Passive Income Calculator
Estimate your potential passive income from investments, real estate, and other sources. Plan your path to financial independence.
Portfolio Passive Income
Calculate annual passive income generated from your investment portfolio based on yield and withdrawal strategy.
Multi-Stream Passive Income
Combine multiple passive income sources to see your total monthly and annual income picture.
Capital Required for Target Income
Determine how much invested capital you need to generate your desired annual passive income.
About the Passive Income Calculator
Passive income is the cornerstone of financial independence and generational wealth. Our Passive Income Calculator helps you estimate how much income your investments can generate without active work, covering dividends, bond interest, rental income, and business distributions. Whether you seek to replace earned income entirely or supplement your lifestyle, understanding your passive income potential is critical.
The multi-stream approach is particularly important for high-net-worth individuals. Relying on a single income source, even a large one, creates unnecessary risk. By diversifying across dividend stocks, bonds, real estate, and business interests, you create a more resilient income stream that can weather market downturns and economic cycles.
Our capital requirement calculator uses the well-researched safe withdrawal rate methodology to determine how much you need invested to sustain your desired lifestyle. The traditional 4% rule suggests you can withdraw 4% of your portfolio annually with minimal risk of running out over a 30-year period, though many advisors now recommend 3-3.5% for added safety.
Frequently Asked Questions
How much capital do I need for $100,000 in annual passive income?
At a 4% withdrawal rate, you need $2.5 million in invested assets to generate $100,000 annually. At a more conservative 3% rate, you need approximately $3.33 million. The exact amount depends on your investment mix, tax situation, and whether you need the income to keep pace with inflation.
What are the best sources of passive income for wealthy individuals?
High-net-worth individuals typically generate passive income through dividend portfolios, rental real estate, bond ladders, private lending, royalties, and business ownership. A diversified approach combining multiple sources provides more stable and reliable income than depending on any single stream.
Is passive income truly passive?
Most passive income requires some initial effort or ongoing management. Dividend investing requires portfolio monitoring and rebalancing. Rental properties need tenant management (though property managers can handle this for 8-10% of rent). Truly hands-off options include index fund dividends, treasury bonds, and annuities.
How is passive income taxed?
Passive income taxation varies by type. Qualified dividends and long-term capital gains are taxed at preferential rates (0-20%). Rental income is taxed as ordinary income but can be offset by depreciation. Interest income is taxed at ordinary rates. Municipal bond interest is generally tax-free at the federal level.