Personally I have met with few closed friends and they are multi-millionaires. One of them is public figure who is very success in the Internet Marketing and one of them is a professional trader who trade for living and later I tell you what do I mean “trade for living”.
These two people are my friends and who I admire most because of their success stories. Just few days ago I met my “trading” friend who earn a livings by trading the financial market. We are having a coffee session and I ask him a question about passive income.
Jeremy:” Bro, if we want to generate passive income, how much is enough?
Justin:”That’s a very general question, you need to workout the money that is enough for you to earn for living. For examples:
If you are currently earning $5000/mth, based on the bank annual interest rate about 4%/year. You need to have at least $1.5mil in bank to gain monthly interest of $5000/mth.
What does he mean here? Let me do a recap here.
If you have $1.5mil in the bank with annual FD (fixes deposit) interest of 4%. The interest would be $1,500,000 x 4% = $60,000 per year.
In 1 year, we earn $60,000. How about monthly? That’s about $60,000 / 12 months = $5000 BINGO!
So, if we deposit $1.5mil in the bank with annual interest 4%, we able to generate passive income of $5000/mth. Then that $5000 is our passive income!
So the next BIG question is, how to earn $1.5 millions?
But in the mean time, at least we have a clear goal on how much do we need to earn passive income in order to place our current job? This is just an ordinary passive income model using Bank FD rate. In reality, who has $1.5 million assets or cash?
So let’s workout a plan together, how much do you need per month in order to quit your day job and start earning passive income.