Most 29-year-olds are just getting started in their careers, perhaps having bounced around a few jobs early on before finding their footing. But for Steven Keys and his wife Lauren, turning 29 meant being able to retire from full-time work.
Despite modest salaries, they were able to keep their costs extremely low and save and invest the majority of their incomes in order to reach financial independence.
Now, they’re able to cover 100% of their living expenses through passive income from investment returns. However, just because they technically haven’t needed to work for the past few years doesn’t mean they’re avoiding work entirely. Instead, they continue to seek new projects and can be more selective about what they take on in retirement.
The Goal of FIRE (Financial Independence, Retire Early)
“For us, financial independence and early retirement is all about opening up options in life. Once you are free from working ‘because you have to,’ you’re free to work, play, or relax whenever you want to,” said Keys.
On the work front, one project for Steven and Lauren has been creating the blog and social channels for Trip of a Lifestyle, where they document their personal finance journey and share personal finance tips. Although the passive income from Trip of a Lifestyle has been modest — roughly $100 or so per month — they donate 100% of net affiliate profits, so making money that way hasn’t necessarily been a priority.
Recently, however, their work has turned to creating CramBetter, an online college math and science tutoring service, alongside one of their friends, Marty Parks. That service is more of a full-fledged business that can generate passive income online.
Setting the Wheels in Motion
Many people think of passive income as easy money, but the challenge is often putting in the upfront work to find a business model that can continue to generate revenue when you’re not actively working. That’s what the Keys are doing with CramBetter.
“Our first year in business was almost entirely spent creating content for the platform — study guides, practice questions, solutions, and video lessons. That first year of work was absolutely the opposite of passive income,” Keys said.
“Now that the vast majority of our foundational content has been created, it can be re-curated and reused for different schools and courses across the nation, which requires very little additional effort,” he added.
With the wheels in motion, and after reaching profitability in December 2023 after about half a year in business, they can now generate more passive income as the business scales.
“Because the business is based on a subscription model, each customer acquisition creates a recurring stream of revenue — and often a lot of word-of-mouth referrals — leading to a scalable, increasingly passive source of income over time. The business is also conducted 100% online, asynchronously, and never requires in-person or remote obligations at any specific times,” said Keys.
Fulfilling a Dream
Although the Keys don’t necessarily need the passive income from CramBetter, their work reflects a desire to start their own business, which is something that other retirees may be able to relate to. If you’re 65, for example, perhaps you’ve spent most of your life doing work for others and now want to create your own business to earn some extra passive income, despite being retired.
“A big part of our reason for starting CramBetter was just to answer one of our ‘what-if’ questions. We always wanted to start a business, but we never took it seriously before reaching financial independence because we weren’t willing to take the necessary risks. Now that our bills are covered automatically by income from our investments, we feel much freer to experiment and try new things, including travel, leisure, and business,” said Keys.
And while some retirees might question why they should generate passive income if they don’t need the money, it can still be freeing to earn more, especially if you don’t have the pressure of having to meet your baseline necessities.
“What we’ll do with the extra money is an interesting question. The real answer is ‘we’re not sure,’ because we’re pretty happy with our low-spending life as it is right now. If we accidentally become ‘too rich,’ we might move to a new home and/or increase our contributions to charity over time. But the best thing about extra money is that it gives you unlimited options,” said Keys.
Ultimately, generating passive income in retirement can take many different shapes, and it’s important to find something you enjoy building, otherwise that can defeat the purpose of retirement.
“Our goal is to experience a lot of different stuff in our limited time on this planet, instead of spending it doing the same thing every day. And hopefully we can help some other people along the way,” said Keys.
More From GOBankingRates
Source: I Retired Young and Make Passive Income Online — Here’s How
