So you’re all set, geared up and ready to set out on your financial freedom journey. Or you might already been there halfway like myself. Wherever you are in your journey, you might already earned your own first pie of your dividend income. Different people have different ways of looking and utilizing their dividend income. So how do you look at your dividends income that you’ve received?
As a mean of “Expenses” coverage
If you are an investor who just started like myself, you would have found out that the amount of dividends income you’ve received are not big enough to sustain a family living expenses such as traveling but enough to pay off your daily expenses such as food, utilities or entertainment expenses. When I started my journey for instance, I would usually use the dividends received to cover my daily or weekly food expenses. As my dividend income grows, the coverage would expand to utilities and some other entertainment expenses. Now, it can cover a wider range of expenses such as luxury food meals, transportation and so on.
As a mean of “Part-time” income
Some investors may also look at their dividends income as an extra income in addition to their monthly active income from their work. The dividends income are like a part-time worker that helps you earn side earnings while you focus on your full-time job during the day. However, as time goes by, you might realize that your part-time earnings may seem to be an easier and better way to earn than your full-time job. This is where you started to feel despair and restless in your day job, especially if the job is one that you feel does not suit you.
As a mean of “Full-time” income
As the clock ticks away, you will feel that your body starts to get weary down from your day job and you find yourself unable to work longer than the amount you used to work in the past. At this stage, your dividends income will slowly become your full-time income while you age and will eventually have to step down to earn lesser earnings than you used to in the past. This is a great idea especially if your dividends income at this stage has surpassed your active income. It is a choice that you and only you have and can make. Your new full-time income will now be able to listen to all your commands and cover any expenses you incurred. By this time, you would have successfully reached the tunnel of financial freedom.
So how do you look at the dividends income you’ve received? Which stage are you at right now?