The Most Important Financial Tip

How Do You Become Financially Independent?- Steve Davis

This is an Investor Tip I can't say enough. Build a second stream of income. Warren Buffett made the comment 30, 40 years ago, "Never rely on a sole source of income. Always invest to build a second."

Now make a note. He was talking about income-producing assets, not speculating in the stock market or with gold and silver or crypto.

Those speculations don't produce cash flow. Instead, he was talking about income-producing assets like real estate, something that puts money in your pocket every month or every quarter, or annually.

Now, why is this so important? It's because this is the path to eventual retirement. If you look at the 5% (and yes, only 5% of Americans are able to retire by age 65), almost all of them have second streams of income. Some of them have third, fourth and fifth streams of income. It's the effective way to retire.

The strategy of saving your way to retirement is just not working. That's what 95% of people try to do. They try to save their way to retirement and 95% of Americans are failing to retire by age 65.

People are not aware of this, but to have $10,000 a month in income (a bare minimum sum to live comfortably in the current economy) when you retire, you have to save $3 million. Most think that $1 million will work, but most are not thinking about it. They need to study living costs to figure out what it takes to retire in comfort. See, if you understand that you have to save $3 million to have ten grand a month in retirement, you realize that saving up $3 million is a near-impossible task.

Everything is not hopeless.

Do you realize it only costs $600,000 to produce $10,000 monthly?

If you were to start investing passively at a 20% rate of return to gain just $600,000, this investment strategy will produce $120,000 a year for you for the rest of your life, which equates to ten grand a month.

I love this point because it changes everything. After using this investment strategy in my late 20s, my quality of lifestyle has been insane. By age 30, I had enough in my second stream of income that I never had to work again. I had time to romance my wife, raise my kids, hit the gym, to be involved with the charities of my choice. I was able to live the way I wanted and did not have to rely on a paycheck.

So let's think about it. If your bills are $5,000 a month and you have $10,000 a month coming in in the second stream of income, when do you have to go back to work?

You don't. You're financially independent. What kind of lifestyle would you have if that were the case for you? Think about it deeply, and you'll see why I say over and over and over again, build a second stream of income. That's the Investor Tip for today; thank you for reading.

If you are interested in building a second stream of passive income to become financially independent today, please visit Steve at www.TotalWealthAcademy.com

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