A Sobering Reminder Of The Importance Of Creating Passive Income
Unfortunately, I'm writing this article from a hospital bed.
The last two days have been a nightmare. I came down with an infection in my arm that landed me in the ER twice and now in the hospital for monitoring and, hopefully, recovery.
Two years ago, I experienced something similar, and these infections are no joke. They can spread quickly and, if not brought under control, can lead to serious complications like sepsis or even death.
Experiences like this serve as a stark reminder of the importance of having my finances—and other aspects of life—in good order should something unexpected happen.
Thankfully, I have a great team in my sales role (my main source of income) that can step in and manage my client portfolio while I'm away.
If I didn't have them or my passive income streams, my income would come to a halt very quickly.
Passive Income = Insurance
In times like this, my focus shifts rapidly to the most important thing: healing.
I don't want to be thinking about work or money; I want to get better.
Over the last few days, I've had sales of my digital products continue to come in without any action on my part.
Passive income requires work upfront to create an asset and then little to no ongoing work.
It reminds me of having an insurance policy.
With insurance, you pay a premium regularly to have coverage should something unfortunate happen.
But with passive income streams in place, the money comes in regardless of whether you need it or not—and you don't have to worry about your claim being denied.
Passive Income = Options
Having passive income streams not only provides a layer of financial security but also helps protect you from sudden shifts in your career.
Recently, I've seen two close friends lose their jobs due to company cuts.
Right now, there's a lot of uncertainty with employment, the economy, and other factors.
My biggest goal for the next five years is to create enough passive income that I wouldn't need to work and could still live a very comfortable life.
I'm not there yet, but I do have a decent cushion between savings and passive income to help me get by if I faced a sudden and unexpected event causing job loss.
In five years, when I do hit that financial escape velocity, I'll continue to work, but I might not be interested in sales at that point.
It's a ways away, but here are some of my options:
Continue in sales, which generates high income and I enjoy, though it can be stressful.
Return to coaching, consulting, or speaking—activities I loved but which consumed a lot of time.
Focus 100% on creative outlets like writing, podcasting, or creating more digital products.
Passive Income = Legacy
Returning to the reason I wrote this article, it's a significant motivator for me to ensure my family is well taken care of should something happen to me.
My wife has also started a passive income business through her Etsy store, and I'm confident it could become a six-figure income for her in a few years.
I'd hate to see her take on a job she hated, and now is the perfect time for her to work towards her own freedom-based income.
I also believe what we're doing now will impact our children and teach them about not trading time for money and understanding true financial assets.
Your Passive Income Plan
One of the most unfortunate things I see is people letting the years go by without planning for where they want to be in the future.
Days, weeks, months, and years pass, and many live paycheck to paycheck or have minimal savings.
Those thinking ahead often focus on building a big 'nest egg' to draw from.
The problem with that approach is it becomes a depleting asset the moment you stop working.
Instead, create what I call a Passive Income Ecosystem made up of multiple streams of passive income that reinvest back into themselves and grow to the point where it becomes a Passive Income Snowball, perpetually growing on its own.
You don't need a lot of money to buy your first dividend-paying stock.
You don't even need money to start building your first digital product that can be sold repeatedly without additional work after creation.
Get started now, before you need it.
Passive income is the ultimate insurance policy.
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Go get it my friends.
Simon
