Top 3 Most Common Financial Problems Solved by Income Investing
Hello,
99 % of the people have or have had financial struggles.
And if you haven´t had any, financial struggles could be just around the corner. These could happen to any one and often biggest money problems are self-made, such as;
reckless and impulsive money-spending;
arrogance over spending, causing people to lose the reality of how much they make and how much;
being a people-pleaser;
simply buying shit you can´t afford. While having debt or finance is not a bad thing, but building your life with debt or financing everything is not that smart;
saving to a bank account and never investing (100% sure way to lose “purchasing power”);
living in a credit - loop.
These things often mix personal finance, money education at home (or lack of it), influence of your close-circle, investing and some other things. There could be countless of reasons why different people suffer from different financial struggles.
And very often, the people you think do not have financial problems at all, are people with the biggest and most difficult financial hurdles going on. They are just living on the edge and don´t want you - or anyone else - to find out.
On today´s edition, we discuss about top three financial problems people face and how income-producing investments can help solve them.
Let´s go!
Financial Insecurity and Uncertainty: How Income Investing Could Help
Financial insecurity is a growing problem for many people today, especially for young adults. Unexpected expenses, job loss, job market security or the inability to save enough money for future needs can lead to stress, anxiety, and financial instability. In today’s unpredictable economic climate and because of the never-ending inflation, it’s more important now than ever to find different, alternative ways to secure consistent cash flow.
But Why Exactly Financial Insecurity Is a Major Problem?
Job loss or income disruption: Economic downturns, layoffs, or unexpected health issues can lead to the loss of a stable income;
Living paycheck-to-paycheck: Without savings, individuals can easily find themselves struggling to cover even basic living expenses.
Even if there would be savings, just go online and search for “grocery prices in 2010.”
Did you know that at the year 1947 a $20.00 for groceries is estimated to be equivalent for $236.00 on year 2024?1 If you think inflation doesn´t exist or doesn´t matter, think again.
Lack of financial preparation: Many people don’t have a contingency plan for emergencies, leaving them vulnerable when unexpected costs arise.
How Income Investing solves financial insecurity:
Income investing provides a solution to financial uncertainty by creating additional streams of income. These streams can be small and rare or higher and regular, it doesn’t matter. What matters is that they exist and you understand how they work.
By investing in dividend-paying stocks, bonds, or real estate, individuals can earn passive income, helping to cover daily expenses without needing to rely on their primary job or third parties to support them financially. For example;
Dividends from stocks: Regular payments from profitable companies;
Interest from bonds: Steady returns from debt securities;
Rental income: Regular cash flow from property investments.
Building a portfolio of income-generating assets can help stabilize finances, reduce the fear of running out of money, and give you peace of mind in case of emergencies or economic downturns happen.
And these things will definitely happen in life.
Retirement Planning and Longevity: Secure Your Future with Income-Producing Investments
Retirement planning is one of the biggest financial concerns today. With people living longer and traditional pension plans becoming less common, it’s essential to think how you would have enough income during the retirement. Retirement savings can be tough to accumulate, and without proper planning, many people face the risk of outliving their savings.
Inflation will kill part of retirement savings aswell. Therefore it would be smart to collect a bag of income-producing assets that pay you every month or every quarter at least. These don´t have to pay much or cover all of your expenses, so no reasons to stress about that. But if they cover just some of your expenses, you’ll sleep better.
Why Retirement Planning Is a Growing Problem:
Increased life expectancy: People are living longer, which means retirement savings need to stretch further. Government and public retirement programs created after World War II were not meant to cover for situations when people can stay on retirement for + 20 years, easily.
Lack of traditional pensions: Many employers no longer offer pension plans, leaving individuals to rely on their own savings or government assistance.
Inflation and rising costs: The value of money decreases over time, making it harder to maintain the same standard of living without increasing income or having additional income streams after the working life ends and retirement starts.
How Income Investing solves financial problem on a retirement?
Income investing provides a steady source of cashflow for retirement. After all, retirement is meant to enjoy life and take it easy. Rather than worrying for savings, retirees could use income-generating assets to cover their expenses. For example;
Dividend stocks: Shareholder dividends that pay out regularly;
Bonds: Fixed-interest payments that can provide consistent income;
Real estate: Rental income from properties or real estate investment trusts (REITs).
By diversifying into these income-producing investments, individuals can ensure they have a reliable cash flow during retirement, keeping their finances stable as they age.
Again, you should not overcomplicate this. You do not have to earn thousands or tens of thousands of dollars every month from these assets. Instead try to think it in a more creative and practical way:
Let´s say you have income-producing assets that pay for all your dinner and lunch meetings with your friends at retirement. Maybe you play golf and travel together? Or perhaps you spend that money for quality time with your children and grandchildren.
It´s fun and gives a meaningful impact when you apply income to real-life examples!
Debt Repayment and Financial Freedom: How Income Investing Helps to Pay Off the Debt Faster
Debt is a real burden for many people, especially when it comes to high-interest debt like credit cards, student loans, or mortgages. A modern-world fact for 99% of people is that if you even think about owning your house, you have to get mortgage. There is nothing bad with it, it´s pretty common, but some people just can´t stand debt or having to pay debt back for decades.
Debt repayment often takes years, not months. And during that time, interest rates can make it feel like you're never truly making progress. Debt could limit financial freedom, prevent you from saving, and cause ongoing stress.
If modern-day YOU takes debt, your FUTURE-SELF is obliged to pay it back.
The decisions of the modern-day YOU shall effect and control the purchasing power and the use of money for your FUTURE-SELF.
Read that again and think about it.
Why Debt is a Major Problem:
High-interest debt: Credit cards and payday loans can add up interest quickly, making it harder to pay off the principal.
Stagnant income: In general, wages haven’t kept up with rising debt levels, creating a cycle of debt hard to escape.
Limited cash flow: Without extra sources of income, it’s challenging to make significant progress on paying down debt. Often loans are planned in a way, that paying the minimal monthly amount won´t decrease the principal that much.
But how could Income Investing solve debt problems?
This is different is all situations. If debt is based on consumer loans / credit card, it would be smart to pay those off first. This is because such loan products have high interest and other costs.
If you already have income-producing assets, you could use that income as additional debt repayments. You could also invest your left-over money in income-producing assets like:
Dividend stocks: dividends can be used to pay off debt;
Bonds: interests gains can go toward reducing outstanding balances.
Fixed Income: With fixed income accounts you know how much you’ll get income after the term ends. You’ll also get your principal back.
By adding income-generating assets to your portfolio, you can accelerate debt repayment and reduce the financial burden more quickly. This allows you to achieve financial freedom sooner and break free from the debt trap.
Income Investing Has Potential to Solve Some of Life’s Biggest Financial Problems
Income investing is a powerful financial strategy that can help individuals solve some of life's most pressing financial challenges.
Whether you’re struggling with financial insecurity, concerned about planning for retirement, or overwhelmed by debt, income investing offers a proven solution. By creating consistent streams of passive income through dividends, bonds, fixed income and real estate investments, you can build financial security, enjoy peace of mind, and work towards a debt-free future.
Start today by exploring income-investing to wealth grow over time.
At least give this idea some thought.
Thank you for being here
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Thank You for sharing! I enjoy your articles.