How to Quit Your Job and Work Off Passive Income for Life

Most of us would love to retire early, but it really doesn’t seem feasible right now, does it? After all, the TSX today might be improving. However, it is far from those all-time highs, with no end in sight as to when this market downturn should come to an end. Yet there is certainly a way to prepare to quit your job and work off passive income for life. It’ll take a few years, some setup, and some cuts. But trust me, it will certainly be worth it. Cut back … right back First off, if you’re planning to quit your job and work off passive income for life, it’s going to mean investing. But to invest, you’ll want to create as much cash on hand as you can to put aside in savings. To do that, you’re going to need to cut right back — on everything. The more you cut back, the more money you’ll have to retire early. So, consider everything. Do you need a fancy car or just something to get you from point A to point B? Do you want a big house, or are you on your own and can do with a classic apartment? Eating out, movies, and other non-essentials all need to go out the window. By doing this, you will create an immense amount of cash. In fact, I’ll bet you’ll almost be angry to learn how much you could have been saving if you had done this earlier! Now, on to how to invest safely. Consider it all Now, I know this is the Motley Fool, where we focus on stocks. Granted, that should be part of your strategy. But also, start creating some investments in stable long-term solutions. This will also help you keep hold of your spending habits. Consider creating automated deposits every pay cheque to force you to save. You can put these directly into a Tax-Free Savings Account (TFSA), for example, and create long-term tax-free income in the meantime. But don’t just put it in stocks. Consider a diversified set, such as bonds and Guaranteed Investment Certificates (GICs), as well. In fact, GICs, in particular, are great right now. There are high-yield options that you can lock in for five or even 10 years! That will give you returns of around 5% per year for that time period. Again, this will force you to put aside that cash and keep it safe until your retirement goal. Create more income Now, here’s the thing: I could certainly recommend passive-income streams that you could try, such as side hustles. But the thing is, I’d rather you work on your day job right now. Yes, you plan to quit that job in the near future, but for now, focus and focus hard. Get a raise if you can. Put all that effort into your job to create the most amount of cash you can, so you can put as much as you can aside. Then, besides the contributions to your GIC, look at stable, long-term dividend stocks. Companies involved with utilities, healthcare, and finances are great places to look, as they’re essential to our daily lives. A great option right now is the Big Six banks, which trade quite low. For instance, if you were to pick up Canadian Imperial Bank of Commerce (TSX:CM) on the TSX today, you could create massive passive income as well as large returns. There’s a 6.74% dividend yield as of writing you can grab today, with shares trading at 10.67 times earnings. So, this is certainly one to consider if you want to retire early. You’ll then be able to reinvest the passive income as it grows and use it towards your retirement income later on. No matter how you get there, being strict, consistent, and focused on your future will allow anyone to retire early. So, don’t let your future keep going on without you. Have a say and start saving today.

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