by Do you remember your first paycheck? I certainly do. It was the summer after my freshman year of college, and I was earning a whopping $5 per hour. At the time, it felt like I’d struck gold. Every Friday, I’d join the long line at the bank, eagerly waiting to cash my paper check. Those were different times, weren’t they?
Fast forward to today, and my wife and I have discovered something far more powerful than that weekly paycheck: passive income. It’s the sweetest kind of income there is—money that flows into your accounts whether you’re working, sleeping, or even on vacation.
Our Journey to Financial Independence
Our passive income journey began in 2006 when I started contributing to a 401(k). At first, it was a small trickle of dividends, barely noticeable against the rushing river of our expenses. But over time, we learned to think like investors rather than consumers.
We focused on growing income-generating assets instead of buying things that would only drain our wallet. It wasn’t always easy, but the results have been life-changing. Just two months ago, we reached a major milestone: financial independence!
Breaking Down Our Passive Income Streams
So, what exactly makes up our portfolio? Here’s a snapshot of our passive income sources from last year:
- Dividends: $18,745
- Rental Property: $11,442
- Bank Sign-up Bonuses: $1,200
- Class Action Lawsuit Settlements: $692
- Credit Card Cash Back Rewards: $480
- Interest: $394
- Gifts: $268
- Ebates.com: $53
In total, we generated $33,274 in passive income. That’s a 36% increase from the previous year—talk about a raise!
The Power of Dividends
The star of our passive income show is definitely dividends. Last year, our dividend income grew by a staggering 52% to $18,745. It’s incredible to think that over 2,000 companies worldwide are now working for us, sending us a slice of their profits.
Why We Love Passive Income
Here’s the beautiful thing about passive income: it doesn’t require performance reviews, overtime, or office politics. Our investments are quietly working away, freeing up our time and energy for the things we truly care about.
Looking Ahead
While we’re not quite ready to retire just yet, we’re getting close. In another 2-3 years, we expect our passive income to cover all our expenses, allowing us to live life on our own terms.
Your Turn
What about you? What passive income streams are you building? Remember, the key is to work once and let your money work for you forever. It might start small, but with consistency and patience, you’d be amazed at how it can grow.
Share your passive income journey in the comments below. Let’s inspire each other to financial freedom!
It is a beautiful thing. Once the hubby and I started talking about early retirement, we realized we would need to build our non- retirement accounts if we wanted to avoid pesky penalties, so we focused our savings efforts on that.
Hi Jana!
Yes, having enough investments to fund the first 5 years, if one is thinking about doing the Roth conversion ladder, is crucial for an early retiree. Cheers to the loopholes that make early retirement still a possibility without the penalties!