Asset Army: Wealth That Earns While You Sleep
At some point, the grind of swapping hours for dollars wears thin. The real question then becomes: how do you start making your money work for you? The majority of people spend their career working for an hourly wage, they trade time for dollars. You give your company 1 hour of your time and they pay you $50 for your work. 99% of people work their entire adult life this way.
Somewhere along the way, they start realizing that trading time for dollars can be problematic. Examples such as, getting sick, you get fired, you want to retire, you get injured, you need time off to help a family member, you want to travel for a month, or you are simply burnt out and need a break to reassess your life.
When the work stops, so does the dollar earning. When the dollar earning stops, the ability to pay your bills stops. Unless of course you have an asset army working for you. I want everyone reading this to reframe your thinking. Ask yourself how many dollars do I have working for me when I sleep? (aka passive income)
Passive income generates money while you sleep.
Passive Income Examples:
Stocks
Bonds
High yield savings accounts
Real Estate Investment Trusts
Real Estate (semi-passive in some cases)
Owning a business (can be active, semi passive or passive depending on the business)
Venture Capital/Private Equity
Solar/Wind farm lease
Cell tower lease
Room rental
Peer to Peer lending
Trading time for dollars is fine as long as you are investing a portion of those dollars into your asset army. As your asset army grows, so does your passive income. As your passive income grows, so does your financial security. When your passive income meets or exceeds your annual expenses, you are financially free.
Let's take a look at two different examples:
Typical Tom:
Tom works for 30 years and invested $100,000 into the stock market. Tom wants to retire but realizes that the 4% safe withdrawal rate is only $4,000/year. Tom needs $48,000/year to live comfortably. Tom is now depressed and sad realizing he shouldn't have bought boats, snowmobiles and booze. Tom ends up working until 73 when his back finally blows out and he spends the next 7 years of his life sitting in his recliner watching reruns of Lonesome Dove waiting for his social security check to come in the mail.
Savvy Sam:
Sam works for 30 years and has deployed $2,000,000 into her asset army. Sam owns 4 rental properties that are paid for, bringing in $50,000/year profit. Sam has $500,000 in stocks which produces $20,000/year at the 4% safe withdrawal rate. Sam has $150,000 in a high yield 4% savings account which earns $6,000/year. Sam owns 10 vending machines that earn a net profit of $80,000/year. Sam holds the mortgage on a $220,000 single family home at 7% earning approximately $15,000/year. The asset army generates $171,000/year. Sams annual expenses are $80,000/year. Sam is happy and sleeps well at night.
How many dollars are you allocating per month into your asset army?
Start recruiting your dollar soldiers today, because the only army you actually want marching at night, is one that is generating income, and providing security for you and your loved ones.