Hello everyone, I hope you had a wonderful Labor Day weekend. It is great to have an extra day off, but we should think about the purpose of this holiday. Labor Day was created to celebrate workers and their social and economic achievements. Workers have come a long way since the Industrial Revolution. In those early years, workers worked 12 hours each day to earn a living. We have come a long way since then and work is much better now. A family can have a comfortable lifestyle by working 40 hours a week.
Well, that’s not true for many people. Working 40 hours a week may have been enough to finance a comfortable lifestyle 30 years ago, but that’s not enough for many families today. The median household income was about $74,480 per year in 2022. That’s not enough for many families. The cost of living has risen dramatically over the past few years.
The cost of living is a big problem for young people who are struggling with high housing costs. Older people are lucky if they were able to get a good mortgage years ago. But that’s not true for renters and young people. Our monthly spending is low because our housing costs are about $1,300 a month. That’s less than most renters pay these days. That’s one reason why so many people have side hustles these days. A day job is no longer enough.
work overrun
Work is good. Everyone needs to work and contribute to society. The economy runs more smoothly when workers earn and spend freely. However, we all get older. At some point, we won’t be able to work as much.
Some workers think they can count on Social Security to make up the shortfall when they retire, but I’m not so sure. Social Security is expected to run out of money by 2035. That’s 10 years away! If Congress doesn’t fix the problem, all workers will receive far less Social Security benefits than expected. That’s going to hurt. Trust me, 10 years will fly by. It’ll be 2035 before we know it.
How many people think that Congress will come together to fix Social Security? I don’t trust our representatives. They will fight and postpone it until later. This is a tough issue and no one wants to deal with it. Anyway, I don’t think I would rely on Social Security much if I were a young man. Instead, you need to be more careful about … Become an investor To help fund your retirement.
Become an investor
We all need to learn how to move beyond work. Work is all you have when you’re young, but it gets harder as you get older. You need to save and invest to be an investor. It may take a long time for your investment income to exceed your earned income, but you can do it. At some point, your earned income will drop. This is inevitable, so be prepared.
Here are my tips.
- Learn about FIRE (Financial Independence and Early Retirement).
- Save 50% of your income and invest. This is not easy when you are young, but it will become possible as your income increases. Start with 10% and keep increasing your savings until you reach 50%.
- Save and invest in your tax-free accounts. Take advantage of your 401k contribution as soon as possible.
- Invest in the stock market.
- Invest in a business so others can work for you.
- Rent out part of your home or invest in a rental property.
- Invest in commercial real estate through real estate crowdfunding.
These are just a few ways to join the investor class. Keep investing! Eventually, your investment income will grow beyond your earned income. That’s financial independence. After that, you’ll have more power. You can continue to do what you enjoy, retire, or figure out the best mix for your family. Life is so much better when you have the freedom to choose.
Are you an investor? When will your investment income exceed your earned income?
*Passive income It is the key to early retirement. These days, I invest in multi-family real estate with Crowd StreetThey have several projects all over the US. Go check them out!
Image rights: Hobby Industry
Please follow and like us:
Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have several projects across the USA, so check them out!
Joe also highly recommends Personal Capital for do-it-yourself investors. It has many useful tools that will help you achieve financial independence.
Source link
