More important than your paycheck
What kind of income is more important than the income produced by your paycheck?
The answer to this question will one day be the ONLY source of income you will have when (if) you stop working for a paycheck.
For this lid-flipping, mind-blowing exercise, we will ignore the income from your paycheck and your monthly bills and expenses.
Add up all the money you earned from all of your investments last year(stocks, bonds, 401(k), that kind of stuff). Only the amount that was earned.
Add up all the money you spent last year paying down debt(mortgage, car payment, credit cards, student loans).
Subtract the amount spent on debt from the amount earned from investments.
Ponder life. Ponder free will. Ponder the planets and the solar system. Ponder how not full Robin Williams is.
Question #1: What can you start doing THIS month and continue for the next 24 months to take a few steps in the right direction?
Question #2: What would the outcome be in 24 months from now? Would it be worth it?
What’s the point?
Apart from the income produced by your paycheck, how are you earning money?
If your only source of income is your paycheck, when and how do you plan on retiring?
The answer to these questions are possibly more important than the size of your paycheck. (If it isn’t now, it will be one day.) Everyone has a paycheck, that is just the beginning. Pay attention to this ‘beyond the paycheck’ source of income and adjust accordingly.
If you aren’t using some of the income produced from your paycheck to purchase income producing assets, why not?
If you are using the income from your paycheck to purchase liabilities(debts), why?
Lot’s of questions, what are your answers?
Bottom line: If you plan to retire, the amount of money your money earns is the only thing that matters. Yes, even more important than your net worth or the amount of assets you own. It’s the amount of money that your assets are actually earning that matters most.