Someone we take a lot of value from once explained the difference between “now income” and “future income”.
Now income is money you go out and earn today.
From your job.
Or perhaps, from fulfilling orders in your business that have come in.
From your day-to-day effort to produce immediate income.
But ten years from today you may not want to be doing what you do now to make money.
My father-in-law lived until he was 92 years old.
He had a pension that kicked in at 65.
That’s twenty seven years that he was able to cover with his pension.
He was creating his “future income” when he was in his thirties and forties earning that pension.
And with pensions rarer than flying unicorns these days … we’ve gotta ask …
How much time are you spending on your future income?
Unless you plan to buy a piece of land and farm it well into your sunset years – you’re going to need a fair amount of income to support yourself.
I once told myself that one day I would go back to my high school and change the way guidance counsellors talked about “education and careers”.
I’d explain to the high schoolers that they should map out the lives they want to live and then put dollar amounts to everything.
Want a new car every 3 years? OK, that’ll cost you X.
Want to buy a starter home, then a larger one and you want a vacation property or two. Cool, that will cost you Y.
Want to slow down your pace at a certain age but be able to enjoy Film Festivals, fine Wine, Travel and other cultural adventures. Super-sweet, that will cost Z.
And then they can figure out how much income they need for each stage of their lives.
That way they can map out the salaries of the “careers” they’re looking at to see if it’ll give them the life they want.
Or they can map out the size of business they want to create to give them the money they’ll need.
We can wrap up our little discussion by explaining that you have two problems when you leave high school.
First, you need to figure out how to support yourself today.
Next, you’ll need to figure out how to support yourself tomorrow too.
Work on both.
Ah, I can see it now … we’d be changing young lives everywhere.
We can dream right?
Basically, what we would be doing, is asking them to start with “the end in mind.” (as the famous Stephen Covey quote goes).
And, of course, this “future income” stuff is why we like real estate so much.
Some people misunderstand us and believe that we LOVE real estate and see it as the be all and end all to everything.
We see real estate as a means to an end.
A means to live the life we want.
We see value in creating your own business, to learning the rules of money, to understanding money cycles and investing appropriates.
But it’s why we put up with the hassles of real estate – because the future income of it is so strong.
When debt is paid off on your properties you literally have little money machines cranking out steady income.
And you own them, you control them.
If you find yourself lacking in future income try this…
Carve out 1 hour this week to learn something about real estate investing.
Or, if that’s not your cup of tea, carve out 1 hour to learn about starting a small business (on the side even).
Both of us want as many little “money machines” in our lives as possible.
And sometimes we get so focused on “now income” we forget to add to our “future income”.
Let this be a little reminder to work on both!
Until next time … Your Life! Your Terms!