💰 Passive Income Calculator

Understanding Passive Income

Passive income is money earned with minimal ongoing effort or active involvement. Unlike traditional employment where you trade time for money, passive income allows you to earn while you sleep, travel, or focus on other pursuits. It's a key component of financial freedom and wealth building.

How This Calculator Works

This calculator helps you track and project your passive income from multiple sources. It considers:

• Current Income: Your existing passive income streams
• Growth Rates: Expected annual growth for each income source
• Monthly Expenses: Your cost of living to determine financial freedom progress
• Future Projections: Estimated income in 5 and 10 years with compound growth

Popular Passive Income Sources

• Rental Properties: Earn monthly rent from real estate investments (8-12% annual return)
• Dividend Stocks: Receive regular dividend payments from stock investments (2-6% yield)
• Interest & Bonds: Earn interest from savings, CDs, or bond investments (3-5% return)
• Royalties: Earn from books, music, patents, or intellectual property
• Online Businesses: Automated e-commerce, dropshipping, or SaaS products
• Affiliate Marketing: Earn commissions promoting other people's products
• Digital Products: Sell courses, ebooks, templates, or software
• YouTube/Content: Ad revenue from evergreen content
• Peer-to-Peer Lending: Earn interest by lending money through platforms
• REITs: Real estate investment trusts that pay dividends

The Path to Financial Freedom

Financial freedom occurs when your passive income exceeds your living expenses. Here's the typical journey:

• 0-25% Coverage: Getting started - every dollar counts
• 25-50% Coverage: Building momentum - significant progress
• 50-75% Coverage: Approaching freedom - major milestone
• 75-100% Coverage: Nearly there - work becomes optional
• 100%+ Coverage: Financial freedom achieved - passive income covers all expenses

Tips for Building Passive Income

• Start with one income stream and master it before adding more
• Reinvest earnings to accelerate growth through compounding
• Diversify across multiple income sources to reduce risk
• Focus on scalable income streams that can grow without proportional effort
• Be patient - most passive income takes time to build initially
• Track your progress monthly to stay motivated
• Continuously educate yourself on new passive income opportunities
• Automate as much as possible to truly make it passive

Important Considerations

While called "passive," most income streams require significant upfront work or capital investment. True passive income is rare - most require some ongoing maintenance. Tax implications vary by income type, so consult with a tax professional. Always consider risk factors and don't invest money you can't afford to lose. Building substantial passive income typically takes years of consistent effort and smart investing.