Passive Income Target Calculator NZ

This calculator works out how much capital you need invested to generate a chosen level of passive income each year, whether that income comes from dividends, interest or rental yield. Turning a vague goal like wanting passive income into a concrete number is the first real step towards financial independence, and this tool does the maths for you. You enter your target passive income per year, the net yield you expect your investments to earn after costs, and how much you already have invested. From those three figures the calculator returns the total capital needed to generate your target income, how much you still have left to invest to close that gap, the income your current investments already produce at that yield, and what your target works out to per month. Because a lower yield needs far more capital for the same income, use a realistic, sustainable net yield rather than an optimistic headline rate, ideally after tax, since this income is generally taxable in New Zealand. The figures show the income return only, not capital growth, so they understate total returns for growth assets but give an honest read on income alone. Use it to set a savings target for financial independence, and to track how close your current investments already get you. This is an indicative planning estimate only, not financial advice.

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%
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$500,000
capital needed to generate your target income
Still to invest$350,000
Income from what you have$6,000
Per month target$1,667

Use a realistic net yield, after costs and ideally after tax, since income is taxable. A lower yield needs more capital. This shows the income return only, not capital growth. Estimate only, not financial advice.

How it works

The capital you need is your target annual income divided by the yield you expect. The calculator also shows how much income your current investments already throw off at that yield, and the gap still to invest. Because a lower yield means more capital is needed for the same income, using a realistic, after-cost yield keeps the target honest.

Worked example

To earn $20,000 a year at a 4% net yield, you need $500,000 invested. With $150,000 so far producing about $6,000 a year, you have $350,000 still to invest to hit the full income target.

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Frequently asked questions

How much do I need invested for passive income?

Divide your target annual income by the yield you expect. For example, $20,000 a year at a 4% yield needs $500,000 invested. The lower the yield, the more capital you need.

What yield should I use?

Use a realistic, sustainable yield for your investments, whether dividends, interest or rent, after costs. Higher assumed yields need less capital but usually carry more risk.

Is passive income taxed?

Yes, income from dividends, interest and rent is generally taxable, so the after-tax income is less than the headline figure. Use a net yield or allow for tax when planning.