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Sunday, July 5, 2020

Be Passive About Your $

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Copper Cotton
Copper Cotton
Copper2Cotton is a money blog following one person's journey to reach $1 million net worth. This blog will not only show the author's progress, but also give financial tips and insight for anyone who wants to be wealthy.

“If you don’t find a way to make money while you sleep you will work until you die.”—Warren Buffett

I couldn’t think of a better way to start a blog about passive income than with that great quote from Warren Buffett. Just the idea of working until you die or living in poverty when you can no longer work should be horrifying. But fear not because I have the answer to Mr. Buffett’s conundrum: Passive income!

Stop whatever you’re doing and start investing in stocks, bonds, CD’s, cash and real estate. Build a passive income stream for yourself. Don’t think about 10, 20 or 30 years from now, when you are older and need a passive stream of income to survive. What about today? What if you suddenly lost your job?

That just happened to 126 people working for Element Electronics in South Carolina. All 126 of them received a pink slip without any warning letting them know October 1st would be their last day of work. Earlier this month in Chicago, another 153 people were scheduled to be laid off at Stack-On, a safe manufacturing company. The company will be closing its manufacturing facilities in Illinois and moving to Mexico because the tariffs on metal have made operation costs too high.

Did you know that an ACT requires businesses to report to the Department of Commerce and Economic Opportunity (DCEO) 60 days in advance, whenever they are planning to lay off 75 or more workers at one time? Unfortunately, Chicago is about to be caught in a wave of unexpected layoffs, with the DCEO reporting more than 885 layoffs for Chicago next month.

Also, in the news was everyone’s favorite mule or clog, Crocs, which closed the last of its manufacturing plants and most of its stores. The company is still alive and well. In fact, Crocs is thriving.The company share price has tripled from $6 to $18 per share over the last year. Crocs simply decided to outsource all manufacturing to improve its margins.

The news didn’t provide the number of job losses but you get the picture. It could be politics, automation or the thousands of people willing to do your job for less that could find you without a regular paycheck. No longer is it, if you lose your paycheck but when.

I believe unemployment and an emergency fund are a great temporary fix but what you really need during a job loss is a permanent, reliable source of income. Who wants to spend years building an emergency fund only to spend it all in a fraction of the time it took to build it?

Wouldn’t you rather divert monthly dividends, interest and rent payments into your checking account?

We are currently on the tail end of an economic boom and you can rest assured that a bust is coming. So, I ask: Why must the Global Majority lose everything and start from scratch every time there’s a recession? You don’t have to lose your home and ruin your credit if you suffer an extended job loss, if you learn to invest with a focus on creating income that you can one day rely on now and in the future.

You have to prepare for the rough times. You prepare by acquiring assets that pay you money on a monthly or quarterly basis. And you only stop buying assets when the money you receive from all your assets combined is equal to or exceeds the monthly income you receive from your paychecks.

Building passive income is not quick and it’s not easy. At first you will probably say, “What can these pennies do for me if I lose my job?” But if you stick with it, the pennies (copper) turn into dollars (cotton) and you will have built something that you and your family can rely on, something that allows you to sleep at night because you know even if you received a pink slip tomorrow. you can maintain everything that you have.

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