After you have figured out how much money you need to retire, you are stuck with one major problem – well two : How long will you need that money and where are you going to get that money!
Plan stop working soon. Well both have the same answer in a sense. You find residual income that is at the very least consistent, but possibly growing. Residual income by definition is recurring income that comes, usually without recurring efforts.
Plan stop working soon
For example… if you build a house and rent it out. The rent you receive is residual in that is comes in regularly and without extra effort beyond the initial construction. Once you pay your maintenance costs, then you have your residual profits. You will have that income as long as you keep the house – and you can keep the house as long as it brings in a profit – ideally as long as you live!
So besides real estate what kinds of investments bring residual income with minimal risk and fluctuation? Well if you have enough seed money, you buy dividend paying stocks or income trusts. You can easily research the dividend history of a company, look for ones that pay consistent dividends year after year. Banks and insurance companies are good for this.
If in the last 20 years they have never missed a dividend you have a candidate. If they have gradually increased the dividend payout over time, you also have a solid winner. You don’t really care what the stock price does, you want to know how much dividend you can depend on from the company.
A $500 000* dollar investment in a diverse group of dividend paying stocks can let your retire on perhaps $50,000 per year* (* These numbers are just examples not real or validated.) If $50k is enough for you to retire on and live on for the next however long then you know how much you need to accumulate before you can retire. Another benefit of dividend income is that the tax rate on investment income in most western countries is much less than earned income taxes. So you get a break in all directions.
Plan stop working soon. I recommend that you look into some great online income generating businesses. Maybe you won’t make millions – that’s possible too. But if in the next few years you can make more money than working could get (unless you are an E*ron CEO) – and you continually re-invest that in a residual investment vehicle, you could retire real soon. Your online business would also be residual and expanding and reinvesting part of that income into other areas would create multiple streams of income.
But if you are like me, the first major hurdle is how to come up with that initial investment. Well you build a business that requires less investment. Then you use the income from there to invest in other residual income sources. Internet Marketing is a great place to start with opportunities growing everyday as more and more people come online. It’s easier than you think, but requires some action on your part.
The best thing you can do is find a mentor – someone who has done it before and is willing to help you get started. Don’t umm and haw – the worst that can happen is that you don’t make all the money you thought you would – but you have made more than you would have if you did nothing, and depending on the kind of life you have that little extra may be just enough!
Thanks for reading,
Your Rich Cousin
(Author and Business Success Story) Get the free e-book that got me started and helped me start making money at http://www.richcousin.com It’s so straight forward and easy to understand AND you will have the support you need to start making a great income online.