Financial security and passive income can very well go hand in hand, the more sources of passive income you can create, the more financial security you will have. Do you...
Have you thought about what could be a good goal for 2016 yet?
You remember where every huge progress starts right?
Yes, that is correct, it starts with a dream.
Where do you want to be in 5 years from now?
What do you want to do?
What kind of lifestyle do you want to have?
Who do you want to spend your time with?
Is your time valuable to you?
It should be, we don´t have a lot of it. Doesn´t it sound fair to spend time on your terms since our time here on earth is really limited?
Ok, so what would be a dream come true in 5 years?
It doesn´t matter if it involves climbing Mount Everest, running a marathon, losing 60 kilos of overweight, getting out of 200k € in debt or becoming financially independent. The HOW can first present itself when you have the WHY. That’s why you have to start with the end in mind, you have to know where you are going before you start your journey.
So I will ask you again, If anything is possible, where do you want to be in 5 years, how do you want to live, how do you want to spend your time?
Now when we have the WHY, it´s time to figure out the HOW.
First we need to set up some goal along the way so we can know if we are on the right track and have something to aim at short term.
If your dream is related to time, having more time with your family or the freedom to spend time on your terms, it is most likely related to money as well. Most of us exchange our time for money, hence the term Time is money. So if your dream is to have 2 extra days off from work a week to spend with your family (or maybe on the golf course), then we have to figure out how much that would cost.
To make this easier let’s say that you have a 2000€ after tax salary working 20 days a month, that makes a 100€ per day income. If you want the 2 days of a week, that equals 8 days in a month and to be free those eight days you need to fill in the lost income. What you need is 100€ per day times 8 days, 800€ of passive income a month will make you free as a bird 2 extra days a week. Now 800€ might seem like a lot of money, but remember you have 5 years to get there. And so now we just scale it down, to have 800€ of monthly passive income in 5 years how much do we then need in 4 years, 600€ maybe. In 3 years we need 420€, in 2 years we need 250€ and in one year we need 100€ of monthly passive income.
Does that seem like something crazy, undoable and astronomical?
To in one full year create a 100€ small passive income a month, I think you can do it.
Now this works the same if your dream is to have a slim body and better health in 5 years. If you want to lose 60 kilos start counting backwards. Maybe you need to lose 8 kilos in the last year, so then the 4th year you lose 10 kilos, the 3rd year you lose 12 kilos, the 2nd year you lose 14 kilos and the first year you lose 16 kilos. With losing weight it´s easier in the beginning, because there is usually a lot more to take from in the first year than in the fifth year.
Ok, so now we figured out the dream and the road to go there with goals along the way, now we need to figure out another HOW, HOW do we reach the goal of next year?
If we need to lose 16 kilos in a year, we need to put in some effort, right?
Maybe read some books about health, start exercising, get a personal trainer (or a coach that has done what you´re about to do), maybe take some course on diets and nutrition, get rid of all the bad habits and start working on losing one kilo every three weeks.
The process is similar if you want that extra 100€ of passive income.
Maybe you need to pick up some books to give you some more knowledge about it. Maybe you get a coach that has already done it, go to some seminars, get rid of some bad spending habits, learn to do a budget and start working on making that first 10€ of passive income.
The most important thing is to make a commitment to do it, and then start immediately.
If you´ve ever been to a gym for a full year you know that January is by far the most crowded month, because of all the new year resolutions of starting to exercise, lose weight etc.
What happens is that people start losing their vision of that beautiful beach body already after a month, why is that?
The answer it that they weren´t committed to doing it, when things started picking up at work after the Christmas holidays they just didn´t have the power to go to the gym after that hard long day at work. And so it begins, you skip it one day, and then another then you just loose it, bye gym and bye New Year resolution, See you again next year.
How to make a commitment then?
By making a plan with the goals clearly written down and clear vision of your dream, in pictures and text. If you want to have a nice beach body for the summer, put up a picture of the kind of body that you would like on the fridge or bathroom mirror. If you want to spend more time with your family, put up a picture of you all together on a normal weekday doing some funny things. If you want a Lamborghini, put up pictures of that. Write down what it is that you really want and remind yourself of that every day. It doesn´t cost anything, it doesn´t take a lot of time but it makes all the difference. That shows commitment, which shows that you really want whatever it is that you wrote down and put up pictures of.
Once you start and really try to figure out how to get that small passive income of 100€, ideas will come to you. You will get more and more creative. Your mind will work and figure out ways that you can´t even imagine right now.
Just keep in mind that nothing comes for free, you have to put in some effort. The best thing to do is to seek information in books, webinars, blogs, and talk to people who have done what you want to do and maybe get some guidance. Doing something every day to get you closer to your goal will keep you on track, whatever it is that you want to achieve.
I know that 2016 will be an awesome year!
But as I have written before, everything is about attitude and priority, you choose what you want to do.
Happy New year everybody, i wish you all the best!
Passive income together