CNBC make it 2024-02-06 10:50:56

Early retiree who earned $380,000 in passive income last year: The ‘best option’ to get started

Sam Dogen knows a thing or two about passive income.

By the time he left his investment banking day job in 2012, Dogen, the founder of Financial Samurai and the author of “Buy This, Not That,” had built up about $80,000 in annual income outside the office. Combined with a hefty severance he negotiated for, he determined that was enough money to live on.

It was for a while, but when he and his wife decided to stay in San Francisco and have a couple of kids, the family’s cost of living shot up. By reinvesting his passive income along with money he made through his website and book sales, Dogen was able to boost the family’s income over the years as well.

In 2023, Dogen’s passive income portfolio, which includes stock, bond and real estate investments, among others, generated about $380,000.

If you’re looking to build a similar stream of passive income, you’ll have to start somewhere — and likely without the help of an investment banker’s salary or severance package. According to Dogen, the best way to begin earning passive income is through your brokerage account.

“If you want passive income right now, I think the best option is Treasury bonds at 5%,” he says. “It’s amazing.”

How to use your brokerage account to earn passive income

You can buy Treasury bonds through most major online brokerages, as Dogen points out. Treasurys are considered among the safest possible investments because they are issued and backed by the U.S. government, which has never defaulted on its debt.

And given the recent rise in short-term interest rates, short-dated Treasurys — known as T-bills — look particularly attractive. A 1-year Treasury currently pays an interest rate of 4.73%, with shorter-dated bonds yielding even more.

“Right now, Treasurys are the most attractive, with 1-year Treasury bonds yielding about 5%,” Dogen says. “You can buy a bond for $1,000 tomorrow for 5% guaranteed, and you don’t have to pay state income tax [on the interest income].”

You can earn passive income by investing in stocks, too. Dogen has a large portion of his equity holdings in an index fund that tracks the S&P 500. While you may not think of a broad market index fund as an income-producing investment, it is. Stocks in the index currently yield an average of 1.5%.

You can keep a broad equity exposure while earning more income by choosing a dividend-focused mutual fund or exchange-traded fund, says Dogen. He suggests shopping for a fund that tracks so-called “Dividend Aristocrats” — companies that have maintained and raised a dividend payout for at least 25 consecutive years.

“These are larger-cap names, like McDonald’s, that have good cash flow and pay higher dividends,” he says.

Stocks in the S&P 500 Dividend Aristocrats index currently yield about 2.6%, on average.

Investing in real estate: Get to ‘neutral’

Stock and bond distributions have a couple of advantages over other forms of passive income. For one, you don’t need much money to start. Buy one share (or even a partial share) of an ETF, and you’re in.

The other advantage is that it’s truly passive. The same can’t be said of real estate, says Dogen. Although profits he earns from his rental properties factor into his passive income calculation, he’s the first to tell you that managing properties requires time and effort.

“Being a landlord is not passive income. It’s semi-passive,” he says. “And if you’re unlucky, it’s active income with a lot of headaches.”

Getting into the landlord game might not be the place to start your passive income journey, but you’d still be wise to start saving for at least one down payment, Dogen says: your own.

“I recommend everybody get neutral real estate by owning your primary residence, especially if you know where you want to live for at least five years,” Dogen says.

Owning a home gets you to “neutral” on real estate, he says, because renters are counting on housing costs staying where they are or falling.

“You probably shouldn’t be renting forever, because there’s a history of real estate going up [in value],” Dogen says. By owning, you essentially ride the ups and downs of inflation and housing prices while building equity in your home at a regular, fixed cost.

A few years after you buy, your real housing costs will likely feel significantly cheaper, he says, because because your payments remain the same despite generally rising salaries and housing costs.

In short: “Once you get neutral real estate, life gets a little bit easier.”

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CHECK OUT: ‘Loud budgeting’ is mentally and financially ‘healthy,’ says expert—and it’s good etiquette too

We’ve studied over 30,000 couples—here are 6 phrases you’ll hear in the most successful relationships

A healthy relationship doesn’t mean that there’s never any fighting. Couples can have disagreements and still be on each other’s side.

As psychologists, we’ve been happily married for 35 years, and we’ve found that in conflict, your mission is to allow yourself to be vulnerable — to turn attack and defend into self-disclosure and openness.

The language of ‘fighting right’

When conflict arises, the happiest and most successful couples use a language of repair and collaboration. This is something that anyone can learn to do.

We’ve organized our suggestions into six categories of phrases and what kind of repair they help with. These are tried-and-true phrases for calming down an escalated conflict, pulled from years of observation of over 30,000 couples:

1. “I feel”

Use this when you need help expressing your emotions in the moment.


  • “I’m getting scared.”
  • “Please say that more gently.”
  • “That hurt my feelings.”
  • “That felt like an insult.”
  • “I feel blamed. Can you rephrase that?”
  • “I feel like you don’t understand me right now.”

2. “I need to calm down”

Use this when you start feeling flooded and/or need a moment of repair.


  • “I need your support right now.”
  • “Just listen to me right now and try to understand.”
  • “Can I have a hug?”
  • “This is important to me. Please listen.”
  • “Can you make things safer for me?”
  • “Can I take that back?”

3. “I’m sorry”

Use this when you need help phrasing an apology.


  • “My reactions were too extreme. I’m sorry.”
  • “I really blew that one.”
  • “Let me try again.”
  • “I want to be gentler to you right now and I don’t know how.”
  • “I can see my part in all this.”
  • “How can I make things better?”

4. “Stop action”

Use this when you are flooded and need a break.


  • “I might be wrong here.”
  • “Please let’s stop for a while.”
  • “Give me a moment. I’ll be back.”
  • “Let’s start all over again.”
  • “Let’s agree to disagree here.”
  • “I’m feeling flooded. Can we take a break and talk about something else for a bit?”

5. “Getting to yes”

Use this when you want to validate your partner or meet them halfway.


  • “You’re starting to convince me.”
  • “I agree with part of what you’re saying.”
  • “Let’s compromise here.”
  • “I never thought of things that way.”
  • “I think your point of view makes sense.”
  • “What are your concerns?”

6. “I appreciate”

Use this when you want to make a repair and add positivity.


  • “I love you.”
  • “I understand.”
  • “One thing I admire about you is…”
  • “This is not your problem, it’s our problem.”
  • “Thank you for…”
  • “I see your point.”

Small repair phrases prevent major damage

Think of a repair as anything that shifts the conversation toward the positive. Make that your goal and work as a team to open up to each other.

The most basic repair is a straightforward apology: “I’m sorry” or “I’m sorry I said that — let me try again.”

It can also take the form of empathy or validation: “I understand how you feel” or “That makes sense, when you put it that way.”

It can be voiced admiration: “You know what I really appreciate about you? How much you care about our kids. We’re disagreeing over which school to pick, but I love how much it matters to you that they have a good education.”

Remember, what determines the success or failure of a relationship is how you each respond to the repair.

Dr. John Gottman and Dr. Julie Schwartz Gottman are the co-founders of The Gottman Institute and Love Lab. Married for over 35 years, the two psychologists are world-renowned for their work on relationship stability and divorce prediction. They are also the co-authors of “Fight Right: How Successful Couples Turn Conflict into Connection” and “The Love Prescription: Seven Days to More Intimacy, Connection, and Joy.” Follow them on Instagram and Twitter.

Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD.

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I’ve studied over 200 kids—here are 6 things kids with high emotional intelligence do every day

As parents, we want so many things for our children — good health, success, happy relationships, and purpose in life.

One thing we can do to try to guarantee these things is to help them develop emotional intelligence skills, which are key predictors for happiness and success.

How do you know if your child is on the right track? As a conscious parenting researcher and coach, I’ve studied the behaviors of over 200 kids, and I’ve found that those with high emotional intelligence do six key things:

1. They recognize non-verbal cues

Like an emotional detective, they are good at grasping other people’s feelings by picking up on their body language and facial expressions.

They might say, “Mom, my friend Sarah was really quiet today. I asked if she wanted to play, and she said no. I think she was sad about something.”

How to build this skill: Have reflective conversations with them about their day and discuss emotions they observed in people they interacted with. These chats strengthen their ability to read emotions and boost their confidence in understanding others.

You can ask, “What kind of a mood do you think your classmate was in today?”

2. They show empathy and compassion

They not only identify others’ emotions, but also show real concern and offer help. 

During a playdate, for example, your child notices her friend looking upset because he didn’t win a game. She walks over to him and says, “You played really well! Do you want to play something else together?”

How to build this skill: The most powerful way for parents to inspire empathy in their child is to model it themselves.

If a neighbor is unwell, you could say, “I’m worried about Mrs. Brady. Let’s check on her and see if she needs help with anything.”

3. They can name their emotions

Emotionally intelligent kids are great at sharing their feelings.

When your child says, “I feel frustrated because I can’t solve this puzzle,” or “I’m happy because I helped my friend fix her toy,” they’re recognizing and communicating their emotions. 

How to build this skill: Make it a point to label your emotions: “I feel disappointed that I can’t find my keys,” or “I’m a bit overwhelmed with all the work I have to do.”

This helps normalize discussing emotions, making it more natural for your child to do the same. 

4. They are adaptable

A child capable of smoothly navigating changes in routines, or handling disappointing news with calmness, is showing emotional maturity.

When an outdoor picnic is cancelled due to rain, for example, instead of feeling upset or throwing a tantrum, your child calmly accepts the change: “Oh, it’s raining. Let’s have an indoor picnic!” 

How to build this skill: Again, it starts with the parent. Being flexible and calm in our own reactions models adaptive behavior for our children to emulate. 

Take it further by inviting your child to problem-solve and brainstorm a solution: “What can we do instead?”

5. They are good listeners

Emotionally intelligent kids can pick up on subtle cues that others may miss. 

When you tell them about your day, they’re doing more than just listening; they’re tuned in and picking up on the emotions behind your words. They ask questions and show genuine curiosity. 

How to build this skill: When your child has a story to tell, give them your full attention. Make eye contact, stop everything else you are doing, and get to their level. Reflect and repeat back what they are saying to show them you’re really listening. 

6. They can self-regulate

Emotionally intelligent kids can handle big feelings, stay calm when things get tricky, and make smart choices.

Picture your child playing a game with friends and losing a round. Instead of reacting out of frustration, a kid who is good at self-regulation might take a moment to catch their breath, and then jump back in with a positive mindset.

They keep cool and carry on, even after disappointment. 

How to build this skill: Resisting our own little “tantrums,” such as yelling or overreacting, is a fundamental way to encourage this skill in children.

You can also introduce a “pause and breathe” technique, where you teach your child to take a deep breath or count to 10 in difficult moments. Let them watch you do it as well. 

When kids see us handle tough times with grace, it’s a lesson they won’t forget.

Reem Raouda is a certified conscious parenting coach and founder of The Connected Discipline Method, a coaching program for parents of strong-willed children. Follow her on Instagram and TikTok.

Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say, and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD.

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46-year-old early retiree who had $380,000 a year in passive income heads back to work—here’s why

For the first time since 2012, Sam Dogen is getting a day job.

That’s the year that Dogen quit his job as an investment banker, having spent 13 years working, saving, investing and generally burning himself out.

At age 34, his portfolio and real estate investments were generating about $80,000 a year — enough for he and his wife to live on in perpetuity. So, he took his severance and left. His wife did the same in 2015.

“We’ve been a dual, no income household for a while,” Dogen, the founder of Financial Samurai and the author of “Buy This, Not That,” tells CNBC Make It.

Well, not W-2 income anyway. As the couple’s plans changed, the $80,000 a year they thought would last them for life needed to be bumped up. In 2017, the pair welcomed their first child, followed by another in 2019.

Over the years, Dogen built his passive income streams to about $380,000 annually — $288,000 net of taxes. That was enough to cover the family budget while living in San Francisco — until now.

In a recent post on his website, Dogen, now 46, detailed his choice to sell a portion of his stock and bond holdings to buy a multimillion-dollar house in cash.

By swapping income-producing assets for a house, “I basically have a lot more dead money now,” Dogen says. That means his passive income streams no longer cover his family budget — so back to work it is.

Giving up financial independence was always part of the plan

The headline on Dogen’s post reads, “Blew Up My Passive Income, No Longer Financially Independent.” That’s true, although like all good headlines, it makes things sound sudden and exciting and new.

After 12 years of financial independence, Dogen knew giving it up for a while was a possibility. In fact, he sort of planned on it.

After his younger child was born, “I made a promise to be a stay-at-home dad for five years. Then they go to school full-time, and I would like to do something else, like consult or work,” Dogen says. “My daughter is going to school full-time this September. So I said OK, I believe the best time to own the nicest home you can afford is when your kids are at home.”

By buying the home in cash, Dogen sacrificed his financial independence — a state in which your investment and passive income covers your living expenses — for the time being.

Between his four rental properties, distributions from his portfolio and other forms of passive income, such as book royalties, Dogen estimates he’ll bring in about $230,000 in nonworking income in 2024. That puts him about $113,000 short of his estimated expenses for the year at what he calls a “realistic and comfortable” lifestyle.

Dogen’s plan going forward

In the short term, Dogen hopes to pick up a consulting job, which would see him work about 20 hours a week for a salary of about $145,000. That would cover this year’s shortfall while still allowing him to spend ample time with his children before and after school.

Over the intermediate term, he hopes to build his passive income streams back to where he’s once again financially independent. One avenue, he says, is eventually selling the house he and his family are vacating, but he doesn’t currently view San Francisco as a seller’s market.

“We’re past the bottom of the San Francisco real estate downturn,” he says. “We’re gonna pick up over the next several years because of artificial intelligence and technology and everything. So I want to rent [the house] out for now.”

He thinks he could collect a little more than $100,000 in annual rent, for a net profit of about $40,000 — money he can use to help build his investments back up. The same goes for an eventual sale.

In the meantime, Dogen says he’s excited to put his efforts into something else now that he and his wife are scaling back their hours, as it were, being full-time parents.

“The more you invest in something, like being a stay-at-home parent, the more you have to fill this void of emptiness once they go to school full time,” he says.

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Want to land your dream job in 2024? Take CNBC’s new online course How to Ace Your Job Interview to learn what hiring managers are really looking for, body language techniques, what to say and not to say and the best way to talk about pay. Get started today and save 50% with discount code EARLYBIRD. 

CHECK OUT: ‘Loud budgeting’ is mentally and financially ‘healthy,’ says expert—and it’s good etiquette too

Etsy seller whose side hustle brings in $169,000 a year: No. 1 tip for making money during inflation

This story is part of CNBC Make It’s Six-Figure Side Hustle series, where people with lucrative side hustles break down the routines and habits they’ve used to make money on top of their full-time jobs. Got a story to tell? Let us know! Email us at

Six months ago, Tim Riegel bent over his computer, reviewed his monthly earnings statement and saw that his highly lucrative side hustle was making less money.

He was shocked — until he realized just how much inflation was impacting his business.

Riegel’s side hustle, Mozark Fire Pit Studio, was successful immediately upon launching in 2021. He started by sourcing, welding and selling 275-pound steel fire pits to his neighbors in Lamar, Missouri, a rural town of 4,000 people two hours south of Kansas City. Within six months, freight trucks were delivering his products to Etsy buyers across the U.S. and Canada.

The business brought in $50,000 in sales in just five months on the platform, according to documents reviewed by CNBC Make It.

Staring at his screen, Riegel, 60, noticed that his volume of orders was still high. But his profit margins were shrinking, because the cost of recyclable steel, gas and packaging supplies were climbing.

He’s far from alone. Between April 2021 and April 2023, everyday essentials like groceries, utilities and gas cost Americans 20%, according to a CNBC Make It analysis of consumer price index data.

While keeping an eye on his competitors, Riegel raised his prices to get his margins back into the 35% to 40% range, he says. He added new features to his products — more color and customization options — to help justify the price increases for consumers.

Today, his fire pits cost an average of $950, up from $650 since fall 2022 — and in the last 12 months, Mozark has brought in $169,000 in sales.

If he’d waited any longer, the price jumps would have been higher, and customers could have bolted, Riegel says. His No. 1 lesson: Reevaluate your prices on a monthly basis, so you can gradually raise them instead of jolting your customers with larger, more sporadic increases.

Here, Riegel discusses his pricing strategy, the skills you need to start a side hustle like his and how he balances the time-consuming gig with his full-time job and personal life.

CNBC Make It: How do you decide on your side hustle’s pricing? Were you worried that raising your prices would scare away customers?  

Riegel: In today’s climate, you have to really watch the costs — of everything from fuel to your supplies — to make sure paying yourself what you need to pay yourself.

It can get away from you, and the next thing you know, you’re watching your margins dwindle. If you’re not making a profit, it’s not worth spending the extra 40 hours per week.

I didn’t want to price myself out of the market, either. I’m constantly looking at my competitors — not just on Etsy, but throughout the U.S. — to see who’s making similar types of pits, and their pricing. I make sure to stay within that ballpark.

As for consumers, I’ve been able to keep prices steadier by reducing my freight costs, which I’m able to do now that my volume is so much higher.

Do you need cash or specific skills to start a fire pit side hustle?  

You need cash, at least to start trying. I’m sure people can replicate it, if they have similar skills — like welding, creativity and the know-how to source the steel.

I use Facebook Marketplace to get a lot of supplies. Some things would be harder to copy: I have nearly two decades of welding experience, and not everybody can do patina, color or add the customizations that I can do design-wise.

If someone places an order on Esty, they might say, “Hey, I want a fourth handle,” or “I want my lid to look like this,” I can adjust accordingly to meet their needs.

Knock on wood, but I’ve never gotten less than a five-star review on Etsy. I think that’s also because I spend three hours per week talking to my customers via text. I send them photos of their fire pits before I ship it, and I contact them after they’ve received it to make sure they’re happy.  

You said this side hustle adds at least 40 hours to your full-time workweek. How do you balance that with your personal life?

In the last year, I started working at as a general manager in a sheltered workshop called Lamar Enterprises. That, combined with my past experience restoring cars and working for a furniture company, has helped me get really good at predicting lead times.

My side hustle production schedule is more or less scheduled around my private life. I know how long it’s going to source everything and make it, no matter what variations the person adds. I can be flexible, and as I schedule my pits, I also schedule date nights with my wife.

It helps to have a good partner or a spouse that understands. It’s a lot of work. But the thing that keeps me going is I just really like doing it.

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Take your business to the next level: Register for CNBC’s free Small Business Playbook virtual event on August 2 at 1 p.m. ET to learn from premier experts and entrepreneurs how you can beat inflation, hire top talent and get access to capital.

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