As we all know, when you work for an employer your time is not your own. You are trading your time for income from wages. Your vacation dates will likely be ruled by your employer. While there is nothing wrong with working for a living, you should start preparing today for what you need in the future. You can start investing for income part-time while you are still working for the man.
Here are some financial lessons to keep in mind when preparing for your future:
- No matter how good you are at work, you are expendable;
- The term job security can be an illusion;
- You are not likely to get rich working for someone else;
- Nobody cares about your money more than you do;
- Social security may be restructured or may not be available when you retire;
- The company pension is quickly if not already going away.
The list above is proof that you should seek multiple streams of income. You should consider adding a 401K and/or IRA to supplement your waining social security checks. The safest income streams are saving accounts and certificates of deposits both of which are best for emergency cash holdings. Beyond this, you should start to think about additional income streams. The obvious choices are dividend paying stocks and close-ended funds because they tend to be passive income. Next, I would suggest you begin to learn how to sell covered calls against some of your dividend stocks or other stocks with potential to create additional income. If you get good, you can advance to more difficult option strategies for another source of income. You can even move into real estate investing to diversify your assets and create more monthly income.
One source of income is just not enough in today’s society. Each of us should take the initiative to learn how to create additional income streams by using your assets rather than your time working for an employer. The end result will be more income streams, more financial security and more time to do the things that make your life more enjoyable to you and your family.
Here, we sell options, covered calls and cash-secured PUTs, to create multiple streams of income while investing in CEFs paying monthly dividends.
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