Achieving Financial Freedom One Income Slice At A Time

Experiencing Financial Freedom Dream House In Kahala, Oahu, Hawaii

Experiencing Financial Freedom

If you ever want to be absolutely free, you need to develop multiple income streams so that when the inevitable change happens, you’ll be covered.  I first recommend you start with the end in mind. What makes you happy?  From this question, now you can derive how much money you honestly think will make you happy.

Once you’ve digged deep to answer these two important questions, you can then start building your income goals.

What makes me happy?

Family, friends, experiences, travel, freedom to say and do what I want, sports, relationships, the online community, hot tubbing with drinks, food and enough money to not have to worry. Good old nostalgia really makes me happy too.

What makes me unhappy?

Racists, bigots, haters, lying politicians, bad bosses, cronyism, inequality, people who say one thing and do another, thieves, and zealots who impose their will on others.

How much money do I need to achieve what makes me happy?

Anywhere from $3,000 to $15,000 a month after taxes to account for a single life to one that provides for a family of four.

I really don’t need much to be happy if I’m supporting only myself and have no debt.  I was super happy living on nothing while in school, so $3,000 a month after tax would be fine.

$15,000 a month after tax is a large nut that equates to about $235,000 in gross income a year, the income level where I think maximum happiness is attained. With $15,000 a month, I can afford private school tuition for two if necessary, go travel 8 weeks a year, get huge and eat whatever I want, have a paid off car, live in a comfortable home practically anywhere in the world, and continuously save for a rainy day. Furthermore, $15,000 a month after tax can be used to help my parents in case they need financial help for whatever reason.

Think about an after tax monthly income number you’d like to achieve and let me know. For now, it’s time to open up the kimono and see what can be produced after over a decade of saving and investing. This is a long post, so make sure you go to the bathroom first!


The first step is to save aggressively. I’ve been saving 50%-75% of my after tax income every year for the past 13 years. I try not to be a miser and have done my best to try and spend money on things I enjoy e.g. vacations, food, a home, and tennis. Where I did “sacrifice” was not buying higher-end new cars (all but one were second hand and under $20K) and going on less exotic vacations. Amanpulo I’m coming for you eventually!

I’ve predominantly invested all the savings in long-term CDs that have returned 5.5% all the way down to 2.5%. Currently, my risk-free return is averaging about 3.75-4% a year. These aren’t sexy returns by any means, but I sleep very well at night and have also never lost money in this portion of my wealth for the past 13 years. A smaller portion of my savings goes towards my trading account.

CD Interest Income: ~$2,800/month. My CD interest income can almost fulfill my lower end of my target income range if I were a single guy. This is income that will keep coming automatically for another 5-6 years and I don’t have to do anything except renew come expiration. I’m not worried about interest rates getting crushed during a reset, because if they do, that simply means there is little inflation. The best thing right now is that my primary mortgage at 2.625% costs less than my risk free CD return of 3.75%! Thank you for now, BenGenie and Santa Yellen. Whenever a CD interest yields more than the 10-year treasury and has a shorter duration I am an aggressive buyer.

Online Interest Income: I’ve currently got about $50,000 in a high yielding online interest income account at ~1%. Although that’s only $500 a year in interest, that’s still 100X better than the national 0.1% average money markets now provide. It’s easy to withdraw and deposit money in an online savings account nowadays. Don’t let your liquid cash sit in a bank that pays you nothing!

Dividend Income: ~$1,200/month. I have not focused on dividend income because: 1) the underlying values of these stocks have fluctuated so much over the past 5 years, and 2) I never withdraw any of the proceeds as I don’t need the income right now.  I’ve focused more on capital preservation and growth instead.  Companies have been cutting their dividends aggressively since 2008 to preserve cash. Only now in 2012 are we seeing signs of companies raising their dividends eg Wal-Mart and American Express.  To be clear, my dividend income all comes from active investments. None of my dividend income comes from my 401K because they can’t be touched until 59.5.

Rental Property Income: ~$1,500-$3,500/month after expenses. The range in income property has to do with a vacation rental which swings huge during the summer and winter months, and fades during the months of May, October, and November.  I’m basically averaging about $2,500/month per year total. The income is very reliable, since everything is well maintained.  One of my rentals was bought 10 years ago, and the rent is over 4X the mortgage interest now. The mortgage can be paid off, but the rate is only 3.125%, and the interest is an expense deduction so I’d rather have the liquidity. Once the rental property mortgages get paid off, then rental income will increase further. Thanks to amortization and operating expenses, the taxes I have to pay on my rental income is next to nothing. I plan to start paying taxes on my rental income after I retire and get into a lower income tax bracket.

P2P Lending: I’m now investing in peer to peer lending with as of 11/2012. They advertise returns of roughly 8.8% as of 1/2/2015 if you have diversified your loan portfolio with at least 50 notes. As my CD interest income declines as they come due in 2014-2015, I plan to invest more and more of my 4% yielding CDs in My goal is to create an additional $500-$1,000 in income through social lending.  If you would like to join me on building wealth as an investor through peer to peer lending you can sign up here with Prosper. I think P2P lending is a great way to achieve 2-3X the current risk free rate of return in a relatively low risk manner.



Base Case Passive Income Chart Financial Samurai

I’m currently at about $6,500 gross a month in relatively passive income that is now being generated. The blue sky column is achievable if it’s a bull market and all my rental property mortgages are paid off in about 5 years. After 30% tax, my base case passive income is around $4,550 a month. The irony is, if I didn’t work for a living, my after tax income would probably be over $5,000 a month due to a lower effective tax rate of 20%!

Another solution is to just move to one of the seven no income tax states upon retirement. Base after tax income will therefore rise to about $5,500/month and $8,800/month for blue sky. California’s 10% income tax is a killer! $4,550 is not bad, but still far short of my goal of generating up to $15,000 a month in after tax income.

At the rate I’m going, I’ll have to probably work another 10 years, so screw that! Instead, I’ve been cultivating other income streams that will allow me to work 2-4 hours a day on my own terms.


I’ve saved up about 17 years (16-18) of living expenses if I retire tomorrow and keep my living expenses the same. The 17 years of savings excludes the use of all passive income. In other words, I could just live off my passive income and never touch my savings if I really started being more frugal.

I’m sure I could cut expenses such as my credit card bill, and sell my primary residence and downsize to make my savings last forever. However, that’s too disruptive and decreases the quality of my life, which is the wrong direction. The plan is to stay conservative, not touch savings, and build passive income to survive.

Remember, the thesis of “How To Retire Early And Never Have To Work Again” is that all one has to do is save 55%+ of their after tax income for 18 years from ages 22-40, and s/he will have 20 years of living expenses covered to not have to work until government assistance kicks in. This is a very conservative assumption since most people will work from ages 40-60 after retirement, and will have various side income streams. Plenty of folks will also find a partner to pitch in and share the expenses.

I’m not including my 401K savings/investments as part of passive income. I treat all government tax deferred programs as write-offs since the Evil Empire can easily take all our money away to fund their egregious spending. The 401K and IRA, if you are so fortunate to not get discriminated by the government to contribute, should be a buffer against your savings.  Max out your 401K and shoot to save at least 20% of your after tax income a month. Here’s how much I believe everyone should have in their 401Ks at different ages.


Tennis Teacher: I can teach tennis for about $40/hour. In fact, I’ve often toyed with starting my own tennis instruction website and supplement my passive income with 80 hours of teaching a month ($3,200).  I’ve also fantasized about being a tennis instructor at the Four Seasons Resort in Bora Bora. Teaching tennis on occasion is nice spending money, but something I do more to have fun, exercise, and meet cool people. Tennis lessons at private clubs are around $80-100 an hour, so in a way, I feel like I’m doing a public service.

Trading Portfolio: I have a trading portfolio which I like to play around with on Etrade to keep me engaged with the markets. Investing is in my blood, and I’ve been doing so for the past 15 years when Ameritrade and Charles Schwab first went online.  There were some major successes and epic failures in the beginning. Nowadays, I’m more conservative, but I can still easily lose money as I can make money.  The reason why I don’t talk about specific stocks and strategies is because I don’t want you crazy kids to follow everything I do and sue me for giving you bad stock advice. Instead, I highlight my market predictions and give you some overarching thoughts as to why I am buying and selling the markets.

Motif Investing is a terrific company based right here in the San Francisco Bay Area. They’ve raised over $60 million dollars from smart investors such as JP Morgan and Goldman Sachs because they are innovating the investment landscape with their “motifs.” A motif is a basket of 30 stocks you can invest in, which are aimed to profit from a specific idea or underlying theme. Let’s say you think new housing construction is going to quicken in the US next year. You could buy a housing motif which might contains Lennar, KBH, Home Depot, Bed, Bath, and Beyond, Zillow, and more in various weightings.

You can buy a basket of 30 stocks for only $9.95, instead of buying them individually for $7.95 through a typical broker. You can build your own motif, buy one of the motifs created by Motif Investing, or buy a motif by a fellow Motif Investor with a great track record. You can even buy retirement motifs, much like target date funds, except you don’t have to pay the 1% management fee. You get up to $150 free when you start trading with Motif Investing. Given my focus on buying winning long-term ideas and ignoring the short-term volatility, I really like Motif Investing’s value proposition for retail investors.

Online: It’s been around six years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now after a lot of hard work. Pageviews have surged to 900,000+ a month in 2015 from 700,000 in the fall of 2014, and 300,000 in 2013.

I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with BluehostYou never know where the journey will take you. Hard work is worth it because it takes no skill.

– See more at:

Personal Consulting: I’ve launched Financial Samurai Online Services. The main service is offering personal finance consulting, career advice, severance negotiation, and resume analysis. After writing over 900 personal finance articles, and reaching financial independence myself, I believe there is demand for financial consultation.

Financial Tech Consulting: In January, 2014, I began consulting for a digital wealth management firm called Personal Capital based here in San Francisco and Redwood City. I love how they are disrupting the traditional wealth management industry with their free, DIY financial dashboard where everybody can management their net worth, track their expenses, and examine their investment portfolios for excessive fees. I highly recommend everybody sign up for their free software to manage their wealth. I’ve been helping build their content and brand online 25 hours a week. It’s been a blast learning about the Silicon Valley world. They just raised $50 million in series D round funding in October, 2014 and I’m bullish about their future for the next 5+ years.


Rich Hot Spouse: One of the secrets to early retirement is having a working spouse. The secret to a happier early retirement is to therefore find a hot and rich spouse! You can do jack doo doo and claim to the world how you retired early, so long as your spouse continues to work and provides you with goodies and healthcare.  It’s no joke that many people make it a mission to look for a wealthy spouse. See: Should I Get An MBA To Find A Wealthy Spouse?

Private Equity: I’ve currently got one private company investment totaling close to six figures. I’ve written it off to zero because so rarely do these private equity companies exit for a nice profit. However, the company has been around for 6 years and survived the financial crisis. Hence, perhaps there is a chance I will not only get my money back, but also get a solid internal rate of return down the road.

Private Real Estate: During the financial vomiting period of 2008-2009, I invested $50,000 into a distressed global real estate fund which was buying property at 15-30 cents on the dollar. The fund was a private offering to a certain group of accredited investors. The fund is up about 120% in three years and spits out a reasonable 4-7% dividend yield. Once the fund is liquidated in several years, I calculate a roughly 25% IRR. Looking back, of course I wish I had invested more. It’s just hard to drop dimes when things are blowing up left and right.

The Federal Reserve: Unfortunately for savers and those who seek yield (me), interest rates will be low for a very long time.  I’m thinking for the rest of our lives actually. That said, if the economy really starts growing gangbusters again, the Fed could start raising interest rates, causing a commensurate jump in US treasury yields, which will lead to higher savings interest, CD interest, and dividend yield payout ratios. Everything is relative though, which means prices for goods and services will have also gone up despite an increase in interest/dividend income. The flip side is, asset owners benefit greatly as well.

Primary House Rental: I’ve been wondering whether I should sell my house or rent out my house due to the social media craze which has formed in the SF Bay Area. If I decide to rent out my house and downgrade to a normal 2/2 apartment, I would probably generate an additional $3,000-$4,000 in monthly income after paying rent for my new place. Rents have gone bonkers, especially for single family homes in good areas in San Francisco. The problem is, I love the house and the location. Life is about living in the moment, and I don’t want to live in a crappy rental just to save or make more money. The latest as of 7/16/2014 is that I rented out my primary residence of 10 years for $8,700 a month and bought another house.

Book income: Since retirement, I’ve written a 100-page book called How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye. The book helps employees profitably quit their jobs by providing a framework to negotiate a healthy severance package. I managed to negotiate roughly six years worth of living expenses after engineering my layoff in 2012. Never quit, always get laid off!


Financial Samurai Total Passive Income Streams

With multiple income streams you not only develop financial independence, you also achieve as well! You don’t have to worry about pissing anybody off anymore, or feeling guilty about doing things for money you otherwise wouldn’t do.You’ve gone from being someone who is second guessing everything, to someone who does what feels right.  Nobody can ever take away your passive income you’ve spent years building.


With multiple income streams you not only develop financial independence, you also achieve mental independence as well! You don’t have to worry about pissing anybody off anymore, or feeling guilty about doing things for money you otherwise wouldn’t do.You’ve gone from being someone who is second guessing everything, to someone who does what feels right.  Nobody can ever take away your passive income you’ve spent years building.

It takes a damn long time to build a livable passive income stream nowadays thanks to Ben Bernanke’s monetary benevolence.  As a result, CD interest income is not good enough and my focus will be more towards online income, rental properties and creating a larger dividend portfolio. That said, I think there’s a mini-bubble in dividend investing, so I’m not jumping head first just yet.

I haven’t been paying too much attention to my passive income breakdown until now because my work income has always been my primary focus and only about 25-45% of that income after tax is what I need to live. However, if I truly plan to pursue the life I *think* will make me even happier, then its time to buckle down and develop more side income since my day job income will disappear. $5,000-$8,000 a month in after tax passive income is good, but it’s still $7,000-$10,000 away from what I find ideal.


It’s important to not co-mingle your funds if you want to build significant multiple income streams. With passive income, you’ve got to pretend you’ve got no other income. That way, you stay focused and don’t start getting lazy with your mission to achieve freedom. If you make $100,000 a year at your day job, pretend you make ZERO so that you give everything you’ve got to find other income sources.

If you make $2,000 a month from your online properties, ignore it completely in order to really develop your day job income, rental income, dividend income, interest income and so forth. Compartmentalize!  You must compare apples to apples eg not passive income to online income. Everyday I wake up, I pretend I have next to nothing in my bank accounts, trading accounts, 401K, and Paypal. As a result, I’m super motivated and find the journey incredibly rewarding and fun.

I recommend all of you to start saving aggressively, build a CD ladder, invest in rental properties, look into dividend yielding stocks, work harder at your jobs, leverage your skills to teach others, and start a small business. You’ve got to do your due diligence and pounce on investments you like with focus. Build buffer after buffer of income streams.

I can promise you that if you do all these things, in 10-15 years, you’ll be set for life. And if you can’t figure it out and need guidance, let me know!

Recommendations For Achieving Financial Freedom

Manage Your Finances In One Place: The best thing you can do to achieve financial freedom is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to track my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing, how my net worth is progressing, and where my spending is going. The best feature is the 401K Fee Analyzer which has allowed me to save over $1,700 in annual portfolio fees I had no idea I was paying. There is no better free platform on the market that has helped me more than Personal Capital. It takes less than a minute to sign up.

Check Your Credit Score: Everybody needs to check their credit score at least once a year given the risk of identity theft as well as the importance of having a good credit score when borrowing money, apply for a mortgage, and applying for a job. 30% of all credit reports are wrong! For over a year, I thought I had a 790ish credit score until my mortgage refinance bank on day 80 told me they could not proceed due to a $8 late payment by my tenants from two years ago! Thanks to the late payment, my credit score was hit by 110 points to 680 and I could not get the lowest rate! Check your credit score for free here at and protect yourself. A credit score is important for potential job opportunities and getting the best rates on mortgage loans, car loans, and credit card loans. The industry average credit score for rejected mortgage applicants is 729! Where do you stand?

Fully updated as of 3/2/2015. Make this year the year you make more, save more, and grow your net worth! 



Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

You can sign up to receive his articles via email or by RSS. Sam also sends out a private quarterly newsletter with information on where he's investing his money and more sensitive information.

Subscribe To Private Newsletter


  1. says

    I do have a post outlining my passive income but no figures:

    Looks similar to yours in structure. Obviously with less funds. It would be really uncomfortable for me if any stranger on the street or random ppl who knew me in real life, knew exactly what I owned, what I earn and what I have.

    Strategy A.
    With an extra $250k on top of what I already have:
    * $200k deposit to buy a $1m house. (80%LVR)
    * $50k into direct stocks (banking (CBA/WBC), mining(BPT/BHP), FMCG mainly food companies like Wesfarmers, Woolworths, Coles)

    Strategy B.
    If I had nothing at all and you gave me $250k tomorrow (dream on right?!)
    * $100k deposit on a $500k apartment (80%LVR)
    * $80k deposit on another $400k apartment (80% LVR)
    * $30k in stocks (see above for allocation)
    * $24k three months emergency fund placed in mortgage offset account(3 months of two mortgage repayments plus strate levies for both properties $18k, 3 mths living expenses $6k)
    * $16k left -> save that for building up another deposit/down payment for either a studio/1or2 br apartment or a house

    What would you do with $250k in similar scenarios?

    • says

      I love how you say you’ll buy a $1 million house! Nice!

      It might be bc of my phone, but I can’t tell from your charts what is your passive income amount, current savings, and income?

      I’m thinking of investing $200,000 in P2P, but I need to meet with someone from LC r Propser first. I’ll keep 25-50k liquid just in case I see a stock investment I want to buy.

      • says

        Sounds nice but for $1m around our target suburbs, it buys an old dingy house close to the station or a renovated house further away from the station:

        Our roads are so congested it’s like a parking lot every single day.

        I’m not going to post my #s in public. Will send you some breakdowns in an email. I’m sure you’ll perform due diligence on P2P providers before investing your funds with them. Don’t know if you actually need 25-50k for liquidity since you’ve got all the over $800k in CDs (not sure how your US CDs work but if they’re equivalent to TD over here then ok, fair enough).

        • says

          You can withdraw/use CD interest income penalty free, however you can’t withdraw the principal from CD early without facing a penalty.

          So yes, I guess you’re right. I perhaps wouldn’t need 50K in liquidity since I can withdraw $33,600 a year and have the various other sources of income.

          That said, I love to have dry powder to make bets when I see a kink. There are lots of kinks, and as I wrote above, I wish I bet WAY MORE in the private real estate fund eg $200,000, instead of just $50,000. I was stupid and too chicken in retrospect.

      • David Scott says

        Sam – i wonder about the true definition of financial independence. i’ve read that it occurs once your passive income eclipses your expenses. but in reality that definition leaves no wiggle room. i have 30% more dividend and interest income than my annual expenses. i reinvest the 30% surplus to compound it. is that enough of a buffer over time in your opinion?

        love the site!

        • says

          Very impressive achievement! I would say you are financially free. The question is, are you actually doing what you want with your free time every day? That is probably an added variable.

          If you’re still working a job you don’t feel comfortable leaving yet, for example, then are you truly financially free?

          What is your situation beyond your passive income?

          Welcome to my site!


  2. Brian says

    Am I missing something? How are you generating $2800 per month on CD interest income? CD rates are down to 2% now. Even at 5% with daily compounding, you would have to invest over $600,000. At 2%, over a million. Unless you are including the initial deposit as income.

    • says

      There you go. You aren’t missing anything at all.

      From the post:

      “I’ve predominantly invested all the savings in long-term CDs that have returned 5.5% all the way down to 2.5%.  Currently, my risk-free return is averaging about 3.75-4% a year.  These aren’t sexy returns by any means, but I sleep very well at night and have also never lost money in this portion of my wealth for the past 13 years.  A smaller portion of my savings goes towards my trading account.”

      • brian says

        Ok FinSam. This website is awesome! Its a confidence and enthusiasm builder. Thanks for the response and confirmation.

        I just started buying some 3 year CD’s, trying to create a ladder program. I’m not very impressed with the returns, but at least its safe. Stocks can lose 5 years worth of gains in one day.

        I’m thinking about temporarily abandoning the CD’s and purchasing a rental property while prices are low. Passive income streams.

  3. says

    You shouldn’t be so rough on yourself. In hindsight, everyone would change their historical actions (if they were wise). What if instead, that private r/e fund bought in Detroit or Philadephia or pretty much any of the dodgy US states that are undergoing structural unemployment? Consider yourself fortunate to have avoided those bad investments. I personally know some friends who have lost over $100k in capital in the last 4 years. Aggregate loss across the three I know is $350k loss.

    In hindsight, they would have exited all their trade positions, all their margin loan, all their CFD trades and liquidated their ‘long term’ positions. Thanks for the enlightment. US CD=OZ TD in its features. In light of your plans, it would be a good thing then to invest the $200k and retain $50k for a diff investment.

    • says

      I’m really not being that hard on myself. At least I put some capital to work in the downturn instead of runaway like a little baby!

      I’ve lost $100K in capital before, and it’s not pretty. However, I’ve also gained that amount and more. It all becomes kinda funny money for a while, and you’re just trying to outperform the broader averages.

      • cord62185 says

        Whats your opinion on my earlier post?

        “Awesome points. I don’t understand you not paying off the mortgage.
        e.g- Mortgage 300k*.03175=$9375 interest.
        $9375*.35(tax rate for this example. Actual is probably lower) =$3281.25
        So you pay the mortgage company $9375 to keep from paying the government $3281.25?”

  4. cord62185 says

    Awesome points. I don’t understand you not paying off the mortgage.
    e.g- Mortgage 300k*.03175=$9375 interest.

    $9375*.35(tax rate for this example. Actual is probably lower) =$3281.25

    So you pay the mortgage company $9375 to keep from paying the government $3281.25?

  5. MacroCheese says

    Do you include the cost of purchasing your own health insurance when calculating future living expenses?

  6. says


    Out of curiosity and if you don’t mind: how old are you Sam? You may have posted this somewhere else on blog so forgive me if redundant. As i read i can’t help but wonder and appreciate your feedback. I am early 30’s

    Congratulations on your sucess toward FI as well. $15k passive is a lofty goal and i have no doubt you’ll get there. Since you are clearly a driven individual have you put a launch date on your consulting idea? Are you thinking of getting or already have a CFP, CFA or any Series licenses e.g. 6,7, 65, 66? Thanks

    • says

      Hi Ken. I’m in my mid 30’s. I’m halfway to my $15K/month passive income goal, and that excludes all other incomes besides CD, rental, and dividend income.

      Because online income takes work, I’m not including it as passive, even though it’s a lot of fun and is my 2nd largest income source now!

      BTW, how did you find my site?

      • says

        Google searches regarding retirement. I found you months back but never commented as usually sites like these don’t accept guest comments. I was pleasantly surprised to see when i clicked submit it posted something! Cheers to your open format as it helps greatly to improve collaboration and idea sharing. Been crawling around your site for a good number of hours now and will def check back. Email me if you ever open for affiliate type of marketing or featured guest posts etc. I have a day job, do active trading and have some entreprenurial endevors as well. Passive income is key to getting out of the rat race so to speak. Time IMO is the most precious commodity we have and money is a mere tool to create the perception of more time.

  7. Supermrh says

    “If one can get their passive income to a level which makes them happy, collecting unemployment benefits after paying all those taxes for all those years is a logical fantasy.”

    The suggestion here seems to be that unemployment can be considered just one of many income streams and that is alright. This just seems plain wrong to me.

    When I think of the reasoning behind unemployment checks, I think of people who unexpectedly lose their jobs and need some money to stay afloat while they are actively working to get another job. Maybe the actual letter of the law is different (though I think the law requires you to honestly say you are searching for another job) but even if it is I would propose that it should be changed to reflect this ideal. In the meantime I propose civil disobedience in the form of not taking unemployment if you don’t really need it. If you’re with me please update your post (or write a new one). Maybe something along the lines of “just cause the government does/does not allow something doesn’t make it right”.

  8. flat_broke says

    A few questions around your focus on CDs, rentals, and dividends:
    +CDs – aren’t you afraid of inflation eating away at the money here? Seems like you’d be better off in a stock/bond portfolio.
    +Rentals – it sounds like your focus is on owning rental property, do you think you’d be more diversified with a REIT?
    +Dividends – I’m assuming you are large cap focused on a few companies. Don’t you think a mutual of dividend paying stock would be more diversified?

    Sure you might hit a homerun with the rental / dividends focus, but what is the risk you are taking on? A few large companies can fail, a local rental market can crash, but diversified mutual funds should offer less risk (and less headache).

    I’m trying to fit your strategy above with my strategy (401k / IRA / taxable / pension). I’m a heavy index / mutual fund person, and it seems like these aren’t your primary targets. They almost sound like “nice to haves”, almost like I treat social security. Thanks for helping me see your perspective. ;)

  9. says

    To me passive income is the “holy grail” so to speak. I can work on MY TERMS and my efforts and epic successes are mine to celebrate. When something goes right I get income generated regularly without any effort. Only effort is (if any) needed at the beginning, when you setup.

  10. Heather says

    Hey, Your so right.
    Your message is to much to absorb. The one thing I got was that you are in a win win financial bliss! Now if you could break it down one slow step at a time that would be helpful;or maybe I could teach guitar lessons to you at 40.00 an hour . Wait maybe I could teach you how to drive a truck with air-brakes, ah wait maybe teach you how to cut hair , do a manicure, pedicure. I hope I haven’t subcribed to anything that will take any monies away.Looking forward to a reply from you

  11. Katie says

    Hi Sam,
    Really Great article! I just had a question about how paying off debt other than your mortgage factored into your plan over the past 15 years. I am getting married soon and I want to start saving 50% of our income (investing some), but my soon to be husband has 10K in credit card debt, and I have student loans and a car payment. Did you focus on paying down debt first? It seems to me that since I am not going to get 6% (my student loan rate) on a CD or a savings account, I should pay off our high interest debt fist and then start working on multiple income streams.

    • says

      Hi Katie,

      Yes, I focused on paying off my no mortgage debt first. I never had any revolving credit card debt as I always paid it off every month. I did have about ~$40,000 or so in student loans which I paid off over 4 years. It felt GREAT to pay off the last $10,000!

      With 6% interest rates (mine was 2.8% for student loan), I’d probably use 80% of your free cash flow to pay off the student loan debt, and 20% to build your savings.

      Good luck!


  12. Jeff says

    I enjoy reading your entries and find that they get my mind going with lots of possibilities for the future. Your concept of passive income is great and I think that it is a great oppurtunity for everyone. My wife and I are finally in the position to save (~$4,000/month) and have been doing so for several months now. I would love to save over next 6-7 years with a goal of about 300-400k by age 40 so that income could be used to pay our living expenses with passive income. My biggest challenge is where to start. We both love our jobs and fortunately work in the health care field. That means that I have no background or knowledge of finance and use logic and intuition as a basis for making decisions as oppose to education and experience. Given the info, where would you start putting money?

  13. says


    Nice to see some commonsense advice with building passice income, and lifestyle design. I think to many are flowing in the wind, and are ready to be smacked in the mouth when it comes to retirement age…


  14. Ryan H says

    I have taken a keen interest in personal finance over the last few years. I have a pretty solid salary ($135k). I currently max out my HSA, 401k (5% match) and put as much into a Roth as I am eligible (about $2200/yr). After reading your blog, it is clearly apparent I should be saving MUCH more. I started working full time at 25, and am currently 28 with $57k in my 401k. My net worth is about $80k. If you were at a similar age and salary, how much would you save each year after contributing to an HSA and 401k?

    Your passive income streams (and balances needed to provide them) are flat out disgusting. I love it. HOW did you get there (besides extreme discipline and a no-excuse mentality)? How many years did it take to achieve each?

  15. ML says

    Where can I get risk free CD return of 3.75%? Which bank? The top I can find to save risk free is 0.75% savings account with IngDirect… Please help!

  16. says


    I am so glad I found your site! I have been on my own financial freedom journey and I am glad to find that you have lofty passive income goals as well. I do not want to pinch pennies when I finally pull the plug on my job. I have avoided things like CDs and dividend stocks and focused on trust deeds and multi-family real estate. I am posting my strategies on my blog, so please stop by sometime, you may find something you could leverage. Thanks!


    Deets (


Leave a Reply

Your email address will not be published. Required fields are marked *