A while ago I read a post about only spending re-earned money. Its not a new concept, and in fact in George Samuel Clason’s classic “The Richest Man in Babylon” he talks about something similar. In it, a money lender is teaching an ambitious young boy how to become rich. He has convinced him to live below his means and invest the excess. The money lender asks him what he does with the income from the money he saves. The boy talks about the delicious foods and the fancy clothes he purchases. To which the money lender chastise him and says that he’s “eating his children” and he has to allow his wealth to compound and keep making more for him (the re-re-earnings in the originally linked to post).
Another blog post I read was about the blogger getting his first $30 / month in passive income. He was excited, but also had the feeling “its just $30 / month”. Similarly I was talking to some friends one time about my investment condo and talked about how I make around $250 / month from it and one of them apologetically said “$250 per month isn’t very much money”.
Its true, but one of the commenters on the $30 / month post said to think about it like some bill he’d never have to pay for again. Imagine he got a cell phone with free usage for the rest of his life. You’d be pretty excited about that, right? If I view my condo as paying for all my groceries for the rest of my life, $250 / month becomes pretty sweet!
Most of my long term financial plans revolve around re-earned income (as the original poster called it). Being able to have passive, reliable income that covers the various expenses in life seems to me to be the best way to get to the point where you can be confident that you’ll never be forced to work somewhere you hate for the rest of your life.