Enter the monthly passive income you want and see how much money it takes, at the yield and tax rate you choose
"How do I make $2,000 a month in passive income?" has an arithmetic answer before it has a strategy answer: income ÷ yield = the money you need. At a 4% payout, $24,000 a year needs $600,000. The calculator runs that for any goal, adds tax, and shows how long your savings rate takes to get there.
Capital needed = yearly income ÷ yield. Halve the yield and you double the capital. That is why chasing a high yield is tempting and dangerous: a fund paying 10% needs far less money on paper, but yields that high usually come with a falling share price or a payout that gets cut.
| Monthly income | At 3% | At 4% | At 5% | At 6% |
|---|---|---|---|---|
| $500 | $200,000 | $150,000 | $120,000 | $100,000 |
| $1,000 | $400,000 | $300,000 | $240,000 | $200,000 |
| $1,500 | $600,000 | $450,000 | $360,000 | $300,000 |
| $2,000 | $800,000 | $600,000 | $480,000 | $400,000 |
| $2,500 | $1,000,000 | $750,000 | $600,000 | $500,000 |
| $4,000 | $1,600,000 | $1,200,000 | $960,000 | $800,000 |
If the goal is $2,000 to spend, the investments have to pay more than $2,000. Qualified dividends and long-term gains are taxed at 0%, 15% or 20% federally depending on income; interest from savings accounts and bonds is taxed as ordinary income. Inside a Roth IRA, qualified withdrawals are tax-free. Set the tax field to the rate that applies to you; the calculator grosses the goal up before dividing by the yield.
The yield is an assumption you choose, not a promise. Savings account and Treasury rates move with the Federal Reserve; broad stock-index dividend yields have been low single digits for years; rental property returns depend on the property. The 4% figure is used here because it is also the starting withdrawal rate in the well-known "4% rule" research on retirement spending — a planning convention, not a guarantee.
If the capital number is out of reach, most "passive" income people actually earn is semi-passive: a rental, a vending route, digital products or a small content business that needs a few hours a month. They need less money up front and more of your time. The income-types guide separates the two honestly.
How big a dividend portfolio or how many rental doors it takes to reach $10,000 a month, next to the service and product routes.
About $600,000 at a 4% yield, before tax, or $480,000 at 5%. To have $2,000 to spend after a 15% tax, it is about $706,000 at 4%.
From investments alone it takes roughly $1.2 million at a 4% yield. Most people reaching that level combine investment income with semi-passive businesses and rental income, which need less capital and more time.
$450,000 at a 4% yield, $360,000 at 5%, before tax.
Rarely. Yields that high usually reflect risk: a falling share price, heavy leverage or a payout the company cannot sustain. Judge an income investment on total return, not yield alone.
No. It is arithmetic on assumptions you enter. Speak to a licensed adviser before making investment decisions.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.