Journey to financial freedom

Work. Earn. Spend. The seemingly eternal cycle which most of us can’t seem to escape. Today I begin my journey to break myself out of this cycle.

My goal is to set up streams of passive income that will provide me with supplemental income and/or when it becomes significant, live off it when required. There some lengthier writing down below, and lots of numbers so here is a brief summary. My goal is to produce $2080 (weird number I know) per month with passive income. This would be enough to theoretically live off, or as a great supplement to regular income, transforming a 50k/yr income to 75k/yr income. If you want to join me in this journey follow along as I get started. Here come the details.

Rent: It is not unlikely I would search for a place to live with a roommate, to cut costs. With his in mind, and current rental prices in my area, $700 could be manageable for a decent rental split with a roommate.

Food: As an athlete and someone with a high metabolism, I eat a lot of food, and I can only see that increasing. $450 is likely a bit much but it would be nice to have extra budgeted.

Monthly expenses: These are the recurring expenses like phone bills and internet bills and Netflix. Yeah I included Netflix in my budget… $150 is the most I would spend on expenses such as these, and would find a way to cut it down to this level.

Spending: This is for the uncommon expenses, going out for a movie or for a dinner. The once per year expenses like a gym pass or a trip somewhere (yeah in my opinion you gotta budget some for fun, too. Otherwise what’s the point?) $175 should do it, hopefully. I can cut myself off if needed.

Savings: Yes I know this is supposed to be just the bare minimum to live off but savings are hugely important. Either to build up a sufficient emergency account or slowly add more to investments to slowly increase the monthly income is important. $125 per month isn’t actually that much, but over years it will add up.

So that totals to a neat $1600, but we’re not quite done yet. One thing to consider for the long term future is inflation. Yeah, inflation sucks. So over ten years inflation could total around 30%. Assuming that, it will raise my total to $2080 per month. Now that we have this daunting number lets set the timeline.

I want my goals to push myself while remaining achievable. Specifically for this goal I want to achieve it early enough so I can use this to improve a majority of my life. So here’s the deal: I want to establish this by the time I am 30. That sounds pretty damn good. Luckily right now I am 19 years old, and in November will be 20. That gives me (not including July) 10 years and 4 months. 124 months. I’m going to have to work very, very hard to achieve this, while also leaving me time to achieve my athletic and academic goals. Starting to feel a little daunting now considering wages and how much time I have available to work with athletics and academics, so increasing my monthly income by 208$/mo per year (or $2416 of passive income increase per year) so that’s pretty significant and not happening. So I’m going to set yearly goals:

From the classes I have taken and need to take I have 4 years left in my planned degree – a bachelors degree and a masters degree, after that I will have far more time to work and get  a well paying job, so here are my goals per year.

This is my plan for the four years I remain in university. I will work in my free time as much as possible, and any excess of my University costs I will put aside and towards my passive income goals. All passive income I generate will be reinvested into my passive income streams.

Year 1:  +$50/mo        Year 2:   +$55/mo       Year 3:  +$60/mo    Year 4:  +$65/mo

Four year total : $230/mo

Now I will be done University – great! Hopefully I have some degrees and can find a more steady and well paying job. Now is when this really kicks in. As much of my income as possible I will put into my passive income streams, while being able to live and spend and remain out of debt.

Year 5:  +$100/mo    Year 6: +$150/mo     Year 7: +$225/mo

Year 8:   +$325/mo     Year 9:  +450/mo     Year 10:  +$600/mo

Ten year total : $2080/mo

As you can see, I am hoping to really ramp up the passive income through the later years, ideally investing all of the passive income gained, and as much of my income as possible, which will also hopefully increase gradually as well. And so there you have it. That’s the breakdown of my goals. I do not know all the streams of passive income that I will utilize, and I will be doing a lot of research, one stream at a time.

I aim to update every month (first Sunday of each month for consistency?) and will be updating you with what I learn and what I use so anyone following along can hopefully create their own goals and supplemental income streams.

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