Marilyn Luis
Last week I wrote about there being no guarantees in life and some feedback that I got about it was that such insight was common knowledge. True, but how many still go about life continually seeking guarantees when they really are none to be had. I also spoke about taking calculated risks as way of combating the free fall from a world of certainties (the way we perceive it) to one without any assurances. Calculated risks mean taking a step into the unknown well-prepared and that cannot be done without some effort on your side. Part of that effort is arming yourself with sufficient knowledge and most importantly acting on the knowledge in a constant, persistent manner.
An example of such action is the disciplined creation of financial freedom, a state in which a person’s cost of living (the amount you spend on things like food, clothing, utilities, petrol etc.) is lower than his income (the amount of money you earn).In such a state, a person is free to pursue his dreams and wants, without worrying about the financial obligations at hand.
Attaining financial freedom is a great way to quell the worries that uncertainties bring by creating a situation where in you do the work once and then get paid forever from it without swapping your time for money. An example would be to write a best seller and then live off the royalties from it. More realistically, for people who don’t have the knack of writing a best seller, would be to set up something with their talent or capital and forever earn something on it like a 99-year lease on a building you own or network marketing where in you start out by selling products be it cosmetic, pharmaceutical etc. and then building a team of people to do the selling for you so that you’re earning commissions without doing the work.
Owning a franchise but not self employed such that you are not swapping your time for money, is another example of passive income.
One more simple way is to invest your savings and let compounding work its magic on your hard earned money to grow it to a sizeable lumpsum such that you live off the interest at risk-free rates which is basically a long term government bond yield, currently at 6.55% p.a., without having to put in any work or effort on your side after attaining the required corpus. Continual sustained action will get you the results you need.
This is what passive income is- you do the work once at some point or phase in your time line of life and then forever reap the monetary rewards therefrom. In a job, you continually swap your time for money. That’s great if you love your job but even then what if the industry you work in collapses and you are fired, or if you fall ill and cant work for a long period of time or if there is a change of circumstances that requires you to quit your job or what if your desires change and you want to do something else?
Passive income provides you with the peace, comfort and security you need to pursue a life of your choosing, without worrying about the money it would take to do so. Now that’s freedom, financial freedom to be precise and is truly liberating to feel it when you allow yourself to be fully immersed in a world of possibilities apart from your current day job, a salaried life dependent on so many contingencies.
Living life by design-your design-and not by default created either by circumstances or social pressures is something made completely possible by having a safety net like passive income, where money is no object. Just think of the things you could do!
