Today I saw a lady that was very proud of the fact that in a day she could literally do two completely different jobs and get paid for both of them. One job she was doing was within a media production field where there seems like there is always a lot of downtime. As well, she did copywriting for various businesses and that type of work allows her to be flexible in regards to where she can do the job.

Essentially, she gets paid to be onsite at one place and working when it is time to work and during the downtime she is doing the copywriting work and earning even more money. And to clarify normally in these downtimes she would literally just sit around and doing nothing. It’s not like a position like say a security guard where even though there is no one there you have to always be monitoring something.

That is a good idea I’d say. You usually hear people say how there are various types of work they do where there is usually a big chunk of time where they are doing nothing. Most people just use it as a time to socialize or emphasize how they just get paid to sit around. Instead, you can be proactive like this and try to find things that you can do with that downtime as well which won’t conflict with your main line of work.

Even if it is only reading a book about the various opportunities that are out there or how to save more money at least you are doing something with the available time you have to steer you to a financially commendable position I’d say.

It kind of surprises me when I read comments from people who are making very little money compared to more successful people when it comes to certain activities. Because of that, they assume it is a waste of time and give up. Example, think of someone selling items online in their spare time where they make say $50/month and they compare it to someone that makes $10,000/month.

I can understand if say you are spending 40/hrs a week and only making $50/month, but to judge something on simply what others are making is a little pre-mature. Think of that extra $50/month. The immediate thing that comes to my mind is that most people make way less than that in interest from their savings account.

From that perspective, your $50/month sure looks rosey compared to say $1-$10/month. At the same time, like with the bank example would you tell your bank that you don’t want the interest incentive anymore just because it brings in so little? That is an important mentality I’d say to not judge your results so much by comparing yourself to others all the time. Base it on your own numbers and efforts.

If anything, comparing yourself to others should be more about technique and strategies. Example, learn what they do and see how it can possibly apply for you. Bad idea to throw away streams of income like that just because it seems so little in comparison to others I’d say.

This is kind of a follow up to yesterday’s post about how some people see $100,000 as the magic number to enable them to sustain a comfortable lifestyle. Just to make sure we are on the same page, the previous post isn’t about “retiring” where you don’t have to do anything anymore, such as having a few million dollars. Another way to look at it is how much do you need in terms of an income pool to place yourself in a very good position where you can simply create streams of income to sustain a lifestyle while not having to “work” in a conventional way? I guess you can call it passive income if you want.

With that in mind, these numbers are completely made up just to get the general point across on how some people approach it. For example, let’s say with the $100,000 figure, for the whole year our expenses for an individual is $30,000. Now let’s say the person is into real estate and purchases this nice small office space for say $50,000 and now leases it out to someone for $1200 a month. So now essentially you have $50,000 left while generating $14,400 a year. Now with a $30,000 a year expense and bringing in $14,400, that means the person needs to pay $15,600 a year. With $50,000 remaining that means you have about 3 years and 2 months to be able live your life assuming the worst case scenario that you still couldn’t generate new income sources.

Now maybe this person wants to do some venture capitalism and funds this new business that looks promising for $15,000 while getting 10% ownership of the company. It happens to do well which gives us an additional $1000 a month in income. Now that means we have $35,000 remaining while generating $26,400 a year. That translates to the person now having to pay $3,600 a year and with $35,000 remaining we have about 9 years and 8 months to keep going at that rate. Again, these numbers are fictional as you have to factor things like taxes while at the same time you can do some creative things to make your expenses lower. With looking at that though, you can kind of see how it can work where your income and expenses are basically kind of like on auto pilot to allow you to do other things.

Depending on your background and expertise, there are definitely other ways to yield better return on investments as well. Another way to think about it is if you had say $100,000 and your expense for the year is $30,000 in total, can you think of a way to use $100,000 to generate $2,500 a month in total? You can even go higher and say that if your yearly expense is $40,000 in total, can you find a way to use $100,000 to generate about $3333.33 a month for you? So really, you are still kind of like most people in terms of how you manage your finances such as you can buy a home by getting a mortgage. The main difference is that you are kind of letting your money/investments go out and work for you instead.

How much you need initially and how much one actually needs per month is obviously on a case by case basis depending on your current lifestyle choice and situation. It’s an interesting choice and direction I think because as mentioned before most people only think about saving that much so that they can “retire” in the sense of not having to do anything. On the other hand, some people use it to generate a continuous stream of income to create a lifestyle where they don’t have to be physically tied down in having to work all the time.