A lot of people want to be rich and want to become rich by working on everything that they can think of. And this is where they get burn out and get tired of working on their goal to be rich.
Rich people and the salaried people have one difference. That one difference alone makes them rich and keep the salaried people in the hamster wheel forever. That one thing is - passive cashflow.
Passive cashflow is basically the cashflow that works when you don't. Like you are spending time with family, friends or you are taking rest while that money is put to investment and is working for you.
Image Credit: Unsplash
Why Passive Cashflow is necessary?
You start working on a job at 20. You have all the physical and mental energy. You take on any challenge in the world. You can manage depression, anxiety and all the life problems better before you reach 30.
From 30 onwards, your body and mind starts to give up on many problems, life issues, money issues. And it tries to find a way to delegate the problems. Each 10 year block would further reduce your mind and body energy and demands delegation from you.
How would you achieve this delegation? You achieve this delegation through passive cashflow. This can be achieved by investing your current money and mental resources into system that does not need you once you set it up.
What are some ways to establish Passive Cashflow?
Passive cashflow can be achieved through various means. You can invest your sum into the mutual funds. You can get into stock market and hold the stock for years. You can also do the investment into crypto. Which I am sure you already know. You can stake your coins in many pools and hold them for some period.
So you get the idea of sources of the passive cashflow. You have to however manage those sources in such way that once those sources have market down time you have to shuffle them to avoid the loss.
That skill is the only skill you would need after few years of keeping the system in a place. So make sure to learn about various ways to setup the cashflow.
How do you get started with the passive cashflow?
Passive cashflow requires you to save money. So it all starts with saving. You have to save some money every month. Make sure to invest that saved money for savings account. Make sure to reach your goal of 1 year worth of the emergency funds.
Once you have enough money saved as an emergency money. You can then proceed for the investment which gives you return. Like mutual funds that give you 7% a year for investment. Now diversify with similar funds.
Make sure to save some money per month and invest that money into these sources. Like say mutual funds, deposits, gold, crypto etc. Make sure you diversify one source at a time. Don't fall for people who tell you only this source is the right source for investment.
Always diversify.
How do you diversify? How do you decide diversification sources?
You have to start somewhere first. And that source could be just one. Like you invest in bitcoin cash or BTC. You have to start with one coin before you can have diversified portfolio.
There are multiple ways to handle this. You can invest into one coin at a time. Or you can invest into multiple coins with small amount. How you do that and how you manage it is upto you. I'd recommend you to try one of the approach and see how that goes for you.
Mix and match approach always works when you have no idea how to diversify. Start with one source like mutual fund while also staying invested in the crypto. Keep pushing the multiple sources in this diversification approach.
You just have to start and then stack the sources one after another. You can increase or decrease or even shuffle the amount of investment into them. Shuffling always helps out when you want balance the portfolio. How you do that is upto you.
Conclusion
At the end, I'd say in order to be financially independent and path towards being abundantly rich, you have to keep on increasing the passive income resources. More passive income sources you have, things become easier for you to manage in terms of money.