investment
Although my passive income streams have grown steadily over the years, I haven’t put too much thought into their role in either my taxes or my standard of living until recently.
My active earned income dropped dramatically. Now that I don’t work a W-2 job, my cash flow situation and taxation look a lot different than they did before, and passive income sources play a more prominent role in my life.
Banks are not paying much in interest, but there are several online banks with a solid reputation paying 1% interest or more. I am not a huge fan of sitting on cash, but for various reasons, I’ve been doing a lot of it lately. I keep an emergency fund. When you don’t have a steady paycheck, it’s good to have readily available money. The pandemic has highlighted the importance of having that fallback to rely on.
#2 Dividends
I’ve never been a big fan of dividends. When I wrote about the only individual stock I held, I highlighted the fact that it pays no dividend and why that’s a good thing. I’ve demonstrated how selling shares of a company is better than receiving a dividend from it.
If I were to count each investment or even each type of investment as a different source of passive income, I would have way more than four. I’ve chosen to lump them together into the same category, and I’ll briefly review what these are.