What comes after passive income?

Reading Time: 3 minutes

Ok I am not a big fan of the term passive income, because it does indicate the work required to achieve the passive income is passive. Which is entirely false.

But I also know, I need to grab your attention somehow.

So, forgive me.

In my early 20’s I never thought I would be in a position to write this article. I remember reading about why Charlie Munger (and many others) pursued financial independence as a primary objective in their life. For Mr Munger it was so he could have all the time in the world to read and learn about everything the world had to offer.

Often people misunderstand why people have a dream of financial independence. They believe it is for greed, capitalism, riches, Ferraris, big houses and expensive watches. I have met hundreds of people now who are building a financial independence. I can promise you, only a few chase riches over independence.

Once I became financially independent, unlike Mr Munger, I had no idea what I wanted to do nor the reason I wanted financial independence in the first place. The only thing I knew was I was not meant to live the next 40 years as a Railway Engineer managing compliance and punching data into spreadsheets.

But when I became financially independent at the age of 27. What now? Continue to add more? Keep increasing the monthly income figure? Sure, but do I want to dedicate all my time to that? Is there more to life than money?

So since 27 I have asked the question what next?

And I will keep it universal so you can apply this to your own situation.

Imagine two 500ml measuring jugs next to eachother.

Jug 1 has your current salary in it. Let’s assume that is £2,000, and that equates to 200ml of water.

When you start working to build a passive income Jug 2 now begins to fill up. 10ml, 50ml, 100ml, 120ml.

Until Jug 2 has 200ml in it. The exact same as Jug 1.

This means your passive income is equivalent to what you earn in your job. My recommendation is to be on the safe side and keep filling up Jug 2 to approximately 300ml.

Now your passive income is greater than your job income.

You are now financially independent, which means you have choices. The choice is yours, typical examples of what people do when they are financially independent is stay in their careers, leave their job and seek their own active income, double down on their passive income strategy.

But what is next for you as a person?

Well just like the two-measuring jug scenario we can introduce two new measures.

Jug 1 is passive income

Jug 2 is passion

You now have full reign to find and live your passion. Sadly, this for many of us is locked away through the statement, ‘I don’t know what I am passionate about’.

But this is also a part of the exploration it takes to fill up the passion jug.

Till you get to a point where your passion now exceeds your passive income. This could be a measure of money, but it could also be a measure of joy you are now getting out of life.

Joy from life comes in many forms, writing, art, travel, full time parent, charity, volunteering. It is your choice.

So, when working on your financial independence, also have one eye on what is next for you. Because when all is said and done, it won’t be the amount of passive income you earned that you will remember. It will be what you did with the time the passive income bought you.