I came across two recent articles online pertaining to 2 people who has the privilege of having an income of $20,000 per month.
I would consider the income to be passive in both cases.
1) Case 1: The Slow and Steady Dividend Cash flow millionaire
In the first article: How A Janitor Became A Millionaire (read here), it talks about Ronald Read, a former janitor and gas station attendant in Vermont, who died in 2015. He surprised everyone by leaving an $8 million fortune to his local library and hospital.
How did he amassed so much wealth? Well pretty basic, besides being industrious and frugal, which you may have guessed, he had invested in the stock market throughout the years.
Looking at the top ten stocks in Read’s portfolio, they are simply basic stocks and businesses. And every one of them is a dividend paying stock. By the time he passed away in 2015, at age 92, his entire portfolio was paying him around $20,000 a month in dividends. That’s $240,000 a year in income.
The irony is while he is alive, nobody knew he was that rich. From the way he dress, to what he eats and where he frequent – people thought he was poor.
He drove a used Toyota Yaris, tailored his own coat with safety pins, and chopped his own firewood. He maintained this frugality well up into his 90’s.
2) Case 2: The Tai Tai
In the next article: I took my wealth for granted – then my husband told me we were bankrupt (read here), we have a 40 years old lady who married a wealthy businessman husband 15 years ago.
Her husband had inherited a lot of money from his late father and also owned several businesses, so compared to the average Singaporean, they were relatively well off.
The family (her husband, her and their 12 years old son) lived the high life: Staying in a landed property in a prestigious district, drove luxury cars, and had holidays thrice a year at exotic resorts.
She did not work, as she there is no need to. Simply said she was a lady of leisure.
She didn’t think twice before splurging on designer goods or had no qualms spending thousands on catering whenever they entertained at home.
However, in 2018 her husband’s businesses began to suffer. A lucrative deal he was working on fell through.
Eventually, they lost much of their wealth.
They had to vacate their home and sell most of their high-value possessions within months – vintage watches, artworks, designer bags and jewellery. They also had to let go of their luxury cars and make do with a standard family vehicle.
She used to spend about $20,000 a month on herself alone but now it is down to $1,500, sometimes less, and she tries to save most of it because she does not know how long it’ll take for them to get their finances back on track.
Well, like I mentioned earlier, I view her income as passive, as it is from her hubby.
In gist
2 different persons with two different lifestyle but one common amount per month. And two different endings.
For me, I am not sure if I will ever get to see an income of $20,000 a month. I am taking little steps towards it.
I reckon even if I do have that income (passive or active), I would put most of it into my stock portfolio. Hopefully generate even more passive income. Even with a mountain of wealth, with a high expense life -style, wealth will quickly be depleted. And it can always be suddenly taken away from us if we take it for granted (like in the case of the tai tai).
With more passive income, I hope to do more of what I love. And frankly I don’t think I will splurge on luxury goods or live a high life. I reckon frugality has kind of become part of my life.
I guess to me basically wealth translates to a better aspect of the two H (Health and Happiness). Living a healthy lifestyle (both mentally and physically) and doing things that bring me and others around me joy, while spending more time with my loved ones.
It does not necessarily mean a high life.
Do like my post if you have enjoyed it!! Click the star below.
A Pen Quotes 