In today's video, I'm going to show you
how to make $10,000 every single month in passive income.
And if you are thinking, oh, that sounds like a lot,
I'm also going to show you how you can make $500 a month in passive income.
I am Tiffany Thomas, a financially free millionaire.
If you're looking to become one of those, make sure and hit that like button and hit
the subscribe button and we are going to dive right in.
There is a lot of talk about how to make
passive income because people are tired of trading time for dollars.
They are tired of working the nine to five and grinding all day and then coming home
and vegging out and doing it again the very next day.
And they repeat this week after week.
We don't want to be trading time for dollars for the rest of our lives.
Even if we love what we are doing,
wouldn't it be nice to have the option to not have to work if we didn't want to?
I'm sure you want to eventually retire.
So we need to make sure that you have
passive income set up so that you can retire one day.
Because we don't want to be a burden on someone else, relying on someone else
to take care of us, especially if it's our children or other family members.
We don't want to be a burden to them.
And also, if we have passive income coming
in, that means that we can most likely help someone else.
And not only that, we can donate to our favorite charity.
So if you were thinking, oh,
I just wish I could start creating a way to have that passive income so that I can
eventually retire, I'm going to share with you exactly how to do that.
A lot of people will tell you there are
a lot of different ways to make passive income.
They might have you start a business and start selling online courses.
And yes, while you create the course, while you do the upfront work and then you
sell the course later on, you still need to be promoting that course.
You still need to be advertising or marketing to people so that they know
about your course, so that they can actually purchase it.
So that doesn't always end up being a truly passive income.
And even with writing a book, yes, you write the book once and then you can
self publish and put it on Amazon and hopefully sell a lot of copies.
But if people don't know about your book,
then they aren't going to be able to buy your book.
So again, you would need to be promoting that book, putting in the work
of advertising and telling people about your book.
And some people will even say to invest
in real estate and buying physical properties.
But since I have done that, I know that is not a truly passive way to make money.
It can be semi passive.
Yes, you can collect rent every single month, but if something goes wrong
at the property then you need to go over there and take care of that problem.
Or if a tenant moves out, you need to meet with potential tenants
and find one to move in to replace the one that moved out.
And even if you hire a property manager, yes, it is going to be a lot more passive.
But the property manager will still come
back to you and make sure that they are doing things the way you want.
Them to be done and getting you to sign
off on different things whether it's a new tenant or how much you are willing
to spend on a new furnace or air conditioner, things like that.
So it's not truly passive.
There are a lot of different ideas that people are throwing out there
that they say is passive income, but really there is usually some
maintenance work that goes on with those items.
Comment below and tell me if you've tried one of these ways to make passive income
but it turned out that it wasn't so passive.
I want to share the solution that I have that is a way to truly create passive
income and that is investing in the stock market.
Once you get your stock market investments
all set up, you can automate that and make it completely passive.
And I actually did a training about this recently in my free Facebook group.
It's called investors to seven figures.
I will leave a link below and you can join
the free Facebook group and watch my training about how to automate your
stock market investing so that you really can create passive income and eventually
be able to retire and live off of that passive income.
Like I said at the beginning of the video, I was going to show you exactly how
to generate $10,000 per month in passive income and even $500 a month.
If you're thinking 10,000 sounds like too much right now.
One way to make passive income in the stock market is by using dividends.
So certain companies, not all companies,
will pay a dividend quarterly to shareholders.
If you own multiple shares of the company,
they are going to pay you more in dividends than if you just own one share.
But nonetheless,
if you own a single share, they are still going to pay you a dividend.
I want to show you a calculator.
This is from Vanguard and we can see
exactly how much money we can make from dividends.
For this example, I used a dividend yield of 1.51%. Some dividend yields could be
less than this or more than this, but this is a pretty good average and if
we wanted to make $10,000 per month, we would type in $10,000 for the income
and select month and then we put in the yield of 1.51%.
So when we hit calculate results it tells us how much money we will need invested
in order to collect that amount in dividends.
For this example,
if we had $10,000 a month in income, we would need to have a total
of $7,947,020, which might sound pretty high.
So let's just say we only want $500 a month coming in for passive income.
So if we type in 500 and calculate our results, we would need a total of $397,351
invested in order to collect $500 every single month just from dividends.
And if you're thinking how long will it
take me to make $397,000, I want to show you another calculator.
So for this one, let's say we have quite a bit of money sitting in our savings
account because we've been too afraid to invest it.
Let's say we have $50,000 and we want to get to that $397,000.
So monthly we would need to be contributing just over $4,000 and getting
a rate of return of 10%, which is pretty average for the US.
Stock market.
And over a period of five years, it would generate a portfolio of $397,434.
So if this is what you have right now, the 50,000 sitting in your savings,
and you got it invested, and then you were able to contribute just
over $4,000 a month, over the period of five years,
you would be able to start collecting $500 a month in dividends.
But here's the thing.
Maybe we don't actually want to be withdrawing those dividends.
That $500 every single month.
I want to show you another calculator that will tell us how much more we would
actually have if we decided to reinvest those dividends.
So for this example,
I just entered in that we have 100 shares of a stock that costs about $100,
and our annual dividend is going to be $13 a year per share.
And if our dividend annual growth rate was 1% and the stock price annual growth rate
was 4%, and we held this for a period of ten years and we decided to reinvest
our dividends, then our total amount would be $42,418.
And since we're reinvesting those
dividends, they would be buying more shares of the stock for us.
So we would have a total of 286 shares
instead of just the 100 shares that we started with.
So the dividend amount that we would be
making would be $23,867, which gives us an annualized return of 15.55.
Now, if we decided that we wanted to be
taking out our dividends, we can see our total value would only be
$28,539, and we would still just have 100 shares because we aren't able to buy any
more shares because we're not reinvesting that dividend amount.
So the dividends paid would be 13,736, giving us an annualized return of 11.6%.
By not reinvesting those dividends, we are losing out on about 14 grand.
And of course, if this was a larger scale
with larger numbers, it would be a lot more than that.
But I just wanted to show you what is possible.
That if you really put your mind to it and you are investing your money and you
don't really need the passive income right now, and you are willing to wait and just
use that when you are ready to retire, then you will have a lot more money
in your investment accounts going back to the $10,000 in passive income.
You don't actually need over $7 million
invested to have passive income of $10,000.
We can use what's called the 4% Rule and I explained this in another video.
I will leave a link to that above.
But you can take your annual expenses and multiply that amount by the number 25.
And once you have that amount invested,
you can start living off of your investments.
So if we did want that $10,000 per month, we would take 10,000 times twelve,
because there's twelve months in a year, we would get 120,000.
So we would take 120,000 our annual
expenses, multiply that by 25 and we would get 3 million.
So we would want to have $3 million
invested so we could live off of our investments completely passively.
And that is how we would create $10,000 worth of passive income every single month
by investing our money in the stock market.
Very, very simply.
While some people may want to just live
off of dividends, you can see that you need a lot more money invested.
But if we are looking at the full picture
at what our Financial Freedom Number should be, then we can invest up
to that amount and then start withdrawing our investments and not have to worry
about only withdrawing the dividends that we are receiving.
The earlier that we can invest and the more money that we can invest,
then the sooner we are going to reach our Financial Freedom Number and have
that option to retire to truly live off passive income.
If you found this video helpful,
please hit that like button and share it with someone else who would like to hear
this information and to the subscribe button to subscribe to my YouTube channel
and hit the little bell to get notified on when I post new videos.
And if you want to see even more content
from me, make sure you've got the videos on the side of the screen.
Thanks so much for watching.
I'll see you in the next video.