Quit That Job Forever by Creating Passive Income Streams

If you want to be free of the daily grind for good, you’ll need to generate passive income streams. You can say goodbye to mandatory work once you have enough income coming in from these sources to fund your lifestyle.

What exactly do we mean by “mandatory work”?

Well, whether you like it or not, you probably have a job or a business to attend to every day. Otherwise, you won’t be able to pay your bills. Without money to pay the bills, you will soon be unable to maintain your current lifestyle, and your life will be turned upside down. That is why we call it “mandatory work.”

Of course, if you enjoy your job, you may not consider it a mandatory endeavor, even if you live paycheck to paycheck. Attending work every day may provide you with a sense of purpose.

But, if you took money out of the equation and your job became optional, would you still show up to work every day?

Creating enough passive income streams can give you that option. By creating enough passive income streams to support your lifestyle, you can choose what you do, when you do it, and with whom you do it.

That’s when you reach financial independence. FI gives you the ability to fully experience life because you won’t be worrying about a lack of money.

Having a job as the only source of income can be stressful

Having to rely solely on a job to pay your bills can be a stressful endeavor. You’re forced to do whatever The Man wants with little leeway. You may not always be in a position of strength to demand more hours, higher pay, or work flexibility.

The good news is that this does not have to be the case forever. You can create income streams that pay you while you sleep and give you the freedom to work on your own terms.

It takes money to make money, and unless you inherited wealth from wealthy relatives, you’ll need to plant the seeds for passive income streams, which are initially earned through work or self-employment. This is what is known as active income.

Most people earn their money through active income and never fully appreciate the benefits of passive income streams.

The downside of active income

Depending on active income can be risky for several reasons:

  • In the long run, it is unsustainable.
  • Part of your time is owned by someone else.
  • You could become ill and be unable to work.
  • You’re getting older and can’t do as much physical work as you used to.
  • After 10-15 years, your job may not be as exciting, and you may develop a dislike for Mondays.
  • If you do not show up for work, you will not be paid.

By the way, if you hate your job, try to find another one that you can tolerate, and keep planting those seeds with your active income until you no longer need it. If you earn $500 from your job, save at least $100 and invest it! In other words, for every $10 earned, at least $2 is saved. That is how you begin to build your passive income stream. The process is straightforward!

The upside of passive income

The money you earn from investments is referred to as “passive income.” There are several advantages to earning passive income:

  • You have control over your time and can pursue your interests.
  • Dividend payments, for example, are more predictable.
  • It requires little effort to keep up.
  • You do not have to show up to be paid.
  • You do not have to deal with job insecurity and stress.
  • It ensures your financial security.

Relying on passive income is the best way to live

You want to be earning a lot of passive income because no one ever says, “Those damn dividends keep showing up in my account every quarter without my permission!”

Passive income is the way to achieve financial independence and eliminate the need for mandatory work! And there are numerous ways to generate passive income; it is simply a matter of personal preference.

Some passive income streams do require a significant amount of work upfront. You might be working on a project for a while until money comes in. Not everyone has the willpower to persevere until then. To create passive income in this manner, you must have the right mindset.

The beauty of it is that you only have to work once to set it up and you can be paid handsomely on an ongoing basis. Consider the case of getting paid in royalties. You put in the initial effort to write a book or a song and are then compensated indefinitely.

One hundred dollars can turn into thousands

Assume you can save $100 per month for the next ten years and invest it at a 7% annual rate of return.

How much could you have at the end of that period?

You’d end up with $17,368.48. That is the potential return on a well-diversified portfolio of stocks and bonds.

That means you only worked for $12,000 (paid in $100 monthly installments for ten years) and earned $5,368.48 in passive income. That is money that you did not have to work for. However, unless you save, you will never have the extra $5,368 in your account!

How money reaches your hands

Cash enters your life in four ways: through a job, self-employment, a business, or an investment. In his book, The Cashflow Quadrant, Robert Kiyosaki does an excellent job of explaining this. Although I don’t agree with everything Mr. Kiyosaki preaches, his books have taught me some valuable lessons, and the Cashflow Quadrant is a must-read in personal finance.

How people earn an active income

If you are employed:

You have a job where you trade your time for money. There’s only one problem: if you don’t show up to work, you don’t get paid.

If you are self employed:

You work for yourself and have more control over your time, but you are limited by time. If you are the main component of the business operation, you cannot usually take long vacations because the business cannot function without you. Also, if you get sick and are unable to complete your work, you will not be paid.

How people earn passive income

If you are a business owner:

You have people working hard to generate income for you. You’ve created a system that generates income for you, and you’re not even a part of it!

You can spend more time with your children without worrying about money, or you can go away and sip piña coladas for months, if not years, without your business suffering.

If you are an investor:

Money works tirelessly for you. You control the most passive sources of income. Hello, members of the 1% club! Instead of preparing for your next business presentation, you could spend your time planning your next exciting family gathering. This is how we roll!

Which cash flow quadrant do you want to be in?

To generate passive income streams, you must either own a business that generates cash flow without your active participation or become an investor (our preferred way). You must be in the equation’s right quadrant. 

Which side of the equation do you want to be on, and how are you getting there?

Which quadrant are we in?

We are currently working full-time jobs that are laying the groundwork for our passive income streams. Every dollar we save and invest means we’re transitioning from employees (E Quadrant) to investors (I Quadrant).

As of March 2017, our passive income streams covered all of our projected living expenses in early retirement. We have no desire to own businesses because our investments, the I Quadrant, provide enough.

Creating businesses (B Quadrant) will not bring us any more happiness, but will instead be a distraction from spending our time as we see fit. We are not claiming that this is the only way; it is simply the best way for us.

What types of passive income streams do we have?

  1. ETFs and mutual fund investments: We have a diversified investment strategy that is primarily based on index mutual funds and ETFs, which provide us with passive income in the form of dividends and capital gains. We believe that the time commitment required for individual stock picking is not a good use of our time. We already own a piece of over 4,000 businesses through funds and are satisfied with an annual average return of 8-10% with very little time commitment.
  2. Savings accounts online and money market funds: We keep money in the bank for short-term goals, usually those with a time frame of less than five years. The interest rate isn’t much to write home about, as it barely keeps up with inflation, but this is money that needs to be risk-free because it’s for a short period of time.
  3. A rental property: We own a rental property that generates monthly rental income and has a nice annual ROI (return on investment) of 10%.

Don’t be afraid to make mistakes

In his book, Robert Kiyosaki also stated, “Remember that anything important can’t really be learned in the classroom. It must be learned by taking action, making mistakes, and then correcting them. That’s when wisdom sets in.” Make no apologies for making mistakes. Accept responsibility for them and learn from them.

Start with creating your first passive income streams and continue your journey, learning as you go. Silence that small voice inside you that says it can’t be done. Build those FI soldiers, also known as income streams, and you’ll be surprised at what they can do for you.

Passive income streams provide limitless possibilities and complete freedom

When your money is working for you and doing all of the heavy lifting, the possibilities are limitless. You can live a life of travel, family time, hobbies, and volunteer work without ever having to return to work.

I mentioned earlier in the post that you need to create enough passive income streams to sustain your lifestyle, not just make money for the sake of making money. Money is merely a means to an end for us. It exists to give us the freedom to spend our time as we see fit.

I believe that chasing money for the sake of chasing money leads to a vicious cycle in which more money does not necessarily equal more happiness. It eventually begins to provide a diminishing return on your happiness.

It is critical to stay focused on your goals as you build your passive income streams. Save a dollar here, invest a dollar there, and you’ll soon have a significant amount of money flowing from those streams. Building passive income streams is a popular topic in the FI community, and we hope that after you have paid off any consumer debt you may have, it will become one of yours as well.

What types of passive income streams are you creating? What is your position on the Cashflow Quadrant?


After dedicating 13 years of his career to Vanguard, José retired from the corporate world at the young age of 44. During his tenure at Vanguard, he expertly coordinated the production of both electronic and print educational materials for 401(k) participants. Now, he relishes in his early retirement, cherishing time spent with his family, indulging in his favorite hobbies, seeking out new experiences, and savoring meals in the comfort of his own backyard.

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8 years ago

I think you should have put a picture of “el azaroso” instead of the chihuahua… he’s already FI y ustedes “fajao” XD

8 years ago
Reply to  LM

Every time I put a picture of a dog in here it’s a silence revenge on El Asaroso. Now, let’s get something straight: Pushok is not FI, he’s on a social program funded by us. He’s more of a “Lambón”! Yes! I said it, un tremendo lambón!

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