Small Bills, Big Lesson
We all have those small bills that hit our account every month, Netflix, Spotify, Hulu, or that gym membership we keep meaning to cancel. Ten or twenty bucks here and there doesn’t feel like much, but over time, it adds up.
One day, while going over my cash flow, I noticed something that made me stop. One of my mortgage notes was paying me enough each month to cover my Netflix bill. That might not sound huge, but it completely changed how I thought about money.
That single note reminded me that financial freedom isn’t built on big risks or massive wins. It’s built on steady, predictable income that covers real-life expenses. You don’t need millions sitting in a bank account. You just need consistent monthly cash flow that takes care of the life you want.
Let me explain how it works.
Step 1: The Borrower Sends a Payment
When someone buys a home, they sign a mortgage note. It’s a simple agreement to pay the lender over time with interest. Most people assume only banks can own those notes, but that’s not true. Regular investors can own them too.
When you buy a note, you step into the bank’s shoes. The borrower still owns their home, but now you own the debt tied to it. Each month, they send you a payment for principal and interest. That payment comes in whether the stock market is up, down, or sideways.
Think of it like this: instead of writing checks, you’re cashing them. Notes turn debt into steady, reliable income backed by real property.
Step 2: I Earn Predictable Interest Income
Every payment that comes in includes interest, and that’s your profit. Unlike rent or dividends that can change every month, note income is fixed by the terms of the loan. You know exactly what’s coming and when it’ll arrive.
For example, let’s say you buy a $50,000 note at 10% interest. That note will pay you around $430 every month. The borrower pays you, you collect, and the cycle repeats. It’s consistent and predictable, two words that make investors sleep better at night.
It’s not flashy or complicated, but it works. Predictable beats possible every time. That steady income is what lets me use my note payments to cover everyday bills like Netflix, coffee, or my phone.
Step 3: A Small Slice Pays My Streaming Bill
Here’s where it gets fun. My Netflix bill is about sixteen dollars a month, and one small performing note I own pays me more than $400 each month. So I take a small slice of that payment and use it to cover Netflix.
It’s a tiny expense, but it represents something much bigger. If one note can cover Netflix, another can cover:
- My internet bill
- My phone bill
- My electric bill
- Even my mortgage payment
Every bill I replace with note income gives me a little more freedom. That’s the heart of what I call Mailbox Money. It’s not about chasing huge paydays. It’s about stacking predictable income streams until your life runs on autopilot.
Step 4: The Rest Builds Long-Term Wealth
Once your daily expenses are covered, the rest of that note income builds wealth. Each payment includes both interest, your profit, and principal, your money coming back. Over time, the balance owed on the note gets smaller while your returns keep coming in.
Eventually, you’ll recover your full investment plus interest. Then you can take that money and buy another note. It’s a simple, repeatable cycle that compounds faster than you might think.
Imagine if every bill you have, Netflix, internet, utilities, groceries, was paid for by your notes. That’s not just financial freedom. That’s financial peace.
Why This Works
Notes give you three major advantages that most investments can’t match:
- Predictability: You know when and how much you’ll be paid.
- Security: Every note is backed by real property, not stock market hype.
- Flexibility: You can buy small notes, large notes, or even partial ones.
This isn’t about getting rich quickly. It’s about building a dependable income that keeps showing up while you live your life. You don’t need 100 rental properties or complicated financial tricks. You just need a few solid notes that pay you every month.
A Real Example
Let’s break it down with numbers. Suppose you buy a note secured by a $100,000 home. You pay $50,000 for the note with a 10% interest rate. The borrower sends you $877 each month.
With that one note, you can cover Netflix, your phone bill, and still have plenty left to reinvest. That’s real freedom, not hype, not luck, just math and consistency.
Why I Prefer Notes Over Rentals
Rentals can be rewarding, but they come with problems like tenants, repairs, and those 2 a.m. phone calls. Notes are different. The borrower handles the property while you collect payments.
Stocks can swing wildly with market news, but notes stay steady. You’re not betting on emotions or trends. You’re earning based on agreed payments. And if the borrower stops paying, you have rights to the property, which gives you built-in security.
If you want to dive deeper, check out my book:Mailbox Money Retirement