WHY I PAY MYSELF FIRST, MY INVESTMENTS, AND WHY I WANT TO MOVE TOWARDS A PASSIVE INCOME CAREER IN THE FUTURE
Filed in Finances
**DISCLAIMER, I am NOT a financial advisor or investment broker. This is what I personally do with my investments, not what everyone should do and this is not investing advice**
It is important to pay yourself, by putting money into a savings account or into investments every month first before you spend money on “extras”. I do both at the start of the month. I have an automation set up for my Roth IRA contributions to come out of my checking account on the 1st of the month. I also have this set up for a UTMA account for each of my 3 boys. I then add to our Emergency Fund every month as well. The amount of money I add to my Roth IRA and to the boys’ UTMA is the same every month. The amount of money I add to my Emergency Fund fluctuates and I put that money into my savings account manually.
Pay yourself first, by setting up automation into your retirement and savings account.
I know myself too well, if I didn’t have my retirement contributions automatic, I would not be consistent in putting money into that account. Many of us have good intentions of saving for retirement, our kid’s future, our rainy-day fund, our vacation fund, etc. but it takes dedication and willpower to be consistent with doing this. Automation helps keep my retirement and savings goals on track.
I can stop these automatic transfers at any time if I need to. If for some reason I can’t make my $600, ROTH IRA deposit for a month or two, I can stop it, momentarily, and then restart it if need be. However, if you are looking to do that, I would caution against this. It would be too easy to hit pause on retirement savings as this doesn’t feel like a “need” and I would be able to talk myself out of this and talk myself into putting that money towards many other things. However, my future self would not appreciate that.
Saving for retirement is so important. Too many Americans are not saving enough, or they are NOT SAVING ANY money for retirement. This makes me nervous! I have worked with end-of-life patients as a hospice nurse and too many times I have seen where people did not have enough money to pay for their nursing home bill or their assisted living bill. There were so many of my patients that wanted to stay home and hire a part-time private caregiver to care for them in their homes, at the end of their life, but they couldn’t afford this. My heart broke for them. There were people who worked hard all their lives and they couldn’t afford to have someone help them in their home in their final months, weeks, or days. So, remember, it isn’t always the amount of money you are putting into your retirement account each month, it is that you ARE putting something into your retirement account each month. Stay consistent and start sooner rather than later!
Put money into retirement accounts early so they have time to grow through compound interest
I still feel like I do not save enough for my retirement. With people living longer, the years they spend in their retirement years are increasing, so people need more money for retirement. Also, with the price of everything going up and up, retirees will need more and more money for retirement. The way compound interest works is the longer the money is in the stock market, the more returns on investment (ROIs) you should get back.
When I went to start saving for my retirement, I didn’t know how much I should save per month. I had read some experts say to use a percentage of your income. Some experts say to use a set number per month that you should be investing. Some use a set amount as a goal you should have in your retirement account at the age you want to retire. I basically just picked a number out of thin air and started there. I have gradually increased that amount every year until the end of 2022 when I was finally able to max out my Roth IRA. WHOOP WHOOP! My max amount for my ROTH IRA is $6,000 per year. I also have a 403B retirement account with my nursing job company, which I put some money into. They do a match up to 3%, so I put in 3% of my paycheck each month. I then get the 3% that they match and that is FREE money! I would like to get into other investments, like real estate, but currently, I do not have any real estate investments.
I would also love to have a stream or a few streams of passive income someday. This would be income that I receive, that I don’t really have to “work” hands-on for. It might be something that I work hard to create, something like an online course, or downloadable templates that I can then resell over and over to others without having to keep re-creating them.
Right now, nursing, photography, and financial coaching are my 3 types of jobs, I only get paid when I work. I must be actively working at those jobs to bring in an income. This is how most people earn a living. This is a wonderful way to earn an income, but I really want to be able to earn some money “while I sleep,” while also helping people. My number one career goal in life is to be able to help as many people as possible. This is where an online course would be a great idea. I could help many more people by offering a digital course on finances than I could teach them 1:1, since there are only so many hours in a day that I can work and coach them 1:1. Side note- my husband’s jobs are also super hands-on, farming and snow plowing. So, we know hard work and being paid an hourly rate.
I am also not getting any younger. My body cannot endure the long hours on the floor of the hospital as a nurse. Luckily, I am not in a nurse position where I must be on my feet for 12+ hours anymore. Those were long and tiring years of my nursing career. Being a nurse is hard work and every single nurse is AMAZING! My photography job and clients are also wonderful, and I truly love that business of mine! However, there can be a lot of bending, up and down and squatting maneuvers during my sessions. I tend to get sore after a newborn session or after multiple other sessions in a day. I know that eventually (hopefully many, many years from now) I won’t be able to do these sessions any longer. I am looking for ways to bring in an income for myself that is a little more hands-off. Now, don’t get me wrong I am not afraid of hard work. In fact, I love working hard, contributing to society, helping others, and being hands-on. I just know that someday, I won’t be able to tolerate these types of jobs.
Photography is such a passion of mine and I am so blessed to be able to have it as a side job
I think everyone should look into starting or developing a type of income stream that is passive. How cool would it be to be paid while you sleep? I know lots of people make a passive income by blogging, writing a book, Affiliate marketing, online courses, rental income, print-on-demand online stores, vending machines, and downloadable templates. Some of these are more “hands-off” than others. But you get the idea. You put in the hard work in the beginning, you might have to finesse the business in the middle and then you get to enjoy the “fruits of your labor”. I understand that not everyone has the creative juices, money to get started, or the work ethic and dedication it takes to get some of these passive income streams off the ground and that is ok.
For now, I am happy working as a liaison nurse. Working part-time running my photography business and growing my new Financial Coaching business. I am truly so blessed that I get to do all 3 while running my 3 boys to all their hockey and baseball games. I do not know what the future holds, but I am happy to know there are options. I also love the fact that I can do some of my work while waiting for the boys to get done with their practices. Many parents drop their kids off for their practices, go home or run errands, and then come back and pick their kids back up. I live too far from town to run home, so I tend to stay at the hockey rink and work. This gives me time to get my work done, while also watching my kids skate. It feels like a win-win!
My son, Bryson pitching for the first time. I am so happy to get the opportunity to be present at his games and most of his practices!
Remember, pay yourself first, each and every single month. Set it up automatically so you don’t have to remember to transfer the money into your retirement or savings accounts. Start now! Don’t wait until the perfect time to start saving for your future. There will never be a perfect time, now is the time!
