Millennials get a bad rep for being financially irresponsible, but that’s not entirely true. However, it is true that our goals and priorities have shifted from those of our parents and grandparents. While the generation before us worked hard during their youth to save up for a comfortable retirement, most of us millennials have made peace with the fact that we’re probably going to need to work or earn money in some capacity till the end of our lives.
So, why wait until we’re old to enjoy life? Millennials want to make the most of our time through travel, entertainment, and pleasure throughout our lives. We also know that financial flexibility is the key to living these dreams; you can’t travel if you’re stuck to a desk 5 days a week! So as job norms shift, people look for ways to earn money in “unconventional” methods. As the younger generation takes over the workforce, you can see this being reflected widely.
So, just how can millennials achieve financial freedom and live life the way they wish to? Passive income may be the solution to this problem, according to a 27-year old entrepreneur and real estate guru, Diego Corzo.
What is Passive Income?
Diego Corzo picked up the book “Rich Dad Poor Dad” at the age of 21 and his life was never the same. He became obsessed with the idea of passive income. After a few years of trying to and succeeding in earning passive income, he has now turned his attention to helping other millennials do the same.
When people are in need of some extra cash, they look to side hustles, part-time jobs, or even taking on a second job. The majority of the people in the world trade their time for money. Getting paid by the hour and barely earning enough to get by even then sounds like a nightmare, but that’s the reality faced by millions of people today. But what if you could earn enough money to pay your bills, debt, and fund a comfortable lifestyle without actually working?
Simply put, passive income is money you can earn without actively working or being involved in any major capacity. It’s money you can earn while you’re asleep. Sounds like a dream? Here’s how Corzo says you can make it a reality!
There are several ways you can earn passive income, but house hacking is probably one of the best. Not only does it allow you to earn some extra income and basically live for free, but you’ll also be a homeowner by the end of it!
The basic premise is that you own the house but live with roommates. The rent you collect from them would go towards everything from the mortgage to bills and payments. Whatever you have leftover is your disposable income and can be used for entertainment, travel, or whatever your heart desires. Sounds too good to be true, doesn’t it? However, there are so many millennials, like Corzo, who are doing it.
He says that even the common belief that you need a 20% down payment to purchase a house isn’t true. Homeowner grants and other financial programs can get you into a starter home with very little money upfront. “I started with zero in the bank after I graduated from college at age 22,” Corzo said. “By age 24, I bought my first home to house hack, and I have been living for free ever since. Two years later, I was able to quit my full-time job, and now I own eight properties.”
You Don’t Have to Stop There
While house hacking is an amazing source of passive income, millennials have a lot more at their disposal when it comes to achieving financial freedom; it only matters that they know well enough to make use of the right ones.
House hacking is one of the least expensive ways to get into real estate. Even if you feel like that’s not the career you want to build, you can sell it off at a later date or just own that one property.
“A lot of people don’t pull the trigger to start investing in real estate because they get overwhelmed with the unknown,” Corzo said. “House hacking allows you to get your feet wet because you are buying a property for yourself that just happens to have extra rooms that make you money.”
With house hacking, you are able to lower your living expenses in a manner that would be otherwise impossible. An average American spends about 30% of their income on housing, but for a person who house hacks, that means they have 30% of their income to do whatever they want. They could invest it in a kind of lifestyle they want or invest in other avenues to earn more passive income.
This could mean purchasing more properties to rent out, like Diego, who’s 8 properties now bring in about $4-5k per month. This covers all his living expenses, leaving him completely financially independent!
Other Ways to Earn Passive Income
There are many other ways to earn passive income; many of which you’ve probably heard of but never thought of as passive income. From things like starting a blog or YouTube channel to affiliate marketing and even peer-to-peer lending. Investing in stock dividends is also a popular method of earning passive income.
You could create an online course, write music, publish a book, put your photos on stock photo websites, etc. These are all things that require a chunk of work which you do at once but reap the benefits for years to come.
Financial Freedom is at Your Fingertips
By now, we hope you’ve got some sense of how you can achieve financial freedom, and also that you understand that anyone can get there if they work smart. Even if you graduated from college with a hefty debt, even if your job doesn’t pay that well, even if you haven’t explored passive sources of income in the past – it’s never too late!
Passive income isn’t a magic solution to all your financial woes. Like any successful financial plan, you need to be ready to play the long game. Becoming financially free requires improving your credit scores, managing personal budgets, getting the best loans, and creating sources of passive income. If you manage to do it right, you can end up living every millennial’s dream!