The Terror of Passive Income

The Terror of Passive Income

Most of us have spent our careers looking forward to the day when we don’t have to actively work to have money. The pension. Social Security checks. Investment dividends. Money that comes without us having to continue the daily grind. Just a nice steady income stream whether we spent the week at the beach or working on a Habitat house or helping the oldest grandchild move into a new apartment half way across the county.

Well, that’s the way it was supposed to work anyway.  Right now, this kind of income is probably one of the most terrifying sources of cash flow imaginable.

Because it is, well….passive.  Since what we do isn’t tied to what it does, we don’t have a whole lot of room to make it go in a better direction when the current one is looking downright dire.

Right now it’s so bad that a lot of us are afraid to spend money on anything because the value of our passive sources of income is so wobbly.  This is not comfortable, but it’s important to know.  If we are aware that this possibility is part of the range of performance for passive income, we can build in ways to help ourselves cope when we get to this bumpy part of the road in the future.

We need to know this little secret about passive income as we plan what we want to do with the last third of our lives.  So this downturn has given us another unexpected gift–the chance to feel really deeply the helplessness of not being able to get our money to do a better job.  And feeling that feeling will help us build ourselves some escape routes from here on.

For some of us, it will be a matter of looking for a way to earn again.  For some of us, it’s teaching ourselves to stay calm in the midst of the economic hurricane.  For some of us, it will be refocusing on what’ s important and finding ways to keep going on that with a leaner budget.  And for some of us, it’s an adventure in how to cut costs.

You think I’m kidding on that last one, right?  Nope.  If the passive income situation is leaving you anxious, the most important thing you can do is act.   Taking action to cut the amount of money you need to live on is a good thing to do every once in a while to make sure that you are truly focused on your authentic needs.  So this is a good time to do that.

Notice I did not suggest you suck way in and not do things.  I said evaluate.  I said find a cheaper way to get what you want.  But just plain retreating?  Bad idea!

That makes you feel deprived as well as afraid.  And that’s an invitation to depression and poor health.  This situation is a test of our mettle, individually and as a culture.  The better we are at facing it,  acknowledging the scary feelings, and doing something to improve our situation, the bigger it is as a blessing.

Having investments lose value is awful.  Letting it intimidate you into not living your life is worse.

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