Freedom Generator 101: Your Guide To The Income Generator

This is the third part of our six-part intensive series on the Freedom Generator. If you missed the first article, you can read it here.

The Income Generator—the epicenter of your Freedom Generator’s power. Up until your Freedom Day, your focus is set on building up this important bucket. And once that day comes, your generator is the money machine cranking out a reliable “salary” for you month after month without the need for you to trade your time for money.

Sound good? Let’s dive into the Income Generator and discuss how you’ll bankroll your Freedom!

How The Magic Works

The Income Generator is the true powerhouse in your Freedom Generator. It’s the engine that keeps your Freedom running at full speed. If you peek under the hood, you’ll see the quality, dividend-yielding investments that regularly support your Financial Freedom.

Keep in mind this bucket does not represent retirement savings you can’t touch until your golden years. Instead, the assets in this bucket have one job—to generate a consistent passive income to maintain your Financial Freedom.

Constructing an Income Generator may not be quick or easy, but with a little know-how and a good plan, you have a guaranteed method for creating Financial Freedom. And it’s entirely achievable if you make building your generator a priority.

There is one important “trick” for getting there faster though! The secret to supercharging the growth of your Freedom Generator is this: Reinvest your dividends automatically. Until your Freedom Day, you should be extracting exactly zero dollars from your Income Generator. Your investments will produce dividends, but–instead of pocketing those returns–set up your portfolio so that the money paid out is automatically reinvested.

The Big Question: How Much Is Enough?

To maintain your Financial Freedom, your Income Generator must–at a minimum–generate enough income to cover your monthly expenses completely. Keep in mind that, when we talk about the income that your assets produce, we’re talking purely about dividends. You shouldn’t need to sell your actual investments in order to meet your monthly expense bill.

But squeaking by from one month to the next can put you in a precarious financial position. After all, the returns on your investments can change from month to month, and your expenses may vary as well. As a result, we recommend that you fund your Income Generator so that it provides you with at least 25% more income than what you need to cover your expenses.

How Much Money Should My Income Generator Produce?

We’re always asked: What’s a “good” return on my investments?

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