How Much Passive Income Is Enough?

How Much Passive Income Is Enough?

Last modified: April 4, 2022

FAQ
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Passive income is income derived from techniques where you don’t technically do any work to complete the purchase. For instance, you don’t render unique services or provide products to the customer. Therefore, there is unlimited potential to earnings because there are no limited capacity issues, with a few exceptions.

However, how much passive income is enough? Here are a few ideas on how you can determine what level of passive income you would like to earn to have a comfortable life.

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Lifestyle Needs

The first thing that you need to determine is how much money you would like to live off. So many people think that they would like to earn millions. However, this is very unlikely. There are different stages of passive income.

Those just starting will likely be losing money. Those who are starting to see a return, but have less than $300 a week are considered to be beginners. Then some are earning less than $3000 a week are considered intermediate.

Those who are earning more than $3000 are considered to be highly-proficient passive income business persons.

Some are earning more than $3000 a day. These people are considered the experts.

However, there are very few who earn more than $3000 a day. 48% of affiliate marketers (the biggest passive income option) earn about $20,000 a year. And only 3% of affiliate marketers earn about $150,000 a year.

So you need to be more realistic. How much do you want to earn? Do you want to earn a full-time salary or do you want to earn just a little extra to increase your disposable income?

Tax Purposes

Another factor to consider is how much do you want to earn without facing significant tax issues. Sometimes earning too much can mean that you’re paying lots more tax. And this might be something that you want to avoid.

However, you might want to speak to an accountant. They might be able to find ways that you can make claims against your earnings that reduce the tax burden on you. There are also accounting apps that can do this for you like one that can connect Sage Pay.

How Much do you Want to Do?

Another factor is that you might want to consider what you want to do in life in general. A passive income does not mean that you don’t do anything. There are going to be lots of times that you will need to work.

For instance, there is marketing, website maintenance, writing blog content and more.

Therefore, consider how much work you want to do and for how much an hour. If you want to work for 30 hours a week, for instance, at $25 per hour, then you need to earn $750 a week in passive income.

Final Word: How Much Passive Income Is Enough?

There are many ways to calculate how much income you need. However, if you’re wondering ‘how much passive income is enough?’, then you might need to consider lots of different factors. Just look above for some of the factors that you need to consider and work out your income level from there.

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