Author Topic: Building a secondary monthly income  (Read 3612 times)

Fallenour

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Building a secondary monthly income
« on: February 09, 2015, 10:14:39 AM »
Situation:

Age: 24
Monthly income: More than enough
Minimum Monthly Bills: 1,420 monthly / 17,040 annual
Currently Secondary monthly income: 402.27 / 4,824 annual
Objective: 1,750 monthly / 21,000 annual, without real estate & second job

Currently, mediums I have looked at include annuities, which I barely understand (even after research), dividends (monthly and quarterly), P2P lending (unstable), and a second job (which the warden says she'll execute me for).

Any ideas guys?

Honestly, what I am looking for is a "sit and forget" concept, or something someone else will deal with.

In the past I went through a time where I was unemployed, and it obliterated my credit, I went hungry, and generally without, and I want to do everything in my power while I have the opportunity to ensure that never happens again.

I try not to make the same mistakes twice.

Any advice is greatly appreciated.

JLee

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Re: Building a secondary monthly income
« Reply #1 on: February 09, 2015, 10:18:17 AM »
Basically you want to make $20k/yr doing nothing?

Let me know when you figure that out - I want in as well!

Fallenour

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Re: Building a secondary monthly income
« Reply #2 on: February 09, 2015, 10:27:25 AM »
Well its not "for nothing".

I don't expect to get anything out of life for nothing.

What I do expect though is to have to pour a substantial amount of funds (190,000-386,000) ((4-8% annual return) over a period of 4-6 years to continually build up to that point.

I'm not an unreasonable person, and I understand there will be more required because of taxes and whatnot, but I do want to realize this objective.

I feel that it is both reasonable, and achievable with effort and discipline.

I do well enough financially through my career that it will allow me to have enough excess to reach this point.

JLee

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Re: Building a secondary monthly income
« Reply #3 on: February 09, 2015, 10:31:19 AM »
Well its not "for nothing".

I don't expect to get anything out of life for nothing.

What I do expect though is to have to pour a substantial amount of funds (190,000-386,000) ((4-8% annual return) over a period of 4-6 years to continually build up to that point.

I'm not an unreasonable person, and I understand there will be more required because of taxes and whatnot, but I do want to realize this objective.

I feel that it is both reasonable, and achievable with effort and discipline.

I do well enough financially through my career that it will allow me to have enough excess to reach this point.

Ahhh okay, I misunderstood. Absolutely - building passive income is certainly possible, and is exactly how everyone on this site retires early. :)

Fallenour

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Re: Building a secondary monthly income
« Reply #4 on: February 09, 2015, 10:45:00 AM »
Well that I understand.

My objective however, is to use it as a secondary "safety net income" for in the events I lose my primary source of income, whether temporary or otherwise.

I want to ensure myself and my family is taken care of.

Stability is my first objective, growth potential is my second.

I already max my contributions to my 401k and my IRA, but for obvious reasons that money isn't a viable solution.

FarmerPete

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Re: Building a secondary monthly income
« Reply #5 on: February 09, 2015, 10:56:40 AM »
For having a "Safety net", the best net is to just have pure wealth.  To generate $21,000 annually, you'd need $525,000 generating 4% interest/dividends.  If your annual expenses are $21,000, just having $525,000 in the bank could pay for your lifestyle for 25 years, even with a 0% return.  Just start generating wealth.  If a future hardship is a concern, than maybe give taxable accounts a higher priority.  Look at using a Roth IRA, as you can withdraw 100% of your cash contributions (not gains) at any time.

I would probably prioritize as such assuming you're married and you can live off of $21,000 a year.

1. 401k to company match.
2. Roth IRA to max $5500 per person.
3. 401k to max
4. Taxable brokerage

Even after year one, you'd have $11,000 of accessible money in your Roth if something bad happens.  If not, you can build up more every year.  That's over half of the yearly budget you are looking to have as income.  If you don't need the money, it will grow tax free and help when you eventually retire.  I'd switch to investing in a standard IRA once you've contributed enough to your Roth to give you that warm fuzzy safety feeling.

jeromedawg

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Re: Building a secondary monthly income
« Reply #6 on: February 09, 2015, 11:00:04 AM »
You should look into dumpster diving (for real, kind of...):

http://www.wired.com/2015/02/high-end-dumpster-diving-matt-malone/

This guy claims he can make $250k off it per year if he were strictly doing it as a full-time job.

I'm looking into this in my area but I'm pretty sure it'll be more troublesome where I'm at. He's in Austin, where it doesn't seem like the city pays much attention or cares about dumpster diving. I guess the only thing I'd be concerned about is injuring myself....


Actually, after reading a lot of the comments, it's probably not a good idea after-all. LOL!
« Last Edit: February 09, 2015, 11:14:56 AM by jplee3 »