Creating the lifestyle you want requires a willingness to go against the grain. You’ll have to buck the status quo as you pursue financial independence outside of the norm. It takes tenacity, measured risk-taking, and creativity to become a lifestyle investor.
However, determining what investments can get you closer to the future you envision can pose a challenge. Misguided and disingenuine advice is ever-prevalent online. Get-rich-quick schemes pose temptation, especially if you’re eager to escape the daily grind. Thankfully, there are reliable and reputable ways to accomplish lifestyle investing and financial independence for life.
1. Monetize Your Online Presence and Expertise
Making money online is possible for nearly everyone, and it’s one of the easiest ways to start building a passive income stream. And with a low cost of entry, it’s also one of the most achievable. To get started, think about your skill set, habits, and goals. Next, research what’s currently available in the marketplace to determine how you’ll differentiate yourself. Target a solution that represents a need in the market and that holds your interests enough to launch.
Individuals whose traditional careers give them unique perspectives or skills can leverage their expertise online. Creatives can create digital assets like photography, graphic design, and templates. Using Pinterest to gain interest from potential buyers, sellers can point viewers to their Shopify site. Most of the work is done up front, with social media engagement and interaction driving the rest.
For those whose personal stories, habits, or dreams garner particular interest, social media storytelling can provide opportunities. If your off-the-grid lifestyle inspires others to explore sustainable living, leverage your experience to help others and earn income. Share tips, recommend products, and engage with your community to build trust while benefiting from affiliate marketing.
If you’re worried about people being turned off by your earning commissions off of purchases, don’t be. Today, practically everyone is leveraging online marketing, affiliate sales, and sponsorships. Look closely at your local news broadcast – the product mentions on camera and online often point to affiliate links. Leverage your platform with confidence, using affiliate marketing to help your audience and generate income.
2. Let Real Estate Help Build Your Portfolio
Real estate is one of the most consistently appreciating assets available to individuals. Individual wealth is often bolstered by the growing value of a primary residence, but lifestyle investors take it up a notch. This can be accomplished by renting out your primary residence and purchasing a vacation rental or a single-family home.
One of the best ways to build your portfolio is to focus on purchasing real estate using a buy-and-hold strategy. With this strategy, investors purchase a property to retain ownership for many years. This approach can help investors build a reliable income stream with a lower point of entry.
For example, a single-family home in an area with good job growth and schools could become a reliable rental. Monthly rental income would cover the property costs and repairs while offering potential tax savings for the owner. As Lifestyle Investor Justin Donald says, “Real estate, especially rentals, can provide you with a steady cash flow that you can invest into buying other rental properties and homes.”
Skip the temptation of moving toward a house-flipping strategy though. These projects require a significant outlay and put a great deal of pressure on the owner to turn a profit. Repairs, renovation, and fees associated with a quick purchase and resell eat away at profits. Even if you’re qualified to make the repairs or upgrades yourself, the time required is significant. Instead, look for real estate opportunities that offer lower risks and higher long-term rewards that’ll help you secure financial independence.
3. Leverage Stocks and Bonds to Grow Your Wealth
One of the more familiar investment options you may already have a stake in is stocks and bonds. While one of the less revolutionary ways to become financially independent, leveraging the stock market just makes sense. In its current form, the S&P 500 has yielded average annualized returns of 11.88% from 1957 to 2021. Timing of entry will dictate your realized gains or losses, but the message is clear – stocks and bonds deliver.
Create a diversified investment strategy considering your personal risk tolerance and goals. Consider your age today and when you hope to become financially independent. If you have a partner, children, or both, you’ll need to consider their financial needs as well.
Research bonds as a reliable source of income with less risk. In recent years, government-issued I-bonds have been of particular interest to investors. Issued directly from the U.S. Treasury, these bonds provide investors with a way to protect their investments from inflation. There are annual limits to how much one can invest in Treasury bonds, so it’s not a one-and-done solution. However, the inflation protection offered, 30-year growth trajectory, and generous rates earn them a place in your portfolio.
Diversify Your Strategy for the Best Long-Term Results
The saying “don’t put all your eggs in one basket” isn’t just a takeaway from your grandmother. It’s sage advice that rings true when it comes to lifestyle investing. Relying on just one source of income puts your financial stability at risk. Instead, diversify your strategy and plot your escape from traditional employment with care.
As many lifestyle investing strategies require an initial investment, use your primary income as fuel for your future. Adjust your budget to allow for investing, trimming unnecessary expenses in exchange for foundation-building investments. Once your lifestyle investments begin providing income, you’ll be able to determine your baseline needs. Soon, you’ll make a clean exit from your old life, making way for a lifetime of financial independence.
Disclaimer: This content does not necessarily represent the views of IWB.