I have been researching online how to create more income for myself from my savings. I have found some good ideas such as Prosper.com lending, stocks/bonds, and high yield CDs to name a few. I am also looking into more business interests that will pay off in the long run.
Today I am going to start tracking my annual residual income. I have been toying with numbers in my head. I am asking myself “How much do I really need with the plans I have in mind?” The answer is not easy. Here is what I came up with:
- $1000 per month for living expenses ($12,000 anually which is about $33 a day (highball))
- $5000 per year in airfares (highball figure)
- $2000 in unexpected expenses (medical, dental, new gear, etc)
- $1000 in misc expenses (underestimate allowance)
That puts me at $20,000 per year. That would have to adjust for inflation each year but it is somewhere to start. I am going to really shoot high and say I need $30,000 per year in residual income to have a comfort level of cash on hand. If I am way over I can always reinvest it. These are extremely high numbers on purpose. I could probably travel the way I plan on half that but I don’t want to limit myself too much.
Now the hard part is to calculate where I stand today on that $30,000 goal. I will give a a rough calculation now and create an excel sheet to help me later.
- Interest Income (Bank): 200
- Interest Income (Prosper): 161
- Stock/Bond/Mutual Fund: 200
Those numbers are annual based on quick math. This is only income and no principal is being touched. This brings my total annual income to a puny $561. I have a long way to go but I have to start somewhere. I also have to get my debts paid off so once those are taken care of I will be able to make these numbers grow a lot faster.