2 avenues to financial freedom

[blessedlion1993]

In Leos videos and most of what i read online, it seems like people think that it has to be done via creating some product or brand that provides you passive income.

 

But what if you just hustle for 5-10 years and then live off the investments? Why is this path so frowned upon? Everything i research about it is mostly negative, and I think this 4% rule is bullshit. 

You have to be a total idiot to only get a 4% return on your nest egg yearly. At the moment, my average investment return is around 18%, granted i've only been investing for like 3 years.

 

Anyway, I want to hear your guys take on building a nest egg, then coasting off the dividends, rather than trying to build a business from scratch which for some people is just not going happen. It's much easier for a person like me to just make a good amount of money in tech and saving my ass off til i can coast.

 

Thanks

[diamondpenguin]

@blessedlion1993 It takes a lot of money to do that. So starting a business is good way to fund you nest egg. Then your business is booming and then you put half into investments and half into savings, then it is just a fucking downhill snowball pummeling everything in its path. Do you feel like that's a good idea?

[VeganAwake]

The negative aspect of pulling out or living off the dividends is that you lose out on the compounding interest. 

Rental properties are great for passive income because you can have someone paying you rent while the value of your properties go up about 3 to 5% each year.

If you worked for 5 or 10 years and you already had a place to live, you could easily save up enough money to buy a couple rental properties with cash.

Then you could probably just work a less demanding job for money to live off of.

[Average Investor]

11 hours ago, blessedlion1993 said:

You have to be a total idiot to only get a 4% return on your nest egg yearly.

This would expect you to get about a 8% return on your money. The other 4% pays for inflation etc. If you just drew 4% and made 4% your money would actually have less spending power yearly. So that is why the 4% rule would imply that you got 8%. Sure, right now even granny could do 10% in the stock market I bet. However, the markets don't always move like this. 

 

11 hours ago, blessedlion1993 said:

Anyway, I want to hear your guys take on building a nest egg, then coasting off the dividends, rather than trying to build a business from scratch which for some people is just not going happen. It's much easier for a person like me to just make a good amount of money in tech and saving my ass off til i can coast.

Sure, really the main ways to get rich are investing, business, or being some sort of celebrity. So you just really need to knock it out of the park with one of these. 

If you could build up something like a nice real-estate portfolio of a few buildings that make closer to 15% return a year, then that could make some serious cash. Compound interest is nice as well. So the sooner that you get to investing the better. 

Keep in mind though that with investing you are not just limited to big stocks or real estate. You can invest in local companies and earn through them as well. 

Multiple sources of income is really the most ideal. So even if you had a nice chunk of change invested to do something like the 4% rule it is hard to rely on that. Especially if the markets go down. 

Even a really good stock picker is going to have some loses. So I would not just rely on something such as picking stocks unless you intend to master that. The richest people are always really diversified with their investments. 

I have found for myself it is a lot of headache sometimes to go out and look for new investments. It hogs a lot of mental energy and thought as well. I intended to be more diversified as I grow my capital more. 

[Yarco]

There is a whole community doing this called FIRE (financial independence, retire early), lots of people retiring in their 30s.

You probably can't do it in less than 10 years unless you make $100k+ a year and are extremely frugal

Regardless of your overall strat, investing early is overpowered due to the power of compound interest. Even if you're in your 20s working at McDonalds, if you can save away a few extra thousand dollars per year and invest it, you'll be way ahead.

[Spence94]

@diamondpenguin ? So simple but love it.

[Terell Kirby]

On 11/10/2021 at 0:22 PM, blessedlion1993 said:

Anyway, I want to hear your guys take on building a nest egg, then coasting off the dividends, rather than trying to build a business from scratch which for some people is just not going happen. It's much easier for a person like me to just make a good amount of money in tech and saving my ass off til i can coast.

I respect that you are honest with yourself, but would encourage you to take a closer look at the option of escaping wage slavery through creating some form of art that is meaningful to you. Coasting can lead to an unfulfilled life. You can be comfortable and miserable at the same time.

Investing and saving can be lucrative, but you could be doing it without passion .. therefore not seeing its full potential blossom. This is the same for working in careers that pay well, but you can't stand being there .. all for the sake of keeping up with ever growing expenses.

Becoming financially independent through raw creativity and ideas is hard as hell, and emotionally taxing. But going through the process itself is enough to keep you fully motivated. Your mind will sow all kinds of doubts to prevent you from taking on the challenge.

The Actualized.org life purpose course did wonders for me. It's worth the investment.

Edited December 3, 2021 by Terell Kirby

[Zeroguy]

Work,work,work,work more work and then work ,work ,work again.After it  well still work. 

[omar30]

4 hours ago, Terell Kirby said:

Becoming financially independent through raw creativity and ideas is hard as hell, and emotionally taxing. But going through the process itself is enough to keep you fully motivated. Your mind will sow all kinds of doubts to prevent you from taking on the challenge.

?? This is the best way 

[BlackMaze]

Don't forget about crypto. Also you could stop giving a fuck about the most supposedly conscious way. Do you need money or do you need an image for you and other people to look at? 

[Vision]

On 11/11/2021 at 7:17 PM, Yarco said:

Regardless of your overall strat, investing early is overpowered due to the power of compound interest. Even if you're in your 20s working at McDonalds, if you can save away a few extra thousand dollars per year and invest it, you'll be way ahead.

@Yarco Invest in what? Genuine question.

[Average Investor]

@Vision A well diversified portfolio is good. You can get a good range of ETFs and other assets. It will come down to your knowledge, risk tolerance, and capital. 

I would recommend a fund that will allow you to pay the least taxes on the gains as well. Something like a Roth IRA.

[Nahm]

On 11/10/2021 at 0:22 PM, blessedlion1993 said:

In Leos videos and most of what i read online, it seems like people think that it has to be done via creating some product or brand that provides you passive income.

 

But what if you just hustle for 5-10 years and then live off the investments? Why is this path so frowned upon? Everything i research about it is mostly negative, and I think this 4% rule is bullshit. 

You have to be a total idiot to only get a 4% return on your nest egg yearly. At the moment, my average investment return is around 18%, granted i've only been investing for like 3 years.

 

Anyway, I want to hear your guys take on building a nest egg, then coasting off the dividends, rather than trying to build a business from scratch which for some people is just not going happen. It's much easier for a person like me to just make a good amount of money in tech and saving my ass off til i can coast.

 

Thanks

Both. If you want. 

Also, don’t have to buy investments like companies, houses, etc with cash. With ample income verification the bank will instantly manifest the money for you. The “bank”, so to speak. Flipping the house(s) you live in is another easier way to make money to invest into more. Be sure to check into any state, city, fed programs which reduce and reimburse with respect to purchasing houses. Especially if you’re a first time home buyer. 

[Vision]

@Average Investor 

Say I have $70k in cash. Where do I get started? 

 

Also, Roth IRAs don’t exist in my country  

[Vision]

@Nahm What is income verification exactly? 

[Nahm]

@Vision

It’s usually paperwork, that shows / proves / verifies, income. 

[LfcCharlie4]

Agree, it doesn't have to be either / or. 

Personally, I choose to 'hustle' on building online businesses, as this also creates assets you can eventually sell or keep as cash flow machines. 

With any excess money I'm not spending on living, I invest, personally I'm big on Crypto, you can certainly make more than 18% if you know what you're doing, however, you can also lose 50% in a matter of days, so be prepared for that

However, Billionaires & macro investors like like Raoul Pal are focusing on Crypto, as it goes farrrrr beyond Bitcoin

Personally, I would recommend mastering one area of Crypto investing, the amount of people I've seen on twitter go from barely anything up to 7-8 figures, is insane

[Zeroguy]

11 hours ago, LfcCharlie4 said:

Agree, it doesn't have to be either / or. 

Personally, I choose to 'hustle' on building online businesses, as this also creates assets you can eventually sell or keep as cash flow machines. 

With any excess money I'm not spending on living, I invest, personally I'm big on Crypto, you can certainly make more than 18% if you know what you're doing, however, you can also lose 50% in a matter of days, so be prepared for that

However, Billionaires & macro investors like like Raoul Pal are focusing on Crypto, as it goes farrrrr beyond Bitcoin

Personally, I would recommend mastering one area of Crypto investing, the amount of people I've seen on twitter go from barely anything up to 7-8 figures, is insane

I am old fashioned. Not Interested in any of that. 

[Vision]

14 hours ago, LfcCharlie4 said:

you can also lose 50% in a matter of days, so be prepared for that

 

@LfcCharlie4 Has that ever happened to you? How do you deal with it?

On 07/12/2021 at 2:11 AM, Nahm said:

@Vision

It’s usually paperwork, that shows / proves / verifies, income. 

@Nahm What if your income isn’t fixed? E.g. owner of a business? 

Edited December 7, 2021 by Vision

[Nahm]

@Vision

There’s still paperwork verifying your income. In Merica it comes from the IRS every year and is used to do your taxes. They usually want copies of the last two years tax returns. The easy route… they’ll just tell you exactly what they need.