To escape the spending trap, you need to understand that income is not long-term wealth. What is wealth? Income is obviously a component of wealth, but wealth can have varying definitions. Many people see wealth as their total net worth at any given time. This can be paralleled to the assessment of an individual’s balance sheet. Wealth can be referred to as the part of your balance sheet that is considered equity. Your ​assets minus liabilities. The wealth you have after liquidating.

Fall In Love With Financial Freedom


In hindsight, it's obvious there have been better times to invest than others. But since no one knows what the future holds, you can't know when that will be in the future. Plan to invest no matter what the market is doing. If you're investing periodically, you'll be dollar cost averaging into the market, which will minimize the risk you're taking should the market decline.

20. Etsy – If you like to create arts and crafts, you can sell them on Etsy.It’s completely free to open an Etsy store. You simply sign up, post pictures of your creations and starting selling. You can choose your payment option, but PayPal is generally the easiest. Etsy makes it easy to sell and keep track of your inventory. There is a small listing fee and they take 3.5% of every sale you make.


It can take time to build up your personal freelance business. Yet, there is more demand than ever for freelancers. So, if you want to kick start making money online through freelancing you can join one of the top freelance networks, such as Flexjobs, SolidGigs, Contena, Upwork, Fiverr, or PeoplePerHour. Sign up, build your profile, upload some samples of your work and start making extra money by doing small freelance jobs.
No problem and good luck. His book is what started my quest for early retirement – although the investment advice is a bit dated. Another couple who are in the same camp are Billy and Akaisha Kaderli. Again, these are sort of the grandparents of the movement. Although in their 60’s now, they retired at 38 with $500k or so. They also spend a large portion of their time overseas – mostly southeast Asia. Both the Terhorsts and Kaderlis focus on expense management to achieve a full life of travel and fun. The Kaderlis have also written several books avaiable on their website – unfortunately, not for free. They tend to do more interviews so they would be a podcast option too.

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The middle class encompasses individuals whose financial situation falls in between those of the upper and lower classes. Generally, the population of America associates themselves as middle class. Lifestyle is a means for which individuals or families decide what to consume with their money and their way of living. The middle class places a greater emphasis on income: unlike the upper class, the middle class measures success and potential in the form of money rather than influence and power. The middle class views wealth as something for emergencies and it is seen as more of a cushion. This class comprises people that were raised with families that typically owned their own home, planned ahead and stressed the importance of education and achievement. They earn a significant amount of income and also have significant amounts of consumption. However, there is very limited savings (deferred consumption) or investments, besides retirement pensions and home ownership. They have been socialized to accumulate wealth through structured, institutionalized arrangements. Without this set structure, asset accumulation would likely not occur.[36]
Clearly, there's a lot of demand on Amazon, and if any product is going to sell, it's going to sell well on Amazon. But the goal here is to source the right products that will easily sell at the world's largest online retailer. Generally, products between $10 and $50 sell very well here. Just be sure to do the right market research before jumping on this bandwagon.
If you’ve got a way with words and expertise in a niche, there are plenty of sites that will pay for articles and content you write. Think of the sites you read regularly. What can you contribute to them that would be interesting? Research your niche and then look for ways to pitch articles. Many sites will simply have a submission or contact link in the footer. To get started, check out my full guide to becoming a freelance writer on the side and then submit your articles to places like Instash, Listverse, TopTenz, A List Apart, International Living, FundsforWriters, and Textbroker.
Passive income differs from active income which is defined as any earned income including all the taxable income and wages the earner get from working. Linear active income refers to one constantly needed to stay active to maintain the stream of income, and once an individual chooses to stop working the income will also stop, examples of active income include wages, self-employment income, material participation in an s corp, or a partnership.[4] portfolio income is derived from investments and includes capital gains, interest, dividends, and royalties.[5]

How much is financial independence


You know those top-down cooking or craft videos you just can’t seem to get away from these days? There are people out there making a living from them. 78% of B2C companies depend on user-generated content, like those videos, for their marketing campaigns. You can sign up as a creator on a site like Darby Smart and potentially work with brands like Nordstrom, Mattel, and BarkBox. Or, learn how to master PPC advertising and you can use the content to build your YouTube following and monetize through ads and views.
Open Yale Courses echoes Harvard Extension and Stanford Online, in that it offers only courses from Yale. While the site is similarly limited to topics taught at the school, Open Yale Courses offers a lot of videos of actual campus lectures. The availability of videos makes the site a great option if you’re looking for quality courses, but learn better by watching than by reading.
Cash Cow Couple is a financial website that does not offer any personalized financial advice or advocate the purchase or sale of any security or investment for any specific individual. Cash Cow Couple has advertising relationships with some of the companies mentioned on this website and attempts to take a reasonable and good faith approach to maintaining objective recommendations that are in the best interest of readers. Cash Cow Couple strives to keep all content accurate and up to date, but the financial information on Cash Cow Couple could be different from what you find when visiting a third-party financial institution, service provider or specific product’s website. All recommendations are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions and discuss any and all opportunities with an advisor, accountant or attorney who is familiar with your specific situation prior to implementation. Please be aware that investment markets have inherent risks, and past performance does not assure future results. For more information, please read our full disclaimer.
Even though I passed the point where my savings could cover my essential expenses quite a while ago, I’ve decided to keep working and pad my balances a bit more. Since I’ll likely have plenty of buffer by the time I actually pull the plug on work, I plan to just maintain my current portfolio, which consists primarily of low-cost, stock market index funds. Since I could always work again if necessary, I’m happy to take on a bit more risk for higher potential returns.
I did read the Harry Browne book you suggested. Took some time to finish. Very interesting ideas, though several of the concepts were a bit much for me. Though from the author’s comments to the newer edition, he has changed some of his ideas as well – such as his ideas on marriage. Anyway, it certainly made me think and stretch my perceptions. Any new podcasts in the works?
Thank you for the article, jlcollinsnh. I’ve always been a firm believer of making smart decisions in purchasing property, however, after doing further reading I am beginning to believe in renting instead of owning. The flexibility would be prized, but I believe the fixed cost is the best aspect. Planning my expenses for the future is troublesome at times, but this change would take out a large variable.
Agree though it all depends how one defines “best”. I put Madison, WI as one of the best places to live in the US and so do many others. Sure it’s small and not on a coast, but it’s one of the top biking cities in the US. It’s consistently ranked near the top for livability, surrounded by 4 lakes that are used year-round, home to a great public University and has a good tech scene with Epic Systems (EMR leader) and a nationally ranked accelerator, gener8tor. Plus it’s in America’s Heartland! The winters can get rough, but considering the median home price is only $220K it doesn’t take much to live large. Just light one of the fireplaces! 

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21. Facebook – Facebook swap shops are great for selling things locally. It’s like CraigsList, but a little easier. You simply search for swap shops in your area and ask to join the group. Once you’re in, take a picture of the item, write a quick description with the price and post it. It doesn’t get much easier than that. You can generally expect to get about what you would get at a yard sale, maybe a little more.
If you love to travel and find yourself randomly searching for airfare sales or browsing Lonely Planet, why not carve out a niche for yourself as a private travel agent? My friend, Mark Jackson did just that, making extra money online with his travel consulting side business. Start with word of mouth recommendations from friends who know they can count on you for the cheapest flights, and then move on and create a Facebook or LinkedIn group to invite people who want to stay on top of the latest deals. Eventually you could spin this into a full-time consultancy teaching people how to make their dream trip a reality.
There are loads of resources for making money online as an affiliate. You could source products from ClickBank, Commission Junction, Rakuten Marketing, Share-a-Sale, Impact Radius and many others. Plus, many of the larger companies have their own affiliate programs as well. Do your due diligence and find the right company with a relevant product or service to your audience that you can sell as an affiliate.
I will admit, I’m not a huge fan of fancy budget spreadsheets, so I just use free tracking apps like Personal Capital. Then once a month I used the data and wrote down every bill and loan I had with the numbers next to them (some obviously varied slightly from month to month) along with every time I spent money on going out, food, clothes, etc. You’d be surprised at the things you catch that has affected your spending over the last year. Slight tweaks and adjustments can make all the difference in the amount you save. This was how I was able to identify how much money interest my student and car loans were accumulating and then identified it was critical for me to start paying them down rapidly.

When most people get a raise or have extra money, we look to buy things that are not going to add much to our overall wealth. Money goes to new fancy cars, boats, clothes, you name it. While consumer spending is not necessarily a bad thing, you have to narrow this down, be selective,  and ask yourself, “Will this purchase add value to my financial freedom?” Most likely the answer will be no. I ask myself this almost everytime I get the urge to buy something that I do not necessarily need at the time. This allowed me to free up hundreds of dollars a month that I could put to better use and in places that can provide me with some additional income.

Being patient has been tough, but I know that I’m on the right track and the more I can save and invest the faster I will reach financial independence. Many of you may be reading this and wonder why I only have $35,000+ in Vanguard savings when I’ve been at this for almost 3 years. But I was starting from not only zero, I owed over $50,000, so I’m excited how far I’ve come in just 3 years! I had to not only invest time building my knowledge, but improve my career to the point where I could make a solid income and side income, and then start investing that money. Now it’s all about patience and optimization.

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I wasn’t thinking so much of plagiarism as I was about the simple act of someone sharing and passing it along to someone else. With e-Books, for instance, although I know there are several formats for them, I assume they are mostly PDFs to download. I don’t think it’s possible to password protect a PDF for opening (I think you can do it for printing or editing), nor to have some kind of time limit on being able to open it. As for courses, how do you ensure that the link or file doesn’t get passed around and accessed for free by people who didn’t pay?
You can absolutely use websites like eBay and Etsy! Try listing some items and making a professional Facebook page for yourself with a link to your eBay/Etsy pages. Then share the information with friends and family and get them to spread the word to people they know. Also, make sure that you have detailed descriptions and multiple pictures with anything you list online. This will help your listing show up in keyword searches, and you are more likely to sell something if the buyer knows a lot about what they are looking at.
You'll have a total of 2,800 points (worth £20) in your account so you can visit the 'rewards store' to choose which gift card you want - there's currently a sale on too. The gift card will then arrive within 10 working days, either by post or via email in the case of voucher codes. You can also convert your earnings into PayPal cash but it costs more points (800 SB = £5 PayPal).
I guess I’m in the Blockbuster Category, but living in the Midwest I’d have a hard time figuring out how to spend $300k/year even though the math says it is not a problem. I think the reality is most people who are super savers are going to get to Blockbuster eventually assuming they don’t inflate their lifestyle along the way. There is a lot of truth to more money not bringing you more happiness…I spend less in “retirement” than I did while working and I’m exponentially happier. I checked my taxable account for the first time this year and it in the first 11 days it is up more than I’ll spend this year, interesting times indeed.
But don't make the mistake of thinking this will be a passive source of income—you're on call whenever you have a guest and you'll always need to keep the place clean for incoming visitors. On top of just renting on Airbnb, consider offering your guests paid add-ons, like Lauren Gheysens', Royal Day Out in London, England—where she gives visitors a local's only tour of the city, complete with bespoke 18th century costumes.

Remember Your First Financial Freedom Lesson Ive Got Some News


This is probably the most exclusive level of financial freedom. Hopefully, your financial freedom plan will allow you to outlive your money. Having more money than you expected to spend is great. Building enough wealth so that you could not possibly spend all of it is another. This group will likely be filled with people who either won the lottery, inherited a fortune or are founders of companies – think Bill Gates or Warren Buffet. Even if they went on a spending spree buying planes, yachts and automobiles; they would still have a hard time spending all of it. I should note that both Gates and Buffet have pledged to give away a vast majority of their wealth when they pass. I would be unfair to count that as “spending all their money.”
As for Sam’s levels, this is the reason I started to pursue more sources of passive income. I wanted to at least partially break the chain of being tied totally to a market return. I am nowhere near Sam’s league in terms of assets or passive income but it now represents a decent amount of our total income. I worry less about market returns and more about the viability of the income stream persisting. I use 3 fintech platforms for real estate which represents about 12% of my overall portfolio, a closed end fund designed for income, a high quality MLP and at this time a boatload of cash since I think bonds represent a bad value.

How do I live a financially independent life


It doesn’t pay much, but if you’re a healthy person and want to make a bit of extra money online, the AchieveMint app will reward you for doing things like walking, tracking your food, or taking health surveys. AchieveMint works by connecting to fitness apps you might already be using like Fitbit, RunKeeper, Healthkit, and MyFitnessPal and then giving you points for certain actions. For every 10,000 points, you earn $10 with no limit on your earnings.
Those who choose to focus on passive income will need either family money, funds from investors, or the nerve to borrow large sums by taking on debt to fund the purchase of assets. Consider someone who takes out substantial bank loans to build an apartment building or buy rental houses. Although this can turn a very small amount of equity into a large cash flow stream, it is not without risk. When using borrowed money, the margin of safety is much smaller because you can’t absorb the same degree of setback before defaulting and finding your balance sheet obliterated.
The easiest and best way to shield your income from taxes is retirement plans. If your employer offers a 401(k) plan at work, put as much of your income into it as you can afford. At a minimum, invest up to the amount that will get you the maximum employer matching contribution. For example, if your employer offers a 50% match (3%) up to a 6% contribution by you, you should contribute at least 6% – and of course, more is always better.

Is money an asset


My 10-year-old son brought home a book from our park’s free library box. It was a biology textbook – teachers edition. He said it looked interesting and hey, it was free (having no idea you could sell it). I scanned it in my Amazon seller app and realized it was worth around $150. He was so excited. We listed it for sale for $130 and it sold! Going to tell him, he just made $130!

While I was nervous and scrambling to figure out what to do for full-time work, I began looking into digital marketing (I already had a blog about music that got me into SEO, analytics, etc.) and how I could improve my overall career worth. I wanted to find a job in something that I was really starting to enjoy as well as improve my future salary options. Here are the best skills to learn for the future.
Amazon Mechanical Turk is a service that lets you make money online through doing paid microtasks. Each task is something simple that requires human interaction like rating search results, checking for the right spelling on search terms, categorizing the tone of an article, or even basic translating. You can do these tasks from anywhere you want and make money online from the world’s largest e-retailer.
Build your audience on a course community: If you’re just getting started building an audience for yourself and want to leverage communities already actively looking for content you can choose to host and sell your online course on a site like Skillshare or Udemy. These are easy, cost-effective ways to build an audience and test your niche to see if there’s demand for it.
Remember, once you’ve reached financial independence, you no longer have to save. Everybody striving for financial independence tends to save anywhere from 20% – 80% of their after tax income each year on top of maxing out their pre-tax retirement accounts. Therefore, if you’re able to 100% replicate your gross annual household income through your investments, you’re actually getting a raise based on the amount you were saving each year.
I started small, about 10% each paycheck would be taken out for my savings accounts. Half would go to my Vanguard retirement account and the other half to my savings. Then, I kept increasing it and diversifying where the money went. Anytime I go a raise or made side hustle income, I would do the exact same thing as soon as it cleared in my bank account. Now, I’m on track to save 30% this year of my overall income, which I would like to increase to 40% by next year.

We invest our money into four separate buckets using Betterment’s online software: Safety Net, Retirement Fund, House Fund, and Wealth-Building Fund. (For complete details, see our Retirement Planning article, in which we we break down how we, as minimalists, plan for retirement and other financial objectives, using screenshots and real-world examples, including statistics and personal figures.)
– Project Payday is one of those sites that has testimonials of people who have earned thousands of dollars by getting paid to get trial offers. I’m not saying you’ll earn thousands, but it is legit and you can earn some extra cash. They assume that by paying you to do a free trial, you’ll either like the product and purchase it, or forget to cancel the trial and get charged for it. If you can keep track and cancel before you get charged (if you don’t want the product), then this is a great site for making some money.

Domain names cannot be replicated. If one is taken, the only recourse would be to approach the owner to discuss a sale. While there are other variations you could choose, sometimes owning a certain domain (especially if it is attached to your business) can be worth the premium. Often, people will scout out domain names that are still available, buy them, and then sit on them in order to sell them down the road. Depending on who may want the domain down the road, you could sell it for a large markup.

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Assuming you are doing pretty well and are happy with your current standard of living, what would you need to maintain your standard of living in retirement? Knowing you are on track to accumulate a nest egg to support that lifestyle is a big win. Gold medals go to those who have accumulated enough assets, or passive income streams, to be in a position to retire well.

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In economics, net worth refers to the value of assets owned minus the value of liabilities owed at a point in time.[8] Wealth can be categorized into three principal categories: personal property, including homes or automobiles; monetary savings, such as the accumulation of past income; and the capital wealth of income producing assets, including real estate, stocks, bonds, and businesses.[citation needed] All these delineations make wealth an especially important part of social stratification. Wealth provides a type of individual safety net of protection against an unforeseen decline in one's living standard in the event of job loss or other emergency and can be transformed into home ownership, business ownership, or even a college education.[citation needed]

How do I get financial independence


“Most of us are shocked to realize how much we actually spend,” Hester said. “After you’ve started tracking, figure out how much your lifestyle costs per year, look for what you might be able to cut out to shrink that number, and then start working on increasing your savings rate. Those are the hardest parts of the journey, and the rest is just a matter of waiting for the money to add up and compound.”
Hi Sam, interesting post as always. I’m always very curious about how you arrive at your estimates. It would be great if you could show us the math! (actually I’m very curious about this in your 401k value post) Anyway, in this post you mention: “need between $800,000 – $1,600,000 – to replicate 40,000 a year in passive income” This is a bit bigger than the standard 4% approach. I can see that you are cautious, I’m just wondering about how I could replicate some of the math too.
Now, it’s time to plan out your show. If you’re doing an interview-style show, you’ll now want to start getting some guests involved. You can use your existing social network to reach out to people you already know or are connected with on Twitter or Facebook. You can also head to Medium or Amazon to find authors or experts on topics specific to your niche.

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I actually had quite a bit saved up before I got on the journey to FI and thanks to the market run-up over the last few years and the increased supplemental income coming from my side businesses, my “passive” income and theoretical investment income (assuming 4% withdrawal rate) currently covers over 130% of my total expenses. Once we sell our house and lower our expenses even further, an even higher percentage of my expenses will be covered so although I was targeting only the essentials for FI, I’ll likely have everything covered and then some by the time I finally pull the plug on my career.
Teaching and tutoring English as a second language is a great way to make money online, not to mention open some doors for you to travel the world if you'd like. While full ESL (English as a Second Language) accreditation is recommended, as long as you’re a native speaker and have the ability to teach, there are people in countries such as Hong Kong or the UAE who are willing to pay upwards of $25/hr for you to tutor them English via Skype. Check out Indeed, Learn4Good and Remote.co for remote english tutoring jobs or sign up on a specialized site like VerbalPlanet or Chegg Tutors.

Why do you want financial freedom


To me, financial independence is being able to live how I want without worrying (too much) about money. It isn’t just about meeting X times my annual expenses and riding off into the FI sunset. Things always come up. A new roof, new septic system, etc. Also, I want my kids to go to whatever college they want and not be burdened with student loans. I want them to follow their dream careers, not be cajoled into a career because of the earnings potential. While I have a plan to retire early, I’m already struggling with the question “will that figure be enough?” If I’m being honest with myself, I won’t be able to fully retire and be completely happy and mindfully secure until I reach Blockbuster FI.
We—Joshua & Ryan—know first hand. The road to financial freedom was a long trek for both us. Even though we had prestigious six-figure careers, we struggled with money back then; and we weren’t financially free for a long time. In fact, it wasn’t until we walked away from those career’s (after devising a plan, of course) that we discovered how to get out of debt, how to eliminate unnecessary expenses, how to plan for our future, how to master our finances.
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