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.


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...


Thank for visiting my site.

Mainly comes from rental, dividends, interests.


Have you started your journey towards financial freedom?