returns over time.
Video: How I Created Passive Income Investing in Index Funds
Get clear on your short-term financial goals.
What are your short-term goals (5-10 years)? Specifically, what’s your planned timeline to re-enter the workforce? Do you plan to buy a home in which you would need more liquidity in assets for that down payment?
Have a rough idea of your long-term financial goals.
It’s hard to plan so far out in advance. Anything can happen in the next few months. But it’s still important to have a rough idea of your long-term financial goals in order to have a foundation for your future.
What are your long-term goals (10 plus years)? Do you see yourself staying in the same industry? Same city? Starting a family?
Find out which passive income idea best suits your personality.
Build beyond an emergency fund.
Remember, it’s not just about having all kinds of (sometimes unnecessary) insurance in case the worse case scenario happens.
At the very least, have a 6-9 month emergency fund to cover basic living expenses.
Next, see if you can take it a step further.
Get creative with ideas in this gig economy.
There are many ways to build passive and active income streams. The gig economy centers around the concept of creating an income from short-term tasks.
This encompasses those who are full-time independent contractors to those who moonlight by driving for Uber or Lyft several hours a week.
Are there any part-time opportunities that you may consider taking on in order to explore a different industry? Any fun side hustles you’ve been thinking about trying?
Let's get your financial ducks in a row....