Instead of just having one goal based on net worth, I'm finding it increasingly important to have my eyes on another prize. I want to have enough income coming from places outside my day job to cover all my typical month expenses. This way if I get downsized, as I did when the Internet bubble bust, I can get by. This may sound like a doomsday scenario, but as we are a two income family, I don't expect it to be the problem that it once was.
Here are my preferences for alternative incomes:
- Passive income such as that from bank interest is ideal. This requires no time or effort on my part.
- Incomes such as that from that my investment property is very good. This requires some maintenance on my part, but it's not daily.
- Incomes such as that from this blog is fine, but is still good, but less valuable. It does require significant time for the money, however, since I enjoy it and can do it while watching TV in my underwear, it's good quality.
- I'll add other ways I can earn alternative incomes here as I think them up.
My current revenue streams:
- Prosper.com - I'm a big believer of this site because I thought it up back in 1999. There's just too many middlemen in banking. There's too many in real estate as well, but that's changing too.
- Bank Interest - No explanation needed on this one, but in general, I think I can do better in Prosper.com.
- This blog - I'd do better working at Starbucks or Wal-Mart, but it still qualifies as an alternative revenue stream.
- My investment property - This may not actually be an "investment" for quite some time as I'll lose $550 a month in the first year. However, I'm taking a long term view of things.
I can attack this goal in two directions, bottom up or top down. I can increase my alternative income streams or I can reduce my expenses. I hope to do a lot from the bottom up and a little from the top down. There is only so much I can slice out of the necessary expenses. One big one is my HELOC, which I used to ask my fiancee to marry me. Some may condemn HELOCs, but that was one of the best decisions I made. Even from a financial perspective, we each save a lot more money living together than we did separately.
Here are my monthly necessarily expenses are:
$1,049 - Housing (including my current rent and mortgage on investment property minus the incoming rent)
$325 - Transportation
$143 - HELOC
$125 - Groceries
$43 - Internet + Cable
$27 - Gas and Electricity
$30 - Cell Phone
$25 - Property insurance
$7 - Home Phone
$1,774.00 - Total
My current alternate income (after taxes) from the aforementioned services:
So I'm only 0.96% of my way there - this is going to be quite the journey.
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