The #1 question we are asked...by far...
How can you afford full-time travel?
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:
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.
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.
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.
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.
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.
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.