I have been a writer for DINKs now for over 15 months, expanding on topics from real estate to prenups, letting some personal information slip through some pieces here and there but never fully exposing myself. In this post, the goal is to take you on my personal financial journey and what building 7 streams of passive income really looks like.
What Building 7 Streams Of Passive Income Really Looks Like
If you are reading articles from this site, then you have probably heard this phrase countless times but just to make sure it’s drilled in one more, all millionaires have at least 7 streams of income directly affecting their net worth positively. The point of having seven streams of income is that if one fails, you have six more that are bringing you income – A.K.A diversity. Millionaires want to stay millionaires, they are trying to maximize their returns while also realizing an appropriate level of risk.
When I first started my foray into the personal finance world, I was reading Rich Dad, Poor Dad for Teens by Robert Kiyosaki himself. He stated the 7 streams fact multiple times and as I went on to research more, this fact became quite obvious. Set up 7 streams of income and watch them increase your net worth. However, one point I would like to make that my end goal is to have 7 streams of passive income hence I wouldn’t have to be actively working to be making money from each stream.
The passive portion gets tricky. Especially because in the case of investing, whether real assets or in the markets, it takes money to make money. This is why I adjusted my goal to have 7 streams of passive income before I am 30 bringing in more than enough money for me to comfortably live off of.
Below is my list of current streams of income, whether they are actively requiring my time or just passive investments and also future investments I plan on partaking in when time and money permits.
Streams of Income
#1. My W-2 Job: Active
This one requires the most amount of time. I am a financial analyst for my 9-5 job.
#2. Freelance Writing: Active
I freelance write for a couple of sites during the week averaging about 4 articles a week. However, I hold DINKs near and dear to my heart as James and his team was the first to give me a shot at freelance writing and made it possible for me to write for other sites.
#3. Personal Blog: Active
My whole life I have been passionate about not only saving money but making money. I commuted to college to save money, majored in personal finance because selfishly I wanted to set myself up for success. Along the way though, I realized how many of even my closest friends were lacking the basic lessons of personal finance to help set their future selves up for success. Hence why I started the blog!
#4. Random Adhoc Gigs: Active
This one really can’t be summed up as anything other than rannnddomm. No seriously. From getting paid to model for a local clothing line, to helping photographers shoot weddings to tutoring kids. This one really just depends on what gigs I am seeing on craigslist and other gig sites. These are fun though and always keep me on my toes.
#5. Wholesaling: Active
Wholesaling is a strategy in real estate where you are actively trying to find deals off the market and bring these deals to buyers. You earn a fee from this depending on the price. This is a really great way to build up capital. I don’t plan on doing this forever (who really knows) but I enjoy it in the short term and it has allowed me to put more money into passive investments.
#6. 401k: Passive
Here we go, first passive stream! This is easy. Money gets funneled out of my paychecks from my 9-5 to my 401k. I max out my 401k every year and plan to as long as I am working a 9-5. This is a no brainer especially since this money works for me without me having to physically work.
#7. 4 unit multi-family: Basically Passive
About 1.5 years ago, my boyfriend and I purchased our first real estate investment in the form of an FHA loan on a 4-unit multi-family. We live in the smallest, most-dated unit and have been slowly chipping away at any renovations. Living in the smallest unit allows us to capitalize on the rents of the other units and we actually get paid quite a bit of money each month just to live here… pretty sweet deal if you ask me. You probably remember me talking about house-hacking in my other real estate articles but if you are willing to do this could build massive amounts of wealth quickly. We would like to do this a couple more times and also purchase other real estate deals but more on that later. This one is classified as basically passive because since we live here, we handle the property management but if we didn’t then it would be completely passive. Not to brag, but this doesn’t even factor in the MAJOR appreciation we have seen in just the 1.5 years of owning it (over $180k!).
#8. Roth IRA: Passive
I opened my Roth IRA when I got my first job as a host at a BBQ restaurant back in 2012. I was making money and eligible to put money away into savings. Sounds pretty crazy that a 16-year-old would do that but trust me, most 16-year-olds aren’t reading Rich Dad, Poor Dad for Teens so hopefully that puts it into perspective. My Roth IRA is another way for me to invest in the stock market however in a tax-advantaged method. I love watching my money grow without my even lifting a finger! :)
What The Future Holds
While the future is uncertain, there are definitely some things I am going to work my hardest to do. The first being of course, is to keep maxing out both my Roth IRA and 401k as they are my first two passive streams of income.
Additionally, I would really like to FHA house-hack a couple more times as well as save up larger sums to buy larger properties. When I say larger properties, I mean more units. The more units, the safer the investment in my opinion since if one tenant leaves you to have plenty of other rents coming in to pay the bills. I would count each of the different properties as different streams of income as well.
Lastly, by 30 I would like to get my own blog to a point where I can monetize it more heavily to hire out the writing and maintenance work so it also becomes much more passive.
I believe that all of this is do able with some good work and I have 5 years to get there and three out of the 7 passive streams of income so only four more to go!! I hope you liked learning more about what building 7 streams of passive income really looks like and if you have any targetted questions please don’t be afraid to reach out in the comments.
What do you think? How many passive streams of income would you like to have?
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