We’ve heard it time and time again, put your money into a 401K or an IRA to take out when you retire. This is all good and well until we start to break down the logistics of it. Thinking about being financially free and what age you want to retire at will play an important role in what you do with your money. The benefits of passive income can greatly aid you in living the life you want to live and have flexibility with not only your money but your time.
WHY PASSIVE INCOME IS IMPORTANT TO RETIREMENT
When looking to build your passive income and the strategies you may use, it’s important to first have the right people on your side. Find a like-minded community that can support you so you don’t fall back into your old ways of financial planning. Surrounding yourself with those who are also done with the traditional ways of retirement can also help you network and gain additional insights. In our most recent Entrepods episode with Russ Morgan, we told us that we should ask ourselves the following:
“Will I be successful based on my personality and am I passionate enough to get involved in it?” - Russ Morgan
Although we've been trained to give our money away to an account we can’t access until we reach a certain age, there are ways to break these old habits. After all, it won’t matter how much we make if we continue to give it away and not have it in our control. Finding passive income assets will look different for everyone. You need to be able to calculate your monthly expenses and have your passive income exceed that. Though this will take work to build up, once you reach that goal of having it be greater than your bills, you will become financially free.
For example, IRAs and 401ks have a set date on when we are allowed to withdraw money, and this puts us in direct conflict with what we want. How is it going to help you be financially free if you cannot access the money until a certain time anyways?
“Sometimes as entrepreneurs, we’re such great achievers, we charge after everything, and unfortunately we allow the things we love the most and the people we love the most to be run over in the process” - Russ Morgan
INVESTING IS YOUR SUPERPOWER
In our Entrepods episode, Russ told us that we’re buying time and that is what our investments are best for. He explained that if you have assets that produce your goal in savings and are greater than your monthly income, then you have an infinite amount of time to enjoy the things you want and the age at which you can retire. If you are constantly working to pay off your bills, you are not financially free. Although being “expense-free” doesn’t truly exist, having passive income can greatly assist you.
“Wealth is nothing more than the goods and services we can acquire” - Russ Morgan
When investing, you have to be okay with making that investment that allows you to grow and expand. Anything that helps you grow and expand your company or passive income strategy to make it more efficient is something that you need to be willing to put the effort into. Even if it’s as simple as new software. The best investment we can make is within ourselves.
As you start learning more about investing for beginners, you will learn the true importance of passive income and the contributions it can make in your life. Find opportunities that will pay your mortgage for you so that even if you get laid off from your job, you still have the means to take care of your house and free up your finances. Investing is one of the best ways to build income and give you peace of mind.