How much is your annual passive income?

Originally Posted by Unregistered

I suppose you are clueless about CPF and your story just falls apart.

CPF works like this. If you made money from property investments and liquidated them, CPF only takes back what you originally took out from your OA for the property purchase and any interest accrued from that amount. Profits from the sale go right into your pocket. Likewise rentals collected from property purchased with CPF money also goes into your pocket.

For CPFIS, only 35% of OA can be used for investment.

haha u actually believe any of the bs here is true in the first place? this thread is as credible as the how much you earn annually thread, 99% bs answer 1% serious question

Currently my passive income from investments is $5.5k pm. Hope to grow it to at least $8k pm by my targeted retirement age 44.

If my children give us allowance once they start work, it will be a bonus. I will not downgrade from my 4 bedder condo so that my children or even grandchildren in the future can visit us and use the spare rooms, gym, tennis court and swimming pool.

Oh well, I supposed you dont believe that people can actually amass more than $1m in their CPF accounts by their mid 50s?

My wife and I did. We are currently 56.

You can ask me how if you want to know.

Originally Posted by Unregistered

haha u actually believe any of the bs here is true in the first place? this thread is as credible as the how much you earn annually thread, 99% bs answer 1% serious question

Its always good to set goals. They provide motivation for us to strive for the better.

You didnt say how old you are, so cannot gauge how many years you have before you hit 44.

Sharing from my own investment journey, it took us a good many years to reach our current passive income level of $150k pa.

The average return from our investment is 5%. So you can imagine that for every extra $1k of passive income, we would need to inject an additional $20k of capital into our investment be it stocks or other instruments. Also as the investment size grow bigger, you tend to take less risks, meaning that some of your investment may not even give your 5% returns.

In your case, to go from $5.5k pm to $8k pm (or an additional $2.5k pm or $30k pa) at an average rate of return on investment of 5%, you will need to inject a capital of $600k into your investment holding. Assuming 5% returns, to achieve your current $5.5k pm (or $66k pa) passive income, your current invested capital would be $1.32m. It would be unwise to chase high returns without due considerations of the attendant risks.

How many years do you have before you reach 44, and how much savings you have each year will determine whether you can hit your target of $8k pm by that time. For us, our savings rate only started to accelerate after we turned 50. That was when our liabilities and financial obligations started to taper off while our salaries were peaking. Each year we kept setting "new records" in our yearly savings.

Originally Posted by Unregistered

Currently my passive income from investments is $5.5k pm. Hope to grow it to at least $8k pm by my targeted retirement age 44.

If my children give us allowance once they start work, it will be a bonus. I will not downgrade from my 4 bedder condo so that my children or even grandchildren in the future can visit us and use the spare rooms, gym, tennis court and swimming pool.

Originally Posted by Unregistered

Its always good to set goals. They provide motivation for us to strive for the better.

You didnt say how old you are, so cannot gauge how many years you have before you hit 44.

Sharing from my own investment journey, it took us a good many years to reach our current passive income level of $150k pa.

The average return from our investment is 5%. So you can imagine that for every extra $1k of passive income, we would need to inject an additional $20k of capital into our investment be it stocks or other instruments. Also as the investment size grow bigger, you tend to take less risks, meaning that some of your investment may not even give your 5% returns.

In your case, to go from $5.5k pm to $8k pm (or an additional $2.5k pm or $30k pa) at an average rate of return on investment of 5%, you will need to inject a capital of $600k into your investment holding. Assuming 5% returns, to achieve your current $5.5k pm (or $66k pa) passive income, your current invested capital would be $1.32m. It would be unwise to chase high returns without due considerations of the attendant risks.

How many years do you have before you reach 44, and how much savings you have each year will determine whether you can hit your target of $8k pm by that time. For us, our savings rate only started to accelerate after we turned 50. That was when our liabilities and financial obligations started to taper off while our salaries were peaking. Each year we kept setting "new records" in our yearly savings.

Thanks for the comments. I am quite confident of reaching at least $8k passive income goal by 44 as long as my working income is stable for the next 8 years, currently 36 yo. If all goes well might even be able to retire 1-2 years earlier.

My passive income is about $50k a year comprising $40k from stocks and $10k from property. Yield from property is very low. Would probably do better to liquidate the property and put the money in stocks. Hoping for property market to recover.

I don't spend much. Passive income more than covers annual expenses. Feeling lazy and very tempted to quit my job and do something part-time. But looking at the job market and how so many people who are laid off seem to have difficulty finding a similar-paying job, makes me think twice. Also thinking may be good to build a bigger buffer in case of inflation and unexpected needs.

Originally Posted by Unregistered

My passive income is about $50k a year comprising $40k from stocks and $10k from property. Yield from property is very low. Would probably do better to liquidate the property and put the money in stocks. Hoping for property market to recover.

I don't spend much. Passive income more than covers annual expenses. Feeling lazy and very tempted to quit my job and do something part-time. But looking at the job market and how so many people who are laid off seem to have difficulty finding a similar-paying job, makes me think twice. Also thinking may be good to build a bigger buffer in case of inflation and unexpected needs.

You can retire in luxury in Malaysia NOW.

$50k gets you RM157k. You can rent a luxury condo, drive a luxury car and go holidays to Europe twice a year.

When investing for passive income, the size of your investment capital matters. Here are the maths.

If the ROI is 10%, and you want to have $50k pa in passive income, you will need to invest $500k.

At 5% ROI, you will need $1m investment capital to get $50k pa in passive income
At 3% ROI, you will need $1.67m investment capital
At 2.5% ROI, you will need $2m investment capital

If you upped your passive income target to $100k pa, then

At 10% ROI, you will need $1m investment capital
At 5% ROI, you will need $2m investment capital
At 3% ROI, you will need $3.34m investment capital
At 2.5% ROI, you will need $4m investment capital

When you invest big big, you will tend to spread your investment basket so as to mitigate your risks. You will have some high returns and some lower returns (but lower risks). The average ROI will generally be around 5% for most people.

For us, our investment is spread over three main types of instruments - stocks, property and bonds/FDs/CPF which provide us a total passive income of $150k pa. The capital appreciation/ loss of our investment is not included.

Originally Posted by Unregistered

Oh well, I supposed you dont believe that people can actually amass more than $1m in their CPF accounts by their mid 50s?

My wife and I did. We are currently 56.

You can ask me how if you want to know.

Yes I would like to know. Can you share how both of you managed to hit $1mil in CPF accounts by Mid 50s?

Originally Posted by Unregistered

Yes I would like to know. Can you share how both of you managed to hit $1mil in CPF accounts by Mid 50s?

Since age 29, we have been topping up our cpf OA SA with our full salary