Passive income is what will give most of us the opportunity to achieve financial freedom. Passive income is money that you don’t have to make through your efforts or with your time. Truly building wealth is about making your money work for you.
Forms of passive income include investing in the stock market, owning rental property, investing in real estate, peer to peer lending,or renting out your home.
Companies like Betterment and Vanguard make investing in the stock market easy. You can own rental property without the hassle of becoming a hand’s on landlord with Roofstock. You can invest in real estate REIT by buying stock or through Fundrise.
You can lend money to borrowers with Lending Club and rent out your home on Airbnb. Everyone should have more than one income stream. We could lose our regular job through no fault of our own so it’s best to have extra money coming in from other sources and one of those sources should be passive.
In addition, you can spend some of your free time starting a side hustle and making extra money.
When most of us think of money being able to buy freedom, we think of never having to work again, being able to retire.
Working is not all bad. There are lots of positive things about working; doing work that makes a difference for others, challenging yourself by learning and doing new things, the social aspect of a job, having a sense of purpose and a place to go and some structure to your days, and of course, bringing in money.
So we need to redefine retirement. When you achieve financial independence, that simply means the end of mandatory work, not the end of any work (unless you choose to never work it’s your call).
Retirement can mean not having to show up to a job you hate in order to keep a roof over your head. If things changed and your job was no longer enjoyable you could leave and take as much time as you needed to find a job that would make you happy.
Retirement can mean going changing fields to something you perhaps always wanted to do but knew would not pay enough to live the kind of life you wanted. You could go back to college to become a teacher or pursue a career in the arts and become an artist without the starving part.
Maybe you start your own business or you could spend your time volunteering for a cause you care about. You could run for political office. You can do whatever you want without money having to factor into your decisions.
What Financial Freedom Means
No matter what your financial situation is money is a tool we can all use, Like any tool, it can be used well or it can be used badly. Use your money to buy your freedom and start moving in the right direction to reach your financial goals!