Thursday, November 5, 2009

Reinvest money from passive income

In my cash flow diagram, I mentioned about the reinvestment of money from passive income can help you achieve financial freedom faster. I will use my example as show below to demonstrate my point.

As you can see, my passive income has almost reached $850 per month, which means about $10K per year. I will be using this money to reinvest in stock/ETF. Assume I get 5% dividend from the $10K, which is calculated to be $500 or about $40 per month. In that sense, for every year my passive income will at least increase by $40 per month. As I am applying the power of exponential here, the increase in passive income per month will be higher for each year.

Let say my saving for one year is $20000(just a figure that I put in for demonstration), and I use it for investment. That will give me $80 per month.

So in total, my passive income will increase $40 + $80 = $120 per month every year.

I am waiting for STI to be 2500 or 2800 before I will invest again. So for now, I will relax myself and focus on other things. Having a peaceful and undisturbed mind and a winning strategy are keys to successful investment.

2 comments:

MariaOzawa said...

Just wondering, where did the passive income of 740.15 came from? thanks.

By the way, I like your site very much. Thanks for sharing. The world is a better place bcos of people like you.

Freedom Achiever said...

Hi,

Thank for visiting my site.

Mainly comes from rental, dividends, interests.

Regards

Have you started your journey towards financial freedom?

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