Advice about Newspapers, Travel, Launching Your Own Business and Passive Income

CC thoughts

I was mentioned on another blog ( today! As I was building up Navigating Newsrooms followers on Twitter a few days ago, I stumbled on a former journalist who took two years to travel the world, and she wrote a fantastic blog about it.

I was amazed. That’s exactly what I want to do – and what tons of others want to do.

So I sent Paula a direct message.

I introduced myself as a former journalist as well and asked for advice, and she suggested that I interview her! After I submitted several questions on several topics, she posted the answers this afternoon, and I immediately sped through the post. Paula edits and writes, where she gives excellent financial advice with her own personal touch. I’ve read post after post on her site – check it out.

The business and passive income (and even travel) bits tie nicely to “The 4-Hour Workweek,” so I thought it would be wise to put the answers here. I know someone has the same questions I do.



Q: When did you begin planning your trip? What age were you when you left?

I started planning it 5 years before it happened. Sorry — that’s probably not the answer you want to hear!

I was 19 and I had just returned from a study abroad trip to Japan (paid in full by a scholarship). My time in Japan had bitten me with the travel bug, so I set a goal to travel for 2 years without a job or any responsibilities. By the time I was 24, I was ready to launch that dream. (I should add that I was a baby — barely 21 — when I graduated from college and started working my first ‘real’ job.)

Setting a clear goal was important. If I had been willing to work while traveling, I could’ve joined the Peace Corps or taken a job teaching English overseas.

But I had a clear vision of being able to travel freely, without responsibilities tying me down. And for the next 5 years, most of my financial decisions revolved around this vision.


Q: Did you have any hesitations about leaving? When/how did you finally decide, “OK, I’m doing this”?

Yes, absolutely. I’m from an Asian immigrant family with an ethos of “work, work, work.” It was hard for me to “un-do” that conditioning and become intentionally jobless.

Climbing to the next rung on the career ladder inspired me to leap off that ladder. When I was a reporter, I offered a letter of resignation. My boss countered with a promotion and a $10,000 raise.

I gave into temptation and stayed on staff for another 8 months. Then I spotted an opening for an editor position at a wine magazine. The job sounded perfect — travel to vineyards across the world! Sip wine and edit a magazine! I applied, and out of 100 candidates, I made it into the running for the final 2 candidates.

I realized that if I accepted this job, I’d never leave. I’d never see my vision come true — a vision of traveling without responsibility, of seeing where the world would take me. At best, I’d get to occasionally take a business trip to Italy, where I’d have a nice dinner, gather a few quotes, snap some photos, and fly home after 4 days. That wasn’t the type of travel I wanted. But it would be “okay enough” — satisfactory enough — to keep me in the job.

That became the catalyst. I had to get out now, or I never would.


Launching a Biz

Q: When you returned from the trip, how did you adjust to a settled life and decide what to do next?

During the two years I traveled, my friends kept asking me the same question: How can you afford this?

It was actually fascinating to watch their assumptions. Many people try to “let themselves off the hook” by pointing fingers.

The most common assumption I heard was what I call the “Someone Else Must Be Rich” theory. My friends assumed my family was rich. My family assumed my boyfriend was rich. And on and on. Everyone pointed to someone they’d never met and declared, “That person is rich and he/she/they are footing the bill!”

There were other theories, too. Some people assumed I went into massive credit-card debt to fund the trip. One close friend from college thought I made a killing in the stock market during the height of the 2006 – 2008 bubble.

I don’t care what people assume about me. That’s their problem, not mine. But I do find it sad that people — people I love — disempower themselves by deciding that their dreams are out-of-reach.

So I decided to start a blog that encourages and inspires. Originally I was going to create a travel blog, but then I thought — there are SO many dreams out there. Why not encourage everyone, no matter what their dream is?

As for the first part of your question — “How did you adjust to a settled life?” — I never settle. I still travel frequently, and when I’m at home, I’m motivated everyday by a higher purpose — helping others through this blog.


Passive Income

Q: What is the best way for a person to generate passive income when starting from scratch?

The two most common roads are dividend investing and real estate. Dividend investing means investing in companies that pay big dividends. The idea is that you hold on to the stock and simply live off the dividends.

For example, if you had $1 million invested in dividend stocks that paid a 4% yield, you could live on $40,000 without selling off any of that stock. Or — more realistically, if you’re just starting out — if you have $10,000 invested, you could collect $400 a year, enough to pay your car insurance. If you have $1,000 invested, you can collect $40 a year and treat yourself to a birthday dinner. (Of course, if you want to reach $1 million, you’re better off re-investing that $40 dividend).

The other method — which I prefer — is real estate. Frankly, I like this method because I understand it better, and to paraphrase Warren Buffet, you should only invest in stuff you understand. Don’t be afraid to shrug your shoulders and say, “Um, I just don’t get it — and so I’m not going to invest in it.”

The key to passive income through real estate is to buy the right property. Find a property in which the water + trash + insurance + taxes + mortgage + maintenance + 1 month per year of vacancy = less than the rental income. In some cities, like Manhattan or San Francisco, this is nearly impossible to find. In other cities, like Atlanta and Cincinnati, these properties are everywhere. I own a 3-unit building in Midtown, Atlanta, that matches this description.

My most popular post, If I Had a Million Dollars, I’d Go Into Debt, outlined both these strategies. And next week I’ll share my story of trying to buy a few more properties — which I’m in the midst of doing right now.

There’s a third strategy, as well, and that’s creating a business that becomes so successful that it produces passive income. This requires a ton of work, and I’d recommend you only try this IF your goal is growing a business. If you’re motivated by money — rather than by pure love for the work — you’ll probably burn out.

Well said. Paula’s post certainly gives me much to consider. Here we go.


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