Financial Freedom As A Prep?

Financial Freedom.

What an idea – being able to dictate how you live your life without the burden of having to maintain some form of employment to continue on in your present lifestyle.

No, you have not wandered into a personal self-help blog or some scheme designed to rob you of your hard-earned cash (well, maybe you have – click on the “donate” button to the right and give me all your money….) I want to discuss the idea of financial freedom, and how it relates to someone of the preparedness mindset.

Why are you prepping? If it is for the impending zombie apocalypse, then I fear you may be disappointed (no matter how cool the idea is!) I believe there are many reasons to prep – from social collapse to CME’s to a slow slide economic downturn into an extended depression. What if life just gets crappy in the future, but not a running gun battle? While this is not as exciting in a literary sence, I think this is the more likely scenario – at least for a while. We may still have rule of law, just limited resources and services. In this case, unemployment will be huge (pick a number 25%?, 50%?, 1343%?) so you may have to rely on secondary streams of income to pay for things if you can’t get a job (or supplement the less than ideal job you have to take on.) I view prepping as insurance; you buy LTS food if the supply is interrupted, PM’s if the dollar devalues, firearms if local LE sources are not up to snuff – the following concepts of additional income methods are just another form of insurance.

You can claim financial independence when your monthly income from sources outside direct labor (investments, passive income, retirements, business income, etc.) exceed requirements. You can exceed requirements by either lessening those requirements by taking on a “simpler” lifestyle (a choice made by many – whom I applaud, because I believe that simpler in this case is not equal to “easier”) or increasing income sources.

Ways to increase your passive/supplemental/residual income:

1. Invest in the stock market. Yep, I’m really saying invest in the evil empire known as “wall street”. I recommend looking into an investment style known as “dividend investing.” The basic theory is put your money in well-known, dividend paying stocks that have a long history of paying and increasing their payouts. There are actually companies out there that have been paying dividends since the 1800’s and never stopped – even through recessions, depressions, and wars. While the percentages seem small (a good, consistent, dividend stock pays 3-6% a year) this can be misleading, because if you reinvest the dividends paid (buying more shares of stock with the payments) and the company keeps increasing their yield (the amount paid), you can get amazing profits over initial cash paid.

2. Start a business. The age-old advice on becoming a millionaire is to buy something for a dollar, sell it for two – repeat. A business can run and provide you with money and work even if no one else will. You do not need specialized knowledge or a giant financial commitment to start a company (it does help tho, no matter what anyone tells you.) If you are going into the resale sector, the reality is you are not going to compete on a cost-basis with any of the “big guys” so make your business about service and personal knowledge. Look at your local environment, find a need, and fill it.

There is a guy who comes to the business park where I work and offers to wash your car for you while you are busy in the office. I took him up on his offer one day – do you know how he gave me change from the $20 bill I gave him? From the gigantic wad of cash in his pocket. Fast-forward one year, he now has a van and a few employees he drops off and manages who service numerous business parks in the area. This idea didn’t take a lot of money, it wasnt even that ground-breaking of a service, it just took some work.

3. Affiliate programs. This is something I am just getting into, hopefully you all can help! Affiliate programs basically pay you for traffic and sales that your visitors complete. If you have a blog or website, you can create affiliate links that will track and pay you on portions of the sales. Take a look to the right of this post, you should see somewhere “Buy From These Guys – We Get A Cut!” – these are affiliate programs in action. I created an account with a place called Commission Junction (This is not a referral, and not a recommendation. I just started this service and don’t know how good they are, I’ll let y’all know in the future about my experience when I have a better handle on it.) Commission Junction puts blog/site owners in contact with those companies willing to offer a commission on sales, and manages the whole process.

4. Person-to-person lending. P2P lending is a new idea that I actually like in concept. I like it because in some weird way I feel that as an investor I am “helping” someone (while making a profit) and I’m cutting out banks from the lending processes. The way it works is:

    • A person requests a loan from the P2P lending site.
    • Person is vetted by the lending site, and basic information is made available to investors. Interest rate is set by lending site based on borrowers credit worthiness.
    • Investors buy “notes” on the loan, which is a small stake in the loan (with the network that I use this is set at $25 per note). This allows you to spread out your risk, so at most, you will only lose $25 bucks on that loan if they default.
    • Other investors buy their own notes until loan is funded.
    • If funded, the borrower gets their cash and (hopefully!) starts making monthly payments. (If not funded the loan expires and you get your investment back – there is normally a limited time frame for loans to get funded, about 2 weeks.)
    • Investors get their share for each monthly payment, until paid back with interest. Investors also get a cut of any late payment charges and fee’s. (And yes, the service gets a piece of the action, about 1%).

As an investor, you can make a good 10%-20% rate, but there is the risk of an individual note getting defaulted on. Before you invest in P2P lending, read as much as you can – there are some good blogs on finding the best loans, with the best pay-off potential. Further, certain states do not allow their residents to participate in this sort of investment – check with the lending site.

So, there you have it, four ways to make additional income. Two of the four will take money to get them going, but a little every month adds up fast (especially if you reinvest the money made,) and two take some work on your part. If you use all four, in multiple ways, you will have the best chance in getting a continuous income stream over the long-term.

There are other ways to make passive/supplemental/residual income such as designing a device app or real estate rentals, but I have no real knowledge on those – all of the above I have done, and am enjoying (small!) returns.

LAST MINUTE EDIT: I forgot about publishing e-books! That is all.

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2 Responses to Financial Freedom As A Prep?

  1. hartsoffice says:

    Great post! I have been making android apps for my passive income…and I always get made fun of because I am only pulling in 10-20 cents a day from ads and about $40/mo from app sales. One guy at my work actually said, “Be careful Hart or you might just make $20!” I actually laughed the hardest at this but still that is the attitude of people toward my ‘scheming for a better life’ But I am glad that I am doing something instead of just accepting my fate…I too use the Zombie apocalypse to show people the value of food storage, gun ownership, and of course passive income and debt freedom. Good luck to you bro and please continue to keep me in the loop!

  2. Thanks for the comment! You have to start somewhere, and there is no telling on how much you can make. In a few years, when your pulling “just” 1K a month on side income those same naysayers will be asking how do you do it – but won’t want to put the work and time in to make it happen. Keep up the good work.

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