Living on dividends or income can seem like an unachievable dream for most people. In fact, many do not even believe that it is possible to live only on the profits of investments, without the need to have a job to obtain the income of the month. However, today there are several possibilities that help people to become financially independent and, consequently, have the chance to live off their income.
And for you who are curious or have doubts on the subject, below we clarify the main points on how to plan to live only on income. Check out!
After all, what does it mean to live on dividends?
Living on income is nothing more than achieving financial independence, that is, not having to work for third parties to have a monthly income. In practice, it means choosing the right investments, so that on a monthly basis they result in dividends that are enough to cover your lifestyle expenses.
Of course, you may already be asking yourself: how is this possible? There is no magic formula that everyone can follow in order to become independent. But there are a number of possibilities that you can and should consider investing, according to your profile and lifestyle, if you want to live only on dividends.
Many people, even with this independence, continue to work, either in their own businesses or even as employees in other companies. The important thing is that in this case, working ends up being a choice for personal satisfaction, since the income could cover the expenses of everyday life.
In other words, achieving this independence also means living with more flexibility, having more time to devote to family, hobbies or even personal work projects, without the pressure of working just to pay the bills at the end of the month. Although it is possible to conquer this lifestyle, it is important to understand that in order to achieve this goal, financial planning and organization are necessary.
What is the importance of financial planning?
Without a doubt, financial planning is the most important tool you should use if the intention is to live off dividends. Initially, it is necessary to raise some key information so that this planning is possible to be carried out. Start by identifying what your income is, what bills need to be paid every month, how much you can save every month, and what range of income you need to live in peace.
Knowing all this information, it will be much easier to identify what your needs are and also to outline an assertive plan to reach the required level of income. After identifying the points above, the ideal is to outline financial objectives, which can be monthly values for investments, for example.
How to choose the best investments?
After identifying what is the monthly income amount you need to have to live peacefully, start researching the different types of investments in the market and what is the average profitability of each one of them. For example, we know that saving is a safe investment, because the risks are minimal or almost nonexistent, however, its profitability is very low and does not make sense to anyone who wants to live on income.
On the other hand, investing in the purchase of high-end apartments to make money on rentals can be a great alternative. Of course it is a very high investment, however, it is necessary to consider that the rate of return will also be very interesting, especially for those who want to make investments a source of guaranteed income.
Did you see how it is possible to live on income? Knowing what your goals are and making the right choices, have no doubt that your dream of becoming financially independent will be realized.
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