Passive Income Calculator: How Much Do You Need to Invest?
Everyone dreams of passive income, but few calculate exactly what it takes. This guide provides the hard numbers: how much you need to invest to generate specific monthly income levels from dividends, bonds, and other sources.
Your Situation
You want to generate reliable passive income of $1,000-$10,000 per month. You need to know how much to invest and the best strategies to achieve this.
Investment Required by Income Target
The amount you need depends on your yield. Dividend stocks average 2-4% yield. Bonds yield 4-5%. REITs offer 4-7%. High-yield savings accounts provide 4-5%. Here is what you need for different income targets at various yields:
| Target/Month | At 3% Yield | At 4% Yield | At 5% Yield | At 6% Yield |
|---|---|---|---|---|
| $1,000/mo ($12K/yr) | $400,000 | $300,000 | $240,000 | $200,000 |
| $2,000/mo ($24K/yr) | $800,000 | $600,000 | $480,000 | $400,000 |
| $3,000/mo ($36K/yr) | $1,200,000 | $900,000 | $720,000 | $600,000 |
| $5,000/mo ($60K/yr) | $2,000,000 | $1,500,000 | $1,200,000 | $1,000,000 |
| $10,000/mo ($120K/yr) | $4,000,000 | $3,000,000 | $2,400,000 | $2,000,000 |
Income Strategies Compared
Dividend Stocks: Blue-chip dividend stocks and dividend ETFs (VYM, SCHD) yield 2.5-4% with potential for dividend growth. S&P 500 Dividend Aristocrats have increased dividends for 25+ consecutive years. Use our dividend growth calculator to model growing income.
Bonds & Bond Funds: US Treasury bonds yield 4-5% in 2026 with minimal credit risk. Corporate bonds offer 5-7% with moderate risk. Bond ETFs (BND, AGG) provide diversified exposure.
REITs: Real estate investment trusts yield 4-7% and must distribute 90% of taxable income as dividends. They provide real estate exposure without the hassles of direct property ownership.
Building Your Passive Income Plan
Most passive income portfolios combine multiple sources for diversification. A balanced approach might be: 40% dividend stocks (3% yield), 30% bonds (4.5% yield), 20% REITs (5.5% yield), 10% high-yield savings (4.5% yield). This blended portfolio yields approximately 4.1%.
At a 4.1% blended yield, generating $3,000/month requires approximately $878,000 invested. This is achievable over 15-25 years with consistent saving and compound growth. Use our compound growth calculator to model your path.
Action Steps
Set your income target
Decide how much monthly passive income you need. Be specific.
Investment Calculator →Choose your yield strategy
Higher yield = less capital needed, but usually more risk. Balance accordingly.
Calculate the capital needed
Annual income target ÷ yield percentage = required investment.
Dividend Growth Calculator →Build a savings plan
Calculate how long it will take to accumulate the required capital with regular contributions.
Compound Growth Calculator →