Creating a Location-Independent Income Stream Before You Retire
I still remember the exact moment it hit me. I was sitting in my downtown Chicago office staring at the grey sky when a former colleague emailed: "Greetings from Medellín! Left the rat race. Best decision ever." Attached was a photo—sun, mountains, laptop, balcony. Meanwhile, I was still at my firm, counting down to a distant retirement.
That night, I asked my wife, "What if we didn’t wait until 65 to live the life we want?" That question changed everything. Two years later, I’m writing this from Portugal, working 60% less thanks to a blend of income streams that travel with me. If you're looking to design a similar future, here are the top location-independent income strategies I've tested or witnessed firsthand.
📱 Digital Consulting in Your Field of Expertise
- ✦ Leverages your career skills with minimal startup
- ✦ High hourly rates, low time investment
- ✦ Great transition model from full-time work
Begin building credibility 12–18 months in advance. Specialize narrowly and pitch solutions—not services. Set up a basic site, build a referral network, and test small projects. You may only need a few clients to generate 60–70% of your old salary—on your terms.
Personal note: I work ~30 hours/month for two clients and earn 70% of my former income. That 30% trade-off? Worth every second for the freedom it bought.
🏠 Strategic Real Estate Investments
- ✦ Generates monthly cash flow remotely
- ✦ Strong inflation hedge and tax advantages
- ✦ Management can be outsourced
Focus on cash flow—not appreciation. Use remote-friendly markets, property managers, and automation tools. Our two Midwest homes yield $2,200/month net, with 2–3 hours oversight monthly and no in-person visits.
Personal note: We’ve never seen one of our properties in person. With systems in place, it’s real passive income.
💻 Digital Product Creation
- ✦ Build once, sell repeatedly
- ✦ Scales without more hours
- ✦ Ideal for knowledge-based careers
Courses, guides, templates, and toolkits all fall into this category. Sell via Teachable, Podia, or Gumroad. Focus on solving real problems. My healthcare guide sells 30–40 copies/month passively since launch.
Personal note: My $47 PDF on early retirement healthcare now covers our groceries—monthly—with zero promotion.
📈 Income-Focused Investment Portfolio
- ✦ Cash flow from dividends, REITs, and bonds
- ✦ Requires little monthly effort
- ✦ Supports partial or full location independence
Create a "layered" portfolio of dividend stocks (3–5% yield), REITs, bonds, and optional covered calls. Our portfolio generates $2,800/month, automatically deposited—simple, stable, and global.
✍️ Monetizing Creative Skills and Hobbies
- ✦ Turns passion into cash flow
- ✦ Often more fulfilling than corporate work
- ✦ Low startup costs, high flexibility
Photography, writing, woodworking, music—you name it. Sell prints, create digital products, freelance, or teach your craft. My friend makes custom engraved cutting boards in Portugal and ships to the U.S.—earning full-time income on part-time hours.
Income Stream Comparison
| Income Stream | Startup Time | Initial Investment | Monthly Time | Income Potential | Location Freedom |
|---|---|---|---|---|---|
| Digital Consulting | 3–6 mo | $500–2K | 20–40 hrs | $2K–10K+ | ✦✦✦✦✦ |
| Remote Real Estate | 6–12 mo | $50K+ | 2–5 hrs | $200–500/unit | ✦✦✦✦ |
| Digital Products | 3–9 mo | $1K–5K | 5–10 hrs | $1K–10K+ | ✦✦✦✦✦ |
| Income Portfolio | 12–24 mo | $100K+ | 1–3 hrs | 3–5% yield | ✦✦✦✦✦ |
| Creative Work | 6–12 mo | $500–2K | 10–30 hrs | $1K–5K | ✦✦✦✦ |
Final Thoughts: Freedom Through Income Design
Retirement isn’t all-or-nothing. These income streams open the door to "pretirement"—a stage of flexibility, autonomy, and travel, years before traditional retirement kicks in.
- Start earlier than feels necessary. It takes 6–18 months to build meaningful cash flow.
- Don’t aim to replace 100% of your salary. Focus on freedom, not perfection.
- Test your plan. Try living on your projected income for 3–6 months before big life changes.
Our income mix—consulting, rentals, digital products, income funds—covers our life abroad while retirement savings continue growing untouched. The result: control, peace of mind, and a lifestyle aligned with what we truly value.
Could you start living like you're retired—without waiting for the retirement age? The answer might be closer than you think.
About the author: Michael Donovan spent 27 years in management consulting before going location-independent in 2022. He splits his time between Portugal and Michigan and writes about pretirement and mobile income strategies.
