Hello everyone, I hope you have a happy Labor Day weekend. It’s a great day off, but we should reflect on the whole of this holiday. Labor Day was created to celebrate workers and their socio-economic achievements. Workers have come a long way since the Industrial Revolution. In the early days, workers worked hard for 12 hours a day to make a living. Since then, we have made a lot of progress and the work is much better now. A family can enjoy a comfortable lifestyle for 40 hours a week.
Well, for many working families, this is no longer the case. A soul income earner who works 40 hours a week may have provided a comfortable lifestyle 30 years ago, but that is not enough for most families today. In 2023, the median household income will be approximately $80,610 per year. It's probably 2 people working, which is not enough for many families. In the past few years, the cost of living has exploded.
In particular, housing is a big problem for young people with lower incomes. The older homeowners were very lucky to lock in their mortgage loans from a few years ago. This is not the case with renters and young people. Our monthly expenses are low as our housing costs are about $1,300 per month. This is lower than what most renters pay these days. This is one of the reasons why so many people have side hustle and bustle today. A day's work is not enough.
Beyond labor
The work is very good. Everyone needs to work and contribute to society. As workers make money and spend freely, the economy is running better and better. But, we are all getting older. At some point, we won't be able to work too much.
Some workers think they can rely on social security to solve slackness when they retire, but I'm not sure. The OASI fund is expected to run out of money by 2035. Less than 10 years from now on! If Congress does not resolve the issue, all workers will receive much less Social Security benefits than expected. That would hurt a lot. Trust me, ten years will fly by. 2035 will be here before we know it.
How many people think Congress will come together to solve social security? I have no confidence in our representatives. They will argue a lot and kick the can. This is a difficult problem and no one wants to deal with it. Voters want tax cuts today and they don’t care what will happen in the 10 years from now. Anyway, if you are young, I won't rely too much on social security. Instead, you need Become an investor Help you retire.
Become an investor
We all need to figure out how to transcend labor. Work is all you have when you were young, but as you get older, it becomes more and more difficult. You need to save and invest so that you can join Investor class. The income from investment exceeds income can take a long time, but you can get there. At some point, your income will drop. This is inevitable, so you need to prepare.
This is my tip.
- Understand fires (financial independence, early retirement).
- Save 50% of revenue and investment. It's not easy when you're young, but as your income increases, it will be possible. Start at 10% and continue to increase your savings until you reach 50%.
- Save and invest in your tax discount account. Maximize 401k's contribution as soon as possible.
- Invest in the stock market.
- Invest in one business so others can work for you.
- Rent a part of a house or invest in a rental property.
These are just a few ways to join the investor class. Continue to invest! Ultimately, your investment income will exceed your income. That is financial independence. After that, you will have more power. You can work hard to enjoy, retire or find out the best combination for your family. Life is much better when you have the freedom to choose.
Are you an investor? When will your investment income exceed your income?
Image source: Hobi Industri
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Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects all over the United States, so check it out!
Joe also strongly recommends providing personal capital to DIY investors. They have many useful tools that can help you achieve financial independence.
