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Investing Wisely An Introduction – My Life’s Work

My name is Derrick. I have spent most of my twenties and now being almost 40 working on building businesses and investment portfolios. I have had a lot of success and some failures.

The successes and failures have all been learning experiences but I always try to learn from the failure experiences and obviously celebrate the successes.

With this blog I hope to share some of the experiences I have had with you, this is a passion project, not something I hope to general much (if any revenue from). I also hope to share my wisdom I have gained and someday my 2 year old and 7 year old can look back and read what old dad was writing about.

I am also hoping to help some people that are just starting their financial journey and trying to get their finances in place so they can build wealth, retire early, or fund a business.

The Cashflow Quadrant

The Cashflow Quadrant is a great book authored by Robert Kiyosaki that I will be referring to many times on this blog.

The four quadrants of the Cashflow Quadrant are as follows:

E – Employed

S – Self-Employed / Small Business Owner

B – Big Corporation/Large Business Owner

I – Investor (Stock Market/Real Estate/Startup Investor)

I won’t give away the whole book but I will say this, if you are in business for yourself or working a job at a big company then you need to get out of the S quadrant and E quadrant and into either the B and/or I quadrant.

I know easier said than done, but the reason you need to do this is simple.

E and S quadrants are the two lowest paying quadrants but they are also the most likely to fail. By default those quadrants are the most risky because you do not have a lot of control over your success or failure.

The B and I quadrants give you the best of both worlds, high income potential coupled with a high level of security thanks the compounding that high income over time.

If you are an E or and S don’t fear (I am too), but I take money from those quadrants and put them into the I and B quadrants. You can absolutely do this too!

It Is Ok To Be An Employee!

Yes, you read that right. It is perfectly fine to be an employee if you are happy in your situation. Just make sure you are using your employee income to build wealth through investing that money into passive income sources, just make sure you are constantly working towards moving investments into the B and I side of the quadrant discussed above.

I love being a small business owner and I am going to be an entrepreneur for the rest of my life, but I also have no intention of leaving my day job.

Building Passive Income

Passive income is a goal for many people. Passive income has many definitions, but I define passive income as income that requires little to no work after it’s been setup. Notice I didn’t say passive income is no work, it is work, often a lot of work. But you do work upfront and passive income will pay you for months and sometimes years to come.

What Are My Favorite Sources of Passive Income?

My favorite sources of passive income are:

Passive Income #1 – Dividend Stocks

Dividend stocks are stocks that pay you income as shareholder.  They are not guaranteed but they do often pay more than the average savings or CD account and dividends can compound over time because your payment from the company will be reinvested to buy MORE shares of their stock. Many dividend paying companies also seek to grow the dividend over time, which will help your income keep pace (or beat inflation).

Dividend Investing is a very powerful tool to use is your passive income pursuits.

Dividend investing is one of the best ways to generate passive income and I have been able to build my net worth through dividend reinvestment and when I am older will likely utilize dividend investing as passive income to supplement my other income sources.

Passive Income #2 – Building Income Producing Websites

I build websites that make money in multiple ways from income from ads, earnings from affiliate or referral commissions and sometimes from product sales.

This income stream is a lot of upfront work but it snowballs on itself and generates more and more income for less and less time invested.

You can really speed this up by re-investing your website earnings into growing the website and also taking a portion of the earnings and putting it into dividend paying stocks.

This is another powerful income producing tool and one of my favorites, we will talk about this more and more in the future.

Passive Income #3 – Fundrise

Fundrise is my passive income source that I am currently using. I like Fundrise because it allows me to purchase small pieces of real estate projects all over the country. It pays passive income through dividends, but also offers the opportunity for capital appreciation as the real estate values appreciate.

You can get started with Fundrise for about $500-$1000 which is what I did and my account has steadily grown over time.

Passive Income #4 – Cash Back Credit Cards

I have very little personal debt and can count on one hand how many times I have carried a credit card balance from month to month in my life. But I do responsibly use a credit card.

If you are a Dave Ramsey fan it is ok we can agree to disagree and still be friends. Seriously, though Dave’s teachings are good but they don’t all work for me and that is ok!

Ok, so how do I use credit cards to my advantage?

I put most of my daily living expenses and business expenses on a credit card that at the end of each billing cycle puts cash rewards into my investment account. I then take that cash and invest it in dividend paying stocks.

See a common trend here? All of these income sources are intertwined and fund and grow each other, producing more and more income.

My Goals With This Site

Through this blog and my YouTube channel I hope to continue this discussion where we can learn from each other and build a strong community of successful like-minded individuals that want to change their lives for the better.

We shouldn’t be here to compete with one another, we should help each other and spend time networking, growing our audience and reach.