Investments
A major long-term goal that I want to attack with this company is that of being financially independent. I mean in the sense that I have enough money to live comfortably without needing to work, not in the sense that I’m debt free (but still have to work).
Most of us have to take the slow and steady approach: make investments, live below our means, scrimp and sacrifice to build a retirement fund. I live in Australia, and most of us have to pay 9% of our earnings into a superannuation fund. The problem there is that you can’t get that money out until you’re retired, and I sure as hell don’t want to be 55 years old and crippled before I can enjoy my savings. I view the 9% superannuation contribution as another tax, on top of the 30% (typical) income tax, on top of the 10% GST on expenditure. 49%-ish tax, and that’s before you even start moving into a decent income tax bracket. Nuts to that, I say.
Passive income is the way to go, not just for tax reasons. If you earn enough to support yourself without working, then you have great options. You can travel for a year and come back richer than when you started. You can be more aggressive with salary negotiations. You can choose to work somewhere fulfilling but unprofitable. You can quit your job anytime. You can repeat whatever you did to build up $N/year passive income and make it $2N/year.
There are a few ways to earn this passive income. The scrimp-and-save-and-invest method is the most common, and you’re looking at earning about 7% of your investment size each year that way. The obvious problem is that to make that 7% into a livable income, you need a huge investment. Which means you need to spend a lot of time earning money in the first place. Which means you need to get a job. And I don’t like jobs.
Don’t get me wrong. I’ve found paid work rewarding in many ways, including financially. I’ve worked hard since I left uni and responses from every employer I’ve had have ranged from ‘pleased’ to ‘ecstatic’. If you, future employer, were to choose me, I believe it would be a good choice.
Of course.
But I don’t want another job. If all goes well, I have taken my last job for the rest of my life. This is a big claim, which is why I prefix it with ‘if all goes well’. I’m taking on risk.
But back to passive income. While I am earning some passive income, it’s not enough to live off or pay for anything of significance. It’s not growing fast enough to capture my interest. Consumerism is not particularly interesting to me. And paid work is not fulfilling or profitable enough.
I’m interested in not working, and I’m willing to work damn hard to get there before retirement age.