Reaching for FI

Unless you got some lucky windfall to jump to financial independence (FI) you were working hard through stages and thus acquiring not only the resources of which to live off but also the discipline and habits that will make and keep you financially independent.

You made some serious and good decisions about your goals and lifestyle you want.

And even if you’ve got here getting some inheritance or winning the lottery to keep your financial independence secure you depend on the regular income which must meet your spending.

This income is supposed to be of passive nature, meaning you don’t need actively to work for it. Examples of passive income are:

  • Profits from business you don’t materially participate
  • Dividends or interest income
  • Rental income
  • Royalties paid for intellectual property such as music, books, manuscripts, computer software, or a patent

Of course there are many people working long hours and hard in this areas to earn money. But the key phrase here is »you don’t materially participate« as this is supposed to be low risk and passive income, remember! If you need to control and shuffle your portfolio on monthly basis that can’t be considered passive income. It can be a hobby, but you sure ain’t passive about it 🙂

It is also wise to diversify passive income between stated categories and thus lower risk of running into trouble.