In my previous post, I showed you scary numbers that prove that the middle class in America is disappearing. People continue to work and pump their hard-earned money into the Social Security fund, but the chances of them ever fully collecting their entitlement is not promised. In fact, the Social Security fund is quickly becoming insolvent and by 2034 will be depleted.
If you, like many Americans, have not adequately saved for your retirement and expect the bulk of your retirement income to come from Social Security you are in BIG trouble.
The Retirement Systems Are Broken
The retirement systems that were put in place by the government (to allegedly relieve you from the responsibility of looking after yourself) are failing. The Social Security fund is going broke and pensions systems are severely underfunded. You can thank near-zero interest rates that lasted for 10 years for creating a pension crisis.
Before social security and government-funded pension plans were created, the common practice was to rely on your children to support you when you could no longer work. Actually, in countries that don’t have a national retirement system, this is still the most common practice.
However, we are not talking about some developing country, we are talking about the United States.
No reasonable parent wants to be a financial burden on their children, especially at a time when young adults are struggling to start their own lives and are overly burdened with student loan debt and low-paying jobs; they can barely afford to pay their own rent let alone take care of parents that didn’t save enough money to secure their own financial freedom during retirement.
A better solution to secure your retirement, instead of looking to your children or counting on the failing federal government retirement system, is to secure multiple sources of income to fund your retirement. The more sources of income you have available to you the more financial freedom you have, and the less you are in trouble if one of them goes away. These funding sources can come from passive income, investment income (portfolio income), and business income (active income).
I discuss these three forms on income in Part 2 of my book What My Father Didn’t Teach Me: Lessons I Had To Learn On My Own.
For now, I want to talk about passive income.
What Is Passive Income?
Passive income is defined as income that is received on a regular basis, with little effort required to maintain it.
Passive income is something everyone should aspire to create for themselves. It’s how the smart money makes money. Instead of trading time for dollars to make money, smart people invest their time in something that, once it is established, will continue to make money for them indefinitely but requires very little ongoing effort to maintain it.
Take Action
What are some good ways to create passive income when you don’t have a lot of money to invest in purchasing real estate to derive rental income?
Like I state in my book, I’m a big fan of education. You should always strive to continue learning. But education does not have to always consist of earning a degree or reading a book.
A great website where I frequently go to learn more about ways to create passive income, among other insightful topics, is Udemy.com.
By enrolling in courses for as little as $10, I learned how to create and publish paperback and e-books on Amazon that consistently make passive income for me each month.
I have learned so much from this website. In fact, I learned how to create this website myself, TerrrenceJameson.com, by enrolling in one of the web design courses. There are so many ways you can learn how to make passive income by taking one of the many courses offered on Udemy.
You can learn:
- How to make online courses for yourself that you can list on Udemy
- How to start an online business on Amazon by becoming a drop-shipper and using fulfillment by Amazon (FB)
- How to publish books (written by others) on Amazon for passive income
I hope you get the idea.
Instead of putting your faith in Uncle Sam and others, do what people have done for centuries (and still do in other parts of the world) by creating income sources that are not reliant upon someone giving you a job to create income.
Age discrimination is very real. Just talk to someone older than 50 about how hard it is to find a job once you have surpassed the half-century mark.
Create income opportunities for yourself while you able to – while you still have your mental faculties and your health.
What are you waiting for?
The Government Will Not Save You
Just because many people will find themselves in a bad situation when they learn that the government won’t be there to save them from financial despondency, it doesn’t mean that you have to be equally as miserable. Their situation doesn’t have to be your situation. Just because some people are poor doesn’t mean that you have to be.
Take action right now by learning how to create passive income. Once you have several forms of passive income streams working for you, you can begin investing in developing portfolio (investment) income.