Category: Financial Independence

Streams of Income

Brad

It’s been growing for many years with no signs of slowing. And no, I don’t mean your grandparents’ stockpile of useless stuff in the house.

The gig economy has grown considerably over the past 10 years. CNBC reports that “the share of gig workers at U.S. businesses swelled 15% since 2010”, a figure that only includes “1099-MISC contractors and short-term W-2 employees”. Uber drivers aren’t counted due to their classification as a different form of contractor.

Now, the term gig economy is rather large and undefined, which the article acknowledges. Personally, I like to think of it as anyone with a secondary (or more) form of income in addition to their waged or salaried job, or anyone who lives solely off of an income that is not tied to employment by someone (a boss) or something (a company).

Defining the term is less important. What is important, is the underlying concept: the primary and additional sources of income.

There are many reasons to seek additional sources of income, and I’ve written before about freedom of time. For those seeking new income streams, the reason may be to pay down debt, get ahead financially while working toward financial freedom, or the desire to simply work for oneself and ditch the W2.

Whatever the reason, the incredible growth in the number of those performing work to cultivate new income is unmistakable.

In the latest episode of Money Beyond Borders, Nick and I discuss salary dependence  and the desire to seek additional forms of income. In our view, it has never been more important, and it has never been a better time, to start something new for more $.

Give us a listen and let us know what you think!

Freedom of Time

Brad

The acquisition of money is universally important. From the necessities of food, clothing and shelter, to the luxuries of exotic vacations and nice cars, money is always required.

Some people are content with the basics, while others seek the lifestyles of the rich and famous.

What’s less talked about is one of the greatest benefits that money can offer…the gift of time.

Time is an ever-diminishing asset. It’s incredibly valuable, yet, you can’t increase its quantity.

Or can you?

No, I don’t mean immortality. I’m talking about owning more of your 24 hours.

You see, while money can be exchanged for a great number of things, it offers its largest returns in the form of time.

Have you ever wished you didn’t need to spend those extra weekends working, so that you could spend time camping with your kids? Maybe you want to travel the globe, invest more time in your volunteerism, or simply transition to work that you find more meaningful…to follow your passion.

Traditional Retirement

Most are familiar with this concept, but the message isn’t typically offered in the same context. “Retirement” is the standard pitch, and it is a noble one. Save and invest through 401(k)s and IRAs, use Social Security and Medicare to defray costs, and in your 60’s, you will (hopefully) begin to live off what you have accumulated.

This is a tried and true approach that has provided millions with comfort throughout their golden years.

However, there is another way.

Financial Independence, Retire Early (F.I.R.E.)

There is a growing movement known as FIRE, in which people save a considerable percentage (often well above 50%) of their income and invest their way to financial freedom. Once their portfolio of assets (oftentimes 30 times their yearly expenses, although it will vary person to person) reaches a certain figure, they consider themselves to be financially independent, and can retire from their day job.

They withdraw funds from savings at 3% or 4% each year, ideally living off interest and leaving the principal intact.

Some will retire and never work again, choosing to spend time pursuing hobbies. Others will find more meaningful work, start a non-profit, or open a new business.

Whether you seek to retire early or not is up to you.

Financial independence translates simply to freedom of choice. Deciding how to spend your time is wealth’s true reward.