Financial Security for Working Moms: Passive Income vs. Legacy Income

Financial security is not complicated – there are two main options: passive income and legacy income. Both have advantages and disadvantages, but which is right for you? Let's take a look at the meaning and purpose of each type of income, and see which one is more compatible for you.

What is Passive Income?

Passive income is money you generate without having to trade your time. In other words, it is money earned with minimal effort. There are a few different ways to create passive income, such as reaping the gains through investing in real estate, stocks, bonds, or businesses that you have set up so that they run on autopilot. These types of income take a bit of work to set up, but once it's done, you can pretty much sit back and relax.

While passive income can be a great way to achieve financial security to guard against tough economic times or retirement, there are a few drawbacks to relying on these sources.

• They may not be as reliable as you need them to be. For example, the stock market can fluctuate all the time, so your investment could end up losing money when you need it the most.

• Some passive income from businesses may be taxable, so you’ll need to keep track of your earnings and pay yearly taxes.

• It can take a while to build up enough passive income to support yourself; this additional income stream can dry up if you are not actively working to maintain them.

So if you’re looking for immediate financial security, this may not be the best option.

What about Legacy Income?

Legacy Income is a type of financial security earned through heart-based investing (A Relationship Approach to Financial Market). For many people, it is like a safety net in retirement that can be willed to future generations. It is typically in the form of inheritance but can come from things like life insurance policies or trust funds administrated by a financial institution to provide a continuous flow of income, ensuring financial stability even after you’ve stopped working. This income lasts for generations and provides peace of mind in knowing that your loved ones are taken care of, no matter what happens. The purpose is simple: Every time someone receives this income, they'll be reminded of you and the story you left behind.

There are three reasons why legacy income might be a better option for you than passive income.

• For one, it is typically more reliable and stable, as it is not subject to the ups and downs of the stock market or other volatile investments.

• Additionally, legacy income is often tax-free, which is a huge advantage and you won’t have to worry about keeping track of your earnings or paying taxes on them each year. Not paying taxes leaves you with more time and money- which feels pretty good if I say so myself.

• Finally, legacy income can provide financial security not just for yourself but also for future generations. This may be your ideal option if you're searching for a long-term solution to help your family.

There are many benefits to legacy income, but one of the most important is that it can help us avoid regrets. We all have a limited time to experience life on this earth, and we want to be remembered in the best way possible.

What will your legacy be?

How do you want to be remembered?

If you're like most people, you want to leave a lasting impression and make a difference in the world. And one of the best ways to do that is by creating a legacy. A legacy is something that lasts long after we're gone. By pursuing legacy income, we can ensure that our time and effort will have a lasting impact – not just on ourselves but also on future generations and the world.

Maslow's Hierarchy of Needs

Image from Change Therapy

According to Maslow's Hierarchy of needs theory, passive income addresses your basic need for survival with the provision of security and safety. In contrast, legacy income is more about living a fulfilled life by achieving self-actualization. In other words, if we're constantly worried about meeting our basic needs, we'll never be able to reach our full potential.

There's nothing more rewarding than knowing that you've made a positive impact in the world and that your legacy will live on long after you're gone. Unfortunately, many people don't realize the importance of legacy income until it's too late. Like most people, you probably think your hard-earned money will go to your spouse or kids when you die. But what happens if they pass away before you do? Or what if they don't share your values and end up squandering your life's work? These are all very real possibilities that can keep you up at night.

Creating a legacy income gives you the peace of mind of knowing that your work and values will live on long after you're gone. And it's not just about money; it's about leaving a legacy of love and gratitude to others. It's a heart-based approach that can provide financial security for yourself and future generations. And it's the best way to avoid regrets in retirement.

Please get in touch with me if you have any questions regarding legacy income. I'd be delighted to go through this option with more in-depth to provide income in your retirement. Thank you for taking the time to read this!