This One Thing Might Help You Grow Your Passive Income Streams in 2018
Read time: About 4 minutes!
Happy New Year!
I’ve been wanting to write sooner but figured you’d probably be too busy kicking things off and your resolution(s).
Nevertheless, I hope you had an amazing start of the year and you’re ready to make this the year you and one or two streams of passive income.
Being in that very mode myself, I have been thinking about what it would take to not need to work again- meaning achieve freedom! What that would look like and how great it would feel. I’ve lately been obsessed with my numbers and I have been on a roll when it comes to tracking down where my money is coming from and where it’s going.
Busy working my numbers is when it suddenly hit me, I need a freedom number!
Going back to the plan I set late last year of focusing on just 6 categories of generating passive income streams. If you remember, I settled for a $15,000/mo passive income or $10,800 net after taxes.
So what’s a freedom number anyway?
My entire goal of generating passive income is so that I can achieve freedom– financially and in general. To be able to do what I want with my time. I’m hoping that’s the same for you?
Although I’m sure someone else has thought of this before, I wanted to know how much it would actually take on a daily basis to achieve that freedom. So I coined the term “freedom number.”
Break it down
So essentially, a freedom number is a daily passive income target number that when achieved will unlock all sorts of awesomeness that will allow me to do whatever the f&^% I want with my time, which will obviously include but not limited to sporadic naps in the middle of the day and filling up my passport book with lots of stamps.
So from that you can tell that a freedom number is the average amount you (and I) need to passively generate everyday of the month in order to achieve freedom.
For simplicity, I’ve set the days of the month to an even 30 days. After doing the math, my number is $360 (after taxes) or $500 (before taxes). I like both of my numbers and you can use whichever number you prefer- just keep in mind which one you choose.
This seems silly though, right?
I mean you already have your goals set so why do you need yet another number.
I don’t know about you but when I came up with this number it made me feel like my overall goal wasn’t far fetched. I think it has a psychological effect of some sort because for me, thinking I needed to generate $15,000/mo passively sounded a lot harder than saying/knowing I needed $500/day. It also made me realize that now that I have put more thought into it, I could definitely hit that $15,000 target.
I won’t lie though, $500/day still seems a bit overwhelming- remember this is all passive, meaning it will require little to no effort to maintain since most of the work will be done upfront.
It also adds another metric to keep me accountable and productive on a day to day basis. Each evening, I can review my day and know ok, “I’m up to making $100/day meaning I’m only $400 away from achieving freedom”.
Having a freedom number also forces you to narrow down all the income streams that are working and helps you weed out the ones that are not. It’s also a great way to help you closely monitor your progress from each income stream.
How to come up with a freedom number
If you are convinced that having a freedom number might be of use to you, the next step is actually taking the time to review your objectives and come up with one yourself- any number is better than none. So if you find yourself struggling with coming up with an actual number, just throw something out there and tweak as you go.
On the next blog, I’ll share how you can do this without feeling too overwhelmed and ultimately killing your dream of early retirement 🙂