How Do We Afford Full-Time Travel?

The #1 question we are asked...by far...

How can you afford full-time travel?

The Answer....

Through a variety of passive income investments.

The average millionaire has 7 different passive income legs. Why so many? You've heard the phrase, don't put all of your eggs in one basket. Savvy investors diversify their investments. If one leg collapses, there are multiple legs remaining -- the stool stays strong. It doesn't topple.

Our focus on earning passive income falls into 4 separate areas:

  1. Real Estate
  2. Stocks & Bonds
  3. Alternative Investing
  4. Business

The passive income from these investments more than covers our full-time travel expenses. Let's take a quick look each of our passive income streams within the 4 areas mentioned above.

Real Estate

Between 2009-2013 we were heavily involved in single family flips and rentals. During that time we flipped 20+ homes and purchased 10+ buy and hold single family homes. We've since sold those investments.

We are no longer actively investing in real estate, as we are uncomfortable with the risk of new investments. In our opinion, prices are high, returns are low, and interest rates are headed upward. Many people are still making great money in real estate investing, so don't let us hold you back if you feel that it is the right time for you.

We plan to jump back into real estate in the future, but not until we're comfortable with the risk. Who knows when that will be....it may be a year, 5 years, 10 years or even 20 years. We're comfortable waiting as long as necessary. But when the time comes, we plan to get involved in a big way. 

With that said, we're happy with our existing investments, as they were made years ago when the real estate investing landscape was more favorable to investors. 

  • Apartment Building #1
    50% ownership of an apartment building with a business partner. We put up more cash, while our partner manages the day-to-day operations. 
  • Apartment Building #2
    Same as above. 50% ownership of an apartment building with a business partner. We put up more cash, while our partner manages the day-to-day operations.
  • Mobile Home Park Fund
    We are part of a large group of investors that invests in mobile homes across the United States.
  • Mobile Home Park Debt
    A different mobile home park than above. We are part of a group of people that helped an investor finance the purchase of a mobile home park. We, as a group, are essentially the bank; we provided the mortgage. The investor pays monthly interest.
  • Tiny House Campground Debt
    We are part of a group of people that helped an investor finance the purchase of a tiny home campground. We, as a group, are essentially the bank; we provided the mortgage. The investor pays monthly interest.
  • Buy & Hold Condo
    We own a condo that we rent to a long-term tenant.
  • Restaurant Debt
    We are part of a group of investors that helped an investor finance the purchase of a building for a well known national restaurant chain. We, as a group, are essentially the bank -- we provided the mortgage. 
  • Hotel Equity
    We are part of a group of investors that helped an investor finance the purchase of a tiny home campground. We, as a group, are essentially the bank -- we provided the mortgage. 
  • Partners in Development of Luxury Home in Seattle, Washington
    We are part of a group of investors that is building a luxury home ($4MM+) in Seattle. Let's hope the market stays strong and that Amazon remains in Seattle. 😉
  • Partners in Development of Entry Level Homes in Raleigh, North Carolina
    We are part of a group of investors that is building 20+ entry level homes in Raleigh, North Carolina. 

Stocks & Bonds

We do not, and will not invest in single stocks. We only invest in index funds. Index funds have proven to outperform individual stock pickers 90%+ of the time. We're not stock experts, nor do we have time to research individual stocks -- that's not passive. 😉 Our philosophy is to keep it simple. It's when stock investors get overly complex that they lose money.

  • Vanguard's VTSAX
    Per Vanguard, this fund is designed to provide investors with exposure to the entire U.S. equity market, including small-, mid-, and large-cap growth and value stocks.
  • Vanguard's VBTLX
    Per Vanguard, this fund is designed to provide broad exposure to U.S. investment grade bonds. Reflecting this goal, the fund invests about 30% in corporate bonds and 70% in U.S. government bonds of all maturities (short-, intermediate-, and long-term issues).
  • Vanguard's VTIAX
    Per Vanguard, this fund offers investors a low cost way to gain equity exposure to both developed and emerging international economies. The fund tracks stock markets all over the globe, with the exception of the United States.
  • Vanguard's VGSLX
    Per Vanguard, this fund invests in real estate investment trusts—companies that purchase office buildings, hotels, and other real estate property.

Alternative Investing

With most, if not all investments (real estate, stocks, bonds, etc.) currently very high, we're diversified into some alternative investment. We look for investments that are low risk, high return, and if possible, uncorrelated to the market. This is a small percentage of our overall portfolio, as it is less proven than everything else in which we are invested. Therefore, we are uncomfortable taking on too much risk in this area.

  • Litigation Finance Funds
    Litigation finance is the practice where a third party (us) unrelated to the lawsuit provides capital to a plaintiff involved in litigation in return for a portion of any financial recovery from the lawsuit. We're invested in multiple litigation finance funds, which are essentially pools of 100+ personal injury lawsuits requiring capital. Thus far, we've seen consistent returns in the double digits.

Business

For us, business is the least passive of all our passive income legs. But, we include it in this list because it still meets our criteria of "earn money in your sleep."

We only list 1 business below. Why? Because we have a multi-year strategy in place that if executed properly will result in investment gains exponentially higher than everything else listed above. In order to execute on the strategy requires sharp focus. Introducing any other businesses would result in a lack of focus, and likely failure across the board.

Many entrepreneurs have so many great ideas that they lose focus, try to do too many businesses at once, or jump from one business idea to another. Make strategy and focus a top priority as you move forward with your next business.

  • TourGuides.com
    A travel blog with a personal finance twist. Our goal is to help people reach financial independence so that they can travel the world, or live a dream life in any other way they choose.

So there you have it. Everything above, for the most part, is super simple. It doesn't require an IQ of 130, or an MBA from Wharton. The only requirement is the willingness to learn, take action, and stay the course.

The passive income equation is simple.

Make a lot of money. Spend less than you make. Invest extra money wisely.

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