<prompt> Human: An old friend of mine was a big advocate of the following strategy: Take wagebusiness income, and invest as much as possible in passive income generating assets. Take passive income from those assets, and use it to cover as much cost of living as possible.The goal is to get to a point of financial independence, defined as being in a position where you can live entirely off passive income i.e. you dont need to work for a living. The goal also encourages frugality because you have the incentive to push down your cost-of-living so that a larger proportion of it can be covered by your passive income.I wonder how practical this is today? It seems to me the obvious caveat is tax on the passive income, when you could be putting your money in tax-deferred investments. My friend didnt have this problem because he got his business income in low tax zones abroad and isnt a US citizen no tax on worldwide income -- so effectively he was only taxed on his passive income in Canada. In terms of passive income, I am thinking mostly about publicly traded interest or dividend paying financial assets.  <response>: rfinancialindependence 