In October 2023, my passive income took a significant $150,000 hit, representing a decrease of 39%, following the purchase of a new house. It was funded by proceeds from selling public stocks and bonds.
The decision to buy the house with cash was agonizing, as we didn’t need a nicer home. It also meant we would technically no longer be financially independent since our passive income wouldn’t cover all our living expenses.
However, driven by my desire to provide a better life for my family, I chose to take the risk. Over the next six months, life became stressful as cash flow tightened.
I had violated one of my 30/30/30 home-buying rules, specifically the one about ensuring 10% of the property’s value remained in liquid assets. I vow never to make that decision again.
Despite enduring a difficult period, I’ve emerged stronger. After writing about the negatives of my decision, I now want to reflect on the positive aspects of earning less passive income. Overall, ironically, earning less passive income has improved my life.
So for those of you who currently have no passive income or are still far from accumulating enough to cover your expenses, I hope this post will inspire and motivate you.
The Best Things About Earning Less Passive Income
Here are the five best things about earning less passive income, followed by some deep-rooted psychological reasons why I decided to derail my financial independence journey.
1) Paying fewer taxes feels better
This year, I spent about six hours doing my taxes—a tedious and time-consuming task. One of the biggest annoyances is inputting all the K-1s from investing in private funds. However, since I handle my own taxes, I get to see firsthand how much I’m paying in taxes each year and make strategic moves to optimize my tax liability
