I thought of making a video out of this but I am feeling a little under the weather.
So, I decided to blog about this instead while the thought is still fresh on my mind.
Something I do regularly is to blog about my passive income.
It is a digital record of not only the numbers but also my thoughts at those different points in time.
Of course, the blog posts are also to inspire readers.
Hopefully, more regular folks like me would make investing for income a part of their journey towards financial freedom.
Yes, if AK can do it, so can you.
While having a conversation with some friends recently, they asked me how did I continue to grow my passive income while lacking an earned income in the past 8 years?
One of them reminded me how my annual passive income was closer to $100K more than 10 years ago.
Now, it is more than $200K.
It isn’t something I have given much thought to.
So, what did I say?
“I am just very frugal when it comes to money which allows me to continue investing more money although I lack an earned income.”
When I left the workforce, the biggest disadvantage was losing that earned income.
While still receiving an earned income, I was able to reinvest all of my passive income and also some of my earned income.
Retirement has definitely slowed the pace of wealth building.
A friend told me that being able to continue to grow my wealth even in retirement is quite impressive.
(Most people see their wealth dwindling in retirement.)
How did I achieve this?
In a nutshell, this is the beauty of investing for income.
I consume the income generated by my investment portfolio.
I do not consume my investment portfolio.
I do not eat the chicken but the eggs laid by the chicken.
However, this isn’t the full story.
Remember how my friends did a CSI on my passive income and reminded me that my annual passive income was closer to $100K more than 10 years ago?
Wasn’t $100K a year already enough to F.I.R.E. for someone like me?
Well, it probably was more than enough.
So, what was the problem?
I am a worrier.
Hard to change.
I needed a buffer and a significant one too.
How significant a buffer?
Well, consider this.
Even today, with inflation being as high as it is, I recently blogged about how I would probably be quite comfortable with $48,000 a year.
See how significant the buffer is?
If I had retired more than 10 years ago instead of 8 years ago, I would have had a smaller buffer.
If I had spent money more freely, the behavior would have probably carried into my retirement years.
I would not have been able to continue building my wealth to what it is today then.
For most of us, it is far easier to curb the outflow than to grow the inflow of wealth.
So, it isn’t just about not eating the chicken but the eggs.
It is also about having more than one chicken or having a buffer.
Don’t consume all the eggs so that we can sell some of the eggs to buy more chickens.
Of course, there were also times when buyers offered much higher prices for my chickens.
I used the proceeds to buy even more chickens.
Not all chickens thrive but most of them do.
So, how did AK the early retiree grow his passive income from $100K a year to $200K a year?
No earned income but can continue growing passive income?
Confirm and double confirm!
If AK can do it, so can you!
Related post:
Inflation, passive income and budget.
