Converting your ETF assets into free days
With this passive income calculator I translate your invested money into time of your life. You enter the current value of your ETFs and your monthly living costs. The result shows how many days of your life your portfolio already funds on paper, every month and every year.
Two further figures are added: the days whose costs you still have to cover in other ways, and the additional capital you need. This shows you both where you stand today and the gap until your expenses are fully covered. You do not need to enter your age or a savings rate for this. The calculator only looks at your existing capital and your current needs.
A free day here means that the costs of an average day of your life are covered by the assumed ETF return. It says nothing about vacation days or the working hours in your contract. Weekends cost money too. That is why I calculate with all the days of a simplified month and not just working days.
How I calculate your passive income
The calculation starts with a fixed assumption: your ETF assets deliver 4% a year that would be available to live on after taxes and inflation. So I multiply your capital by 0.04. Then I divide the annual amount by twelve to get the average monthly amount.
The 4% is a simplified model assumption. The calculator works out neither your personal tax nor future inflation. Both are already included as a flat allowance in the assumed available return. It would therefore be wrong to cut the result again afterwards by the same deductions. Your actual returns and deductions can turn out considerably different.
The assumed return is also not a promised ETF distribution. Money to live on can come from distributions or from sales. This calculator does not set a payout plan and does not simulate fluctuating share prices. It makes one simple relationship visible: more invested capital at the same costs means more time of your life funded on paper.
Example: $560,000 invested and $6,000 monthly costs
With $560,000 in ETF assets, the assumed 4% gives an annual amount of $22,400. Spread over twelve months, that is around $1,866.67 a month. With monthly living costs of $6,000, a day of your life in the simplified 30-day month costs exactly $200.
Now I divide the available monthly amount by these daily costs. This gives 9.33 free days per month. Over twelve months that is 112 free days per year. The calculator uses the unrounded values internally. That is why the annual figure comes from the complete calculation and not from the rounded monthly figure.
The remaining 20.67 days per month are not yet funded by the portfolio. That corresponds to 248 days per year. In money, this leaves a monthly gap of around $4,133.33. In this model you would have to cover this amount from work or other income. Your actual additional income is not asked for here.
Why $30,000 can fund one free day a month
With living costs of $3,000 a month, your average day costs $100. ETF assets of $30,000 give $1,200 a year at an assumed annual return of 4%. That is $100 a month and therefore exactly the cost of one day.
So the statement is: $30,000 funds one free day every month if you need $100 a day. Over a year, that is twelve free days. It is about days funded again and again as long as the model assumptions hold, not about a single free day in total.
At $6,000 of monthly costs, on the other hand, a day costs $200. One free day a month would then require $60,000. The price of a free day depends on your standard of living. A fixed sum such as $30,000 therefore only applies together with the matching expenses.
How much capital you still need to live off your investments
To cover your expenses in full, I scale your monthly costs up to a year and divide them by 0.04. That equals your monthly living costs times 300. With a monthly need of $6,000, this gives a target capital of $1,800,000.
From this target I deduct your existing ETF assets. At $560,000, this leaves $1,240,000 of additional capital still needed. This gap is an amount of wealth. It is neither a monthly savings rate nor a prediction of when you will reach the target.
If your capital is already at or above the target, the calculator shows 30 of 30 free days and no negative gap. Any capital surplus is shown separately. More money does not give a month extra calendar days. For a calculation with age, pension and monthly savings, use my financial independence calculator.
Which amounts belong in the two fields
For “Your ETF assets”, what counts is the current portfolio value. Your earlier contributions may differ from it. Do not enter a future savings amount or a hoped-for inheritance. An emergency fund you want to leave untouched does not belong in the capital that is meant to fund your living costs. A home you live in yourself does not automatically generate the ETF return assumed here either.
For “Your monthly living costs”, what counts is your full monthly budget. That includes housing, food, insurance, transport and your usual leisure costs. Spread larger annual expenses over twelve months. If, for example, you plan $2,400 a year for travel, you add $200 a month for it.
Use today’s dollar amounts for both fields. The result is also meant in today’s purchasing power. A change in your costs has a direct effect on your free days. Even with an unchanged portfolio, a lower monthly budget can increase the share that is funded. The calculator shows this relationship immediately, without making a personal spending decision for you.
The limits of the simplified calculation
I use 30 days per month and therefore 360 days per model year. That way the monthly and annual views match exactly. The annual figure is not a count of real calendar days with 365 or 366 days. A partially funded day is shown proportionally, for example as a third of a day.
A constant available return of 4% is not lifelong protection. Nor should it be confused with a guaranteed safe withdrawal. The Morningstar study on retirement withdrawals, for example, works with defined time periods, portfolio mixes and probabilities of success. This simple calculator does not include a test of that kind.
For context, you will find more in my article on the four percent rule. If you also want to use up your capital, the retirement withdrawal calculator is the right fit. For building your wealth further, there is the ETF savings plan calculator. Here, one single question comes first: how much of your life today does your existing portfolio already fund under the fixed assumption?