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More on passive income and quiting your job

October 6th, 2006 by Kenric

In Robert Kiyosaki’s books he says that once your passive income is equal to your expenses then you are out of the rat race indefinitely.  I am not out of the rat race although I’m choosing to leave my job.  But then how can I do it?

When most people think of quitting their job, they think about retiring, traveling the world.  In reality, I think that anyone who’s passive income equals their expenses is savvy enough that they won’t stop investing just because they are just breaking even.  They will keep investing and growing.

So even though my passive income isn’t at my expenses I feel I can quit.  Why?  Because my passive will continue to grow.  It may even grow faster now that I have more time to devote to investing.  I really feel that quitting in the long run is a better financial option for me.  Look at what happened when I did it in 2004.  I was in the same boat.

Another thing is that I can always choose to be out of the rat race by lowering my expenses.  I can move into a smaller house, budget a little better and I’d be there in an instant.  However, I don’t want to live that way.  What fun is that?

Let’s say you are a 9 to 5 worker who spends your free time investing and building business to the point where you are almost out of the rat race.  Let’s say you are -$500/month away.  This translates to $6,000 a year.  Let’s say you have $6,000 in your account.  You could quit today and last a whole year.  In year 2, you’d need more money.  But realistically, are you the type of person that is going to go a whole year without trying to make more money?  You’ve already done so well on limited time.  How would you do investing and building business full time now?  Can you make $6,000 a year?  Can you increase that cashflow $500/mo within a year’s time?

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