Brett from Niche Laboratory here.
In this article I’ll take a look at something a lot of people often wonder:
How much passive income do you need?
I guess the important qualifier here is… for what?
Once you have a steady source of passive income, what do you want to do with it?
I’m a long time member of the Warrior Forum, and I see a lot of posters on there trying hard to make enough passive income to quit their 9 to 5 jobs.
It can be done, but it’s a long shot. It also involves a fair amount of luck.
Personally I think that you’re better off building a steady career and using your passive income from side hustles as a nice nest egg. In fact, some of the most successful business people are those who start a side hustle while they’re in their boring 9 – 5 jobs, and turn it into a full time business.
I almost achieved this back in 2002 when I started my software business after noticing a neat tool we used as part of the software development process. I say almost because with hindsight I should have charged much, much more for my products. Doh!
Money brings options.
So with that in mind, how much passive income do you need to make a really big difference to your life?
I’ve been making passive income online since 1998, and I have to say the magic figure is £600 a month, which roughly translates to around $1000 USD a month.
When you’re starting out blogging or doing some other kind of side business, $1000 a month is what you should initially aim for.
Of course you should shoot for the stars and aim for $10,000 or even $100,000. But first you need to get to $1000. Actually first you need to get to $100 a month. That’s the major milestone, because it proves you can make money. After that you’ve just got to scale the business, and do more of what’s already working.
So why is $1000 a good figure to aim for?
I’ve found it’s a useful amount to have on top of a day job. If you invest $1000 a month for a few years then it will very quickly compound up to a nice nest egg.
$1000 a month is also a good sum of money if you want to go and live in another country for a while.
In 2013 I took a career break and went to live in China and Thailand for a while. $1000 a month was easily enough to live on in these countries.
So as you can see, I believe $1000 is a good figure to aim for when you’re trying to build some passive income. It’s definitely achievable. You don’t necessarily need to reach that figure by blogging either. Etsy, Amazon and eBay all offer great opportunities to make some extra money. And don’t forget the real world as well. There are plenty of busy professionals who will give you cash in return for taking care of their boring everyday tasks like dog walking, cleaning and decorating.
Is $1000 enough passive income or should we be aiming for more? Have you reached this figure yet? If you have (or even if you haven’t) then post your experiences below.