“Income Neutral” The Ultimate Financial Goal


Money is possibly the most stressful part of people’s lives once they are out of college. It can cause fights between friends, divorce between lovers, and abnormal fear and greed among the crowd.

The reason for all the stress isn’t simply because we have bills. Everyone has bills that they need to pay, but not everyone is stressed over money. The major cause of all of our stress over money is because most people have what I like to call an “Income Bias”

When you have an “Income Bias” you need to make money and you need to make it from one area of your life. If you don’t make it from that area than you can’t support yourself and can’t pay down your bills. All this pressure leads to more stress and more reasons to panic.

For example a man whose only income stream is his job may need to work longer hours and ask for a raise if he ever needs to make more money. An investor whose only income source comes from his investments may make bad decisions when his investments don’t pan out and as a result lose money or potential profits by listening to his emotions instead of logic.

This is why many investors tend to lose money because they “Need” to make money every month and they can’t afford to lose it. This causes them to panic and make stupid decisions instead of staying calm and listening to reason.

When you “Need” to make money in one area of life in order to support yourself you panic, you ignore other areas of your life, and you focus way too much of your energy into something that you really can’t control.

You can be the hardest worker in a company, the smartest investor in the market, and the most passionate business man in the town, but at some point you have to admit that there is only so much you can do. You have to take your hand off the wheel and let the universe guide you.

There is no point stressing out over something you can’t control, but if you have an “Income Bias” and one source of income has such a big impact on your life it is hard to help it.

What’s the solution than? How can you stress out less over money when you need money and you need it to come from one area of life?

What about shifting away from an “Income Bias” environment into an “Income Neutral” environment? The idea here is to become less focused on one income stream so that you don’t have to stress over it as much and can instead use your brain to focus on your loved ones and your passions in life.

Building multiple channels of income only makes sense and should be the ultimate goal of your financial life. It can make your life less stressful and make it so that you don’t have to worry about money.

Instead of spending your energy focusing on how you are going to pay your bills and how you are going to get more money from your job or how much you can charge your customers an “Income Neutral” strategy allows you to focus on your passions and bring more of the things that you are passionate about into your life.

When you no longer need to worry about your money coming from one area or another, life becomes more about doing the things you like. If you stay late at work it is because you want to, not because you have too.

If you start up a new business or try to make it to the next big thing, it is because attempting new projects and learning from them excites you, not because something needs to work out to save you from the mess you are in.

If your passion is writing a book or starting a business and that leads to more income sources then so be it. If it is just to spend more time with your kids without having to worry about money then do it. Life is much better when you have an “Income Neutral” environment and you don’t need to worry about money (this is especially true if you like the finnier things in life or worry a lot).

Is It Easier Said Than Done?

Is it easier said than done? Perhaps, but it is possible. The easiest way to get a 2nd income stream is to take some of the money you are earning now and to invest it into paper assets like stocks and bonds.

You may not earn a lot of income doing this in the beginning, but it is a start and it is something that can add up over the years with compound interest.

Learning how to invest and looking for ways to increase your returns on your investments can help speed things up. It’s one of those many situations where spending time on your education can pay off big in the future.

Another way to create a new channel of income is to start a side business. Find out what you are passionate about,, than figure out how you can use that passion to create enough value for other people that they might be willing to pay you for it.

I’ve previously written about why everyone should start a business. It’s a pretty interesting experience and it helps you to get to know yourself a little bit better and how much you are capable of doing in this world.

Creating an “Income Neutral” environment for yourself goes beyond what the average person thinks about in their financial life. But it is well worth the extra time involved and in the long run can make your life a lot less stressful and more passionate.

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