I had a powerful revelation about how my financial investments are impacting my life as we traveled through New York City last week.
This revelation — that our financial investments are becoming our own personal money printing machine —is one of the best surprises I’ve had since we started aggressively saving and investing our money five years ago. The bigger our asset-collection has gotten, the bigger the payouts have started to become. Just last week, as we were in New York, it suddenly hit me that my investments are starting to pay me to live the life I dream about. The positive side-effect of this is that I am slowly worrying less about money, so I can enjoy my adventure through life more.
For this article, I thought it would be fun to share some real numbers so you can see what I am starting to see, and how these financial investments are starting to change my financial life. I’ll start by listing the cash-flowing (income-producing) assets I’ve collected first. (I call them cash-flowing assets, because they are creating real cash I can store in my wallet.)
My second list of financial investments toward the end of this article are what I call my: “Value-Producing Assets” or my collection of “Growth Assets.” I call these “Growth Assets,” because even though they don’t create cash, these type of assets still rise in value over time and increasing my net-worth as they grow. (A good example of a “Growth Asset” is when I pay my two mortgages on the first of each month. Because even though paying down the mortgage on these properties doesn’t create cash for me to spend, paying the principle off on my mortgage does increase my net-worth every month. Increasing my net-worth without cash = Growth asset.)
Let’s start by examining my first category of financial investments that are acting like a personal money printing machine in my life. (I’ve highlighted the monthly income they pay me in red.)
My Cash-Flowing Assets (Financial Investments):
Rental Property #1 of 1 = $1595 monthly rent (-) $980 mortgage = Cash flow of $615 monthly income
501 shares of XEL Energy = Current Quarterly Dividend Payment of $190 or $63 monthly income.
11 shares of 3M stock = Quarterly Dividend Payment of $15 or $5 monthly income.
167 shares of VTSAX index Fund = Quarterly Dividend Payment = $55 or $19 monthly income.
10,000 shares of VMMXX Money Market Fund = 1.8% APR = $180 yearly payment or = $15 monthly income.
This blog, Wealth Well Done = Currently earns around $1 per day or = $30 monthly income.
(Disclaimer: Moving forward I will be exclusively investing in VTSAX and VMMXX. I only own XEL and 3M because I was gifted them by a family member as a child. I am keeping them because they’ve been good stock for the past 37+ years, they pay a nice dividend, and I don’t want to pay the taxes if I sold them. But moving forward, I will be mostly be an index fund investor. You can read my investment strategy here.)
As you can see, a lot of these numbers aren’t huge on their own. When we first started out investing, they looked even smaller! But when you just let them grow, and continue to add money to them, the dividends, interest, and cash they start paying start trickling into nice streams of investment income that you don’t have to go to a job or office to make! When we were in New York last week, I started adding all these individual income streams up in my head, and I started to realize that our financial investments are starting to create a total of $747 dollars a month of income that we don’t have to go to a job to make! That’s not a bad deal at all!
That’s why when we were in New York, I started to have a mindset change about money. I stopped worrying about what it was going to cost to buy lunch with my wife. Or what it would cost to rent bikes to ride around Central Park in Manhattan. Ultimately, I stopped worrying about spending a little money here and there to have the time of our lives. Why? Because we were now leaving the “scarcity mindset” of a fearful saver, and evolving into the “abundance mindset” of a successful investor.
What’s the difference between the “scarcity mindset” and an “abundance mindset?” When you possess a scarcity mindset, you’re afraid of spending too much, not having enough, or running out of money. But when you enter the “abundance mindset,” of a successful investor like we have started to do, you worry less and less about every dollar, because you’re investments are starting to replenish your money as fast as you can spend it so there becomes less reasons to worry about money.
For me, this transition happened similarly to the way a caterpillar becomes a butterfly. I once was a caterpillar eagerly making and saving as much money as I could so that I could one day grow wings and fly to my dreams. As I learned how to invest the money I saved, it was similar to the cocoon process a caterpillar goes through. Because once my financial investments were big enough to begin making me a strong stream of income, I was able to start start spreading my wings and taking risks to fly to the person I was meant to become. I just started to feel like I was entering this last stage this past week.
But back to my financial investments….
Since I don’t need that $747 investment income per month, I choose to re-invest it so that it makes my cash-flowing assets even bigger and more powerful. My goal is to keep re-investing the money I make from my investments, until the income I make from investing, becomes larger than my business income. Once investment income becomes my #1 source of income, I will be truly financially independent. Once I am financially independent, I can spend the rest of my life working on the passion projects that my soul longs to accomplish, such as: growing this blog, becoming a novelist, and helping people achieve their dreams in life.
Now let’s examine the second category of financial investments, which I call:
My Value-Adding (Growth) Investments:
Primary Residence Equity = Grows by $220 as I pay off the mortgage principal each month.
Investment Property Equity = Grows by $180 as I pay off the mortgage principal each month.
Retirement Accounts = Currently valued at $50,000. If these grow at the average rate of 7% yearly, that’s around $3,500 per year in growth to my net-worth.
The appreciation of my income-generating investments ( the real-estate and stocks in the first section): These fall in the “growth” category because I can only access the money they’re making me if I sell them for a profit, which I don’t plan on doing anytime soon. Based on a historical average, the value of these stocks should grow 7% per year. and my real-estate should grow 3-5% per year.
If you add all my “growth” investments up, I’m making an additional $12,000 in real-estate appreciation growth, and around $6,000 per year in stock growth not having to work for it. Not a bad gig!
All of these numbers above are what inspired me to slowly stop worrying about money when I was in New York City last week. I suddenly realized that I don’t have to be worried about my money anymore. Even if I spend a little, or give a little, my investments are starting to take on a life of their own, and fill my bank account back up even if I don’t work a ton!
I just want to let you know that I didn’t write this article to brag. My goal of writing this article to teach, inform, and hopefully inspire others that you can do this too. The huge sums of assets and money I listed above began from the tiny investment seeds we started to plant 6 years ago.
I remember the moment when it began, and our financial lives and futures began to change. My wife and I looked at each other with a $20 bill in our hands. We were hungry and were tempted to eat out. But we asked ourselves this question before we spent it: “Should we spend this entire $20 bill on a meal? Or should we find a way to eat for $5, and then save the remaining $15, and learn how to invest it?”
We were motivated to change our lives, and so we decided to eat for $5, and learn how to invest the remaining $15. That one small decision; repeated thousands of times over the last 5 years, sent us on our journey to wealth that we find ourselves on today.
This blog is written for normal people like my wife and I, who want something more out of life than a normal job and a little taste of freedom on the weekends. We’ve accomplished almost everything I wrote about above on normal salaries (We’ve never made more than $80,000+ combined annually). If you want this life, we just want to inspire you that you can do this too if you plan ahead, spend less than you make, and learn to love investing the rest.
Just do what we did: Every time you have a $20 bill in your bank account, maximize it’s value by spending $5 of it, and learning to invest the remaining $15. Do that over and over again hundreds and thousands of times over a few years, and you will begin to become wealthier than you ever thought possible in your dreams.
My dream is that you can have the same revelation I had when I was in New York two weeks ago: You can begin to stop thinking, worrying, and stressing about money. Who cares if you spend a little bit on something special, because your investments will naturally start filling your bank account back up when you get home.
God bless.
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Great post! I’m older and can tell you that over time the thousands and hundreds of thousands you are investing will turn into millions and work will be purely an option for you like it is for me now. Life still happens but when money is never, ever a concern then most of your worries become pretty small things! Having a spouse who sees things in a similar way like you do is also the most under rated wealth building secret out there. The right two people, together, truly can live less expensively than one because they provide support and accountability to each other that is unstoppable.
Thanks for this awesome comment that encourages anyone skeptical reading this, that this is truly the path to wealth: $5 invested grows into $50, which grows into $500, which grows into $5,000, and into $50,000, and into $500,000, and into 5 million. But it all starts with choosing to invest that first $5. Thanks for backing my words up with a real-life testimony and proof.
This is a cool way to look at investments, especially the value-adding (growth) investments. I’ve never really thought of the principal paid off on my house each month (~$600/month) as an “equal” to the other amounts I am saving each month, but you’re right – it is adding value every month, as evidenced by my net worth.
Awesome, inspirational post! Thank you!
Thank Tom! Just start with small goals, and then keep setting bigger goals. If you can do this, you can accomplish anything.