Jakarta, CNBC Indonesia – Sam Dogen's story is an example. That, passive income can make someone retire early faster.
Imagine, when people his age were working hard, Dogen was determined to retire early at the age of 32. This is after having passive income of US$ 80,000 or Rp. 1.2 billion.
Now I don't regret the decision to retire at all. Because his passive income has now jumped to US$ 380,000 or Rp. 5.9 billion per year.
Even though he was already unemployed, he was successful, Sam Dogen told CNBC Make It that the results he obtained were a long journey spanning 12 years. For him, to be able to have that amount of passive income, someone must do the following two things.
1. Bond Investment
Dogen said, bonds are one of the safest investments. Because it is issued and supported by the government, which has never failed to pay its debt so far.
Bonds also provide big profits, even if there is an increase in interest rates in the short term. As a test, someone can buy bonds with a term of 1 year with a return of around 5%.
“You could buy a $1,000 bond tomorrow with a 5% guarantee, and you wouldn't have to pay state income taxes,” says the book's author Buy This, Not That the.
Apart from bonds, Dogen also advises people to invest in shares. He talked about owning shares in the S&P 500 which could produce a return of 1.5%.
However, this man who was born in 1980 also noted that don't just choose stocks returnsit's big. However, also choose one that can provide dividends for at least 25 consecutive years.
“Large companies, like McDonald's, have good cash flow and often pay out large dividends,” he suggests.
2. Property Investment
Dogen agrees that investing in the property sector does require time and effort. However, property can provide benefits that increase passive income per year.
““I recommend that everyone own property by owning your primary residence, especially if you know where you want to live for at least five years,” Dogen said.
Apart from that, property investment can also make someone more economical because they don't need to spend any more money, for example, to rent a house. If someone buys property, then expenses will be reduced and can be diverted to investment in other sectors.
“Once you have property, life becomes a little easier,” he said.
Thanks to these two methods, Dogen admits that he can now have passive income of IDR 5.9 billion per year. However, Dogen also reminded that there were times when the decision to retire made him feel bored. So, everything needs a process and time.
[Gambas:Video CNBC]
(mfa/sef)