5 Reasons Why You Need To Convert Your Active to Passive Income At The End Of The Day

Publish date: Tue, 15 Jan 2019, 08:33 PM

Having worked professionally in the accounting and finance field for more than a decade in 4 different companies throughout my career, you would have thought I have a plethora group of friends and colleagues who likes to convert their active into passive income like myself.

That is not the case.

Within my circle group of friends and colleagues, this number amounts to a minority and you would think it is strange that for someone who is handling other people's money or accounts on a daily basis, he or she would have taken more charge and responsibilities in their day to day personal finances planning for their own future.

You see, that's a problem with how the modern corporate world grinding has done to us.

First, they managed to legally drug most of the working people with a monthly dose medicine in the form of a fixed salary to ensure we clock our time faithfully from 9 to 6 during the first 5 days of the week. Over time, we get so used to receiving a timely payment and increment yearly that it is difficult to break away from the golden handcuff.

Next, they kept us busy by giving us tasks so we can work on looking for the solution to the problem.

And that gives us hardly time for ourselves at the end of the day - thinking hard objectively about what we want to achieve for ourselves.

Here are the 5 reasons why you need to convert your active to passive income as fast as possible.

1.) You Are Your Own Priority

No one else is in charge of your own well being other than yourself.

That means we should try as much as we can to prison break away from the golden handcuff that has held us for a number of years.

As much as you enjoy your job, you need to look after your own best interests and sometimes that means being selfish about some of the things which you may need to sacrifice. Example would be sacrificing the wants to buy a luxury bag in favor of savings.

2.) Companies' Priorities Are So Damn Crystal Clear

As a shareholder of some of the companies I owned (see what companies I'm vested here), the most important thing is to see the company doing well.

This can be attributed by an improved topline or bottomline margins, increase in sustainable dividend payout, a roadmap for future outlook plan and ultimately a capital gain in the share price.

An employee's well being which comprises of a salary increment and bonuses are important in driving some of these things but you can see they are much lower in the priority.

If there is an economic slowdown which resulted in a lower margin or if there are projects that don't go as planned, you can bet that I would vote in favor for a lower employees' bonuses.

3.) Our Body's Finite Energy Timeline

Sometimes, we do not know what surprises our health might give to us.

On one moment, we can be very healthy by keeping ourselves fit through the proper exercise, eating regular meals and keeping tabs on regular check-ups.

The next moment, we can be down with illness and some of these illness can be fatal.

When our body gets weaker, we may not be able to perform to the required level a previous role we had committed.

We may be forced to downgrade to a role which the body can take it.

4.) You Can Make Your Passive Income As Regular And As Addictive As Your Active Income

I used to be like everyone else in the past getting so used to the regular payout from my monthly income and becoming dependent on them over time to tide over the month.

When I first switched over to dividend investing, it didn't make a big impact to my life because the amount is immaterial to affect any change.

But slowly over time, this amount compounds and I become interested into it more and more each time.

Now, I grow quite addicted to it that when I receive my monthly salary, the first thing I would do is to transfer over some of those funds right into my investment account, buying more dividend companies which in turn give me a higher dividend payout.

5.) Everyone Needs To Retire From An Active Income At Some Point

Whether we like it or not, there will come a time when we eventually need to retire from an active income and shift our gear towards a more regular passive income in nature.

Since that is just a matter of time, why not make it a reality as early as we can while we are still younger and we can allow room for errors if it should come to that.

Starting early also allow room for compounding to take place, which can be massive if the time stretch is longer.

What Do You Guys Think?

Is There A Need To Convert Your Active To Passive Income At Some Point?

Is It Just A Matter of Time or Is That A Choice?

Thanks for reading.

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