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Unemployed AK grew his passive income from $100K to $200K per year.

Sunday, November 26, 2023

I thought of making a video out of this but I am feeling a little under the weather.

So, I decided to blog about this instead while the thought is still fresh on my mind.

Something I do regularly is to blog about my passive income.

It is a digital record of not only the numbers but also my thoughts at those different points in time.

Of course, the blog posts are also to inspire readers.

Hopefully, more regular folks like me would make investing for income a part of their journey towards financial freedom.

Yes, if AK can do it, so can you.

While having a conversation with some friends recently, they asked me how did I continue to grow my passive income while lacking an earned income in the past 8 years?

One of them reminded me how my annual passive income was closer to $100K more than 10 years ago.

Now, it is more than $200K.




It isn't something I have given much thought to.

So, what did I say?

"I am just very frugal when it comes to money which allows me to continue investing more money although I lack an earned income."

When I left the workforce, the biggest disadvantage was losing that earned income.

While still receiving an earned income, I was able to reinvest all of my passive income and also some of my earned income.

Retirement has definitely slowed the pace of wealth building.

A friend told me that being able to continue to grow my wealth even in retirement is quite impressive.

(Most people see their wealth dwindling in retirement.)

How did I achieve this?

In a nutshell, this is the beauty of investing for income.

I consume the income generated by my investment portfolio.

I do not consume my investment portfolio.

I do not eat the chicken but the eggs laid by the chicken.

However, this isn't the full story.




Remember how my friends did a CSI on my passive income and reminded me that my annual passive income was closer to $100K more than 10 years ago?

Wasn't $100K a year already enough to F.I.R.E. for someone like me?

Well, it probably was more than enough.

So, what was the problem?

I am a worrier.

Hard to change.

I needed a buffer and a significant one too.

How significant a buffer?

Well, consider this.

Even today, with inflation being as high as it is, I recently blogged about how I would probably be quite comfortable with $48,000 a year.

See how significant the buffer is?

If I had retired more than 10 years ago instead of 8 years ago, I would have had a smaller buffer.

If I had spent money more freely, the behavior would have probably carried into my retirement years.

I would not have been able to continue building my wealth to what it is today then.

For most of us, it is far easier to curb the outflow than to grow the inflow of wealth.




So, it isn't just about not eating the chicken but the eggs.

It is also about having more than one chicken or having a buffer.

Don't consume all the eggs so that we can sell some of the eggs to buy more chickens.

Of course, there were also times when buyers offered much higher prices for my chickens.

I used the proceeds to buy even more chickens.

Not all chickens thrive but most of them do.

So, how did AK the early retiree grow his passive income from $100K a year to $200K a year?

No earned income but can continue growing passive income?

Confirm and double confirm!

If AK can do it, so can you!

Related post:
Inflation, passive income and budget.

24 comments:

Siew Mun said...

In other words it is about not spending all my money during your retirement. such that I cannot generate more income. Having CPFLife is a cornerstone that I can depend on for my daily expenses. While the rest is a buffer for me to generate income to grow my income and for the extras.

SgFire said...

Every 5 yrs earn one million

Kyith said...

Wah AK, you finally help me by saying soemthing I been trying to tell people:

financial security or to have the courage to pull the plug is a mental thing. it is sometimes about how you view whether your income is "safe" enough.

and people look at safety differently, and therefore some could pull the plug while others needed more to then pull the plug.

AK71 said...

Hi Siew Mun,

You have cracked the code. :D

If we are able to keep our needs simple and our wants few, we will definitely find it easier than most people when it comes to having enough money.

Depending on what we want to do in retirement, CPF LIFE might or might not be sufficient to fully fund our retirement.

CPF LIFE is dependable and predictable but it might not be enough which is why we have buffers. :)

AK71 said...

Hi SgFire,

Well, I am not earning any money.

The income is all passive which is the way I like it. ;p

Crossing fingers that things do not go horribly wrong. :)

Still, I am increasing consumption and I won't be expecting very much passive income growth through injection of fresh funds in future:
Passive income gone. Not growing portfolio.

AK71 said...

Hi Kyith,

Long time no chat.

I finally got to "see" you in a YT video made by The Fifth Person. ;)

Yes, I know what you mean and only too well.

It can be a blessing but also a curse to have a crisis mentality.

I am always thinking of what could go wrong to the point of being obsessed at some point in my life.

On hindsight, I have definitely overcompensated. -.-"

Well, it is a happy problem. ;p

I made a YT video recently on how we could have enough money but we could never have enough time.

If I had been more keenly aware of this in my younger days, I might have done some things differently (or not.) :)

Rock said...

Hi AK,
Most of the financial blog teaches us on how to eat the egg and not chicken. As you know our life will end one day but we cannot predict when will it end. We still have to make assumption or else, the chicken will run all around and some may go to stranger's house and some may be waiting to eat the chicken that we took care of.

Can you talk to yourself how to have a solution that we have eggs while having the least chicken before we "go"?

Dan

Henry said...

YT = Yan Tow ?

AK71 said...

Hi Rock Dan,

The best way I can think of is to have money locked up and receiving a monthly income from that locked up money.

CPF LIFE comes to mind.

We can buy other annuities to supplement this.

So, the chickens will be locked up in cages bolted to the ground. ;p

The eggs get delivered to us monthly. :D

It is something I have been thinking of doing and if I do it, I will blog about it. :)

AK71 said...

Hi Henry,

YT = YouTube.

YD = Yan Dao. ;p

LoyaLover said...

Hi AK,

I chanced upon your sharing on The Fifth Person's YouTube channel. It was very insightful, and in line with many of my own thoughts.

I then went on spending hours on your personal channel. Thank you for putting out your videos.

With little experience under my belt, I've always been drawn to a very passive, single strategy option that doesn't require my input (such as DCA-ing the SPY index).

Mainly because I'm a simpleton who would forgo higher returns for a more fuss-free approach.

Given your experience, what are your thoughts on simply DCA-ing into index for dividend income? E.G. SPDR STI ETF / S-REIT ETF

Looking forward to hearing from you whenever appropriate.

Thanks again!

AK71 said...

Hi LoyaLover,

Welcome to ASSI! :D

Once you have spent enough time reading my blog and listening to me in YT, you would get the message that AK isn't here to tell people what is best for them.

I always say it is never my way or the highway. :)

We are all different in so many ways and we should all have our own plan.

To assume that there is one universal approach or a one size fits all solution is probably not a good idea.

The ETFs you mentioned serve people who do not have the time nor the inclination to do stock picking.

DCA is also a viable strategy for people who do not wish to time the market.

If you like to keep things simple, it isn't a bad approach. :)

LoyaLover said...

Hi AK!

Thank you for taking the time to provide such a prompt response! Yes I realize that you're particularly careful about giving your opinions and I understand where you are coming from.

While there might be many readers who are into stock picking / managing their own funds, I'm sure there are also many like myself who's inspired by your path, but may not have the knowledge, character or volitity resilience to do the same.

With no obligations at all, I look forward to a video one day on your thoughts about how one can take a fuss-free approach to building a dividend income investing.

AK71 said...

Hi LoyaLover,

There are always 2 sides to a coin.

If we want fuss-free, we have to give up something.

There is a price to pay for convenience.

So, a REIT ETF is fuss-free, for example, but we do not have control over what goes into it.

Also, if the REITs should need to raise funds through rights issue, we cannot participate, for example.

At the end of the day, we just have to do what we believe will work for us. :)

D said...

Hi AK,

Congrats, you are always an inspiration!

If it is not rude for me to ask, how about the income from blogging and YouTube, income as a influencer so to speak. Is it ok to reveal in what range? Maybe that itself is significant also : )

Thanks

AK71 said...

Hi D,

I made a video about that not too long ago.

It is really pocket money:
My FINAL VIDEO possibly. Manulife US REIT. DBS. Keppel REIT. Parkway Life REIT.

The Dreamzola Traveller said...

Aye, it goes 2 ways. Increase income and maintain lifestyle spending.
Achieve both, the financial position remain sustainable.

AK71 said...

Hi TDT,

Yes, keeping our needs simple and our wants few will make it much easier.

As a retiree with no active income, I appreciate this even more. :)

D said...

Thanks AK for your response.

I watched the video. I don't think you should bother the naysayers. They are jealous.

Have a great 2024 ahead

AK71 said...

Hi D,

Trolls are not limited to fairy tales, I suppose. ;p

It is one of the hazards of being a blogger and YouTuber. (TmT)

Happy 2024 to one and all! :D

waikaye said...

Hi Ak & Rock,

I resonate with having a frugal/saving/crisis mentality and have been trying to remind myself that it is ok to spend money (reasonably). A book I came across that speaks to that and also having the least chicken before we "go" is Die With Zero by Bill Perkins. I don't necessarily agree with everything but some of the ideas proposed make sense. Will be happy to hear your thoughts on the book!

AK71 said...

Hi waikaye,

Thanks for the book recommendation.

Too many things to do right now but I will keep it in mind. ;)

pukermon said...

Hi AK,

I don't know how much you worry about the dividend and bonds yields changing from year to year. In good times, the yields are good and one gets more passive income.

In bad times, the yields are reduced and we need to survive in both good and bad times.

But since your passive income double, you should be OK even if yields are halved, which is extremely unlikely.

AK71 said...

Hi pukermon,

I am much more comfortable now.

Definitely not worried anymore. :)

I was worried during the pandemic because my sources of passive income reduced or vanished. -.-"

I blogged about it too in mid 2020:
Worried as dividends and interest income reduced.
Wednesday, June 17, 2020


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