If you have been following Passive Income to Retire, you must know by now that I am hoping to create enough passive income to retire in 2-3 years. By the time I turn 27, I hope to be retired. This takes a lot of work and planning. People typically work 40 years before they retire and to suggest that someone can do it in this time frame without cutting your living expenses significantly is difficult. In order to do this, I need to develop my passive income streams.
Current Passive Income Streams
In order to accomplish my early retirement plan, I hope to first leverage my time to build up online income first. This will give me extra income while I am still working at my day job. I am choosing to start with online income because there are no upfront costs. While I may have time to invest, I don’t have a lot of money, since I am so young. As a result, starting with online income is important. The other benefit with this idea is that I don’t need the income for another 2-3 years.
With extra income from blogging and other online business models, I will be able to invest it back into investments that will produce passive income streams. I am still not sure how I will prioritize these, but I know it will probably begin with more online ventures. I see these as a quick way to earn income. Quick meaning within a couple years.
Future Passive Income Streams
My future passive income streams that I hope to develop are more long term goals. I hope to invest in both dividend investments and real estate. I chose real estate because there are many tax breaks and it can be a true passive investment. It also means long term income security. While part of me worries about the longevity of earning income from online efforts, I know that people will always need a place to live. Investments that pay dividends can also be a great source of passive income, but they require upfront money (as do rental properties).
Since my wife and I will be able to live of her income alone, this means that I can use my income to generate more passive income streams. Any money that I earn from blogging in the next 2-3 years will go towards these three income streams. As I get closer to making close to my income from my day job, I will be able to have a clearer picture of a time frame for these other efforts.
Real estate and stock investments do take quite a bit of upfront cash. Knowing how much you will need in passive income is also an important part of the equation.
PITR,
Not to dampen your dreams, but retirement can be very expensive – and passive income streams often have large initial start-up costs, whether it is time or money.
I would enjoy seeing some calculations that show how you will retire at 27, as I am 26, and would love to hang up my hat in less then a year!
-EJ
Yes, I agree with you. However, with blogging I hope to build up a decent income. It’s not perfectly passive, but it will allow me to quit my day job. I plan to write up a detailed post about this in the future, but the short story is that with my wife still working, I can get a lot of the benefits (health care) relatively inexpensive. Plus, I’m not dependent on my income because of hers. But, I imagine I should be able to replace my income in the next few years with bloggin.
I love your plan and hope to read more about it!
Thanks. I’m happy to have you join me on this exciting journey
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Another thing to remember is the need for knowledge. Many times people want to come into a new industry and start up a company that would be profitable from day one; though they forget that even with the necessary capital one still needs the expertise to know exactly how into invest that capital. Starting a blog is a great way to get into the online world but one still needs to learn all of the aspects of content creation, publication, + advertise in order to turn that into a serious side income.
I hope that you have great success with your plan. Little by little those dollars made online can add up
Thanks for the well wishes. Yes, it definitely takes time to learn it all.
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I believe that owning and managing income properties yourself lf is more active rather than passive income.
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