Hello everyone, I hope you had a great Labor Day weekend. It’s nice to have an extra day off, but we have to think about what this vacation is all about. Labor Day was created to celebrate workers and their socio-economic achievements. Workers have come a long way since the Industrial Revolution. In those early years, workers toiled 12 hours a day to make ends meet. We have made great progress since then and the work is much better now. A family can enjoy a comfortable life by working 40 hours a week.
However, that is not true for most people. 40 hours/week may have supported a comfortable life 30 years ago, but that is not enough for most families today. The median household income was $74,480 per year in 2022. That is not enough for many families. The cost of living has exploded over the past few years.
Housing costs are a major concern for young people with high housing costs. Older homeowners are more fortunate to have secured a good mortgage over the years. This is not the case for employers and minors. Our monthly expenses are low because our housing costs are about $1,300 a month. That’s less than what most employers are paying these days. This is one of the reasons why so many people have side hustles today. A day’s work is no longer enough.
Transcend Labor
The work is good. Everyone needs to work and participate in society. The economy runs well when workers earn and spend freely. However, we all age. Sometimes, we just can’t work that hard.
Some workers think they can rely on Social Security to pick up the slack in retirement, but I wouldn’t be so sure. The OASI fund is expected to run out of money by 2035. That happened in 10 years! If Congress doesn’t fix the problem, all workers will receive far less Social Security benefits than expected. That will hurt. Believe me, 10 years will pass. 2035 will be here before we know it.
How many people think Congress will meet to fix public safety? I don’t trust those who represent us. They will fight and kick the can down the street. This is a difficult thing and no one wants to deal with it. Still, I wouldn’t rely too much on Social Security if you’re young. Instead, you need to become an investor to help pay for your retirement.
Become an investor
We all need to figure out how to go beyond jobs. Work is all you have when you’re young, but it gets harder as you get older. You need to save and invest to be able to join the ranks of investors. It can take a long time for your investment income to exceed your earnings, but you can get there. At some point, your earnings will decrease. It’s inevitable so you need to prepare.
Here are my tips.
- Learn about FIRE (financial independence, retire early).
- Save 50% of your income and invest. This is not easy when you are young, but it will happen as your money grows. Start with 10% and keep increasing your savings up to 50%.
- Save and invest in your tax-advantaged accounts. Maximize your 401k contribution as soon as possible.
- Invest in the stock market.
- Put money into the business so that other people can work for you.
- Rent out part of your home or invest in rental property.
- Invest in commercial properties through real estate crowdfunding.
These are just a few ways to join the ranks of investors. Keep investing! Eventually, the money you invested will grow more than the money you earned. That is Financial Independence. After that, you will have a lot of energy. You can continue to work at what you enjoy, retire, or find the best combination for your family. Life is so much better when you have free will.
Are you an investor? When will your investment exceed your income?
*Net worth it is the key to early retirement. These days, I invest in multi-family properties with CrowdStreet. They have many projects throughout the United States. Go check it out!
Photo credit: Hobi Industri
Please follow and like us:
A minimum wage is the key to early retirement. This year, Joe is investing in real estate with CrowdStreet. They have many projects all over the USA so check them out!
Joe also highly recommends Personal Capital for DIY investors. They have many useful tools to help you achieve financial independence.
Source link
