While it’s extremely difficult to try to predict where we might be in the future, it’s fun to speculate. We can never know what hardships we may run into in life making it even harder to determine what kind of situation we may be in next year or even next week for that matter.

I’ve made some extremely conservative calculations to try to figure out where I’ll be financially by the time I’m 30. I’m currently 23 for anyone who doesn’t know. I’m making all my calculations based on the fact that I’ll be working the same job, making ZERO dollars in side income per year and that I’ll have two income properties. This is very conservative. I will without a doubt make thousands of dollars in side income per year, but I’m going to assume $0.00 per year so this remains an extremely conservative number. I also have a goal to own 3+ income properties by the time I’m 30. I’m actively working on buying one now, so to say that I’ll have two by the time I’m 30 is definitely conservative, three could be a bit more challenging.

### Day Job:

I’m assuming that I’ll be working my same job for the next 7 years. Whether that’s true or not who knows! But for the sake of this calculation I’m assuming I will be. We have something called a “step program” at my job where on your anniversary date each year you get a “step” raise. We also get a contract raise every year, usually 2%. So based on the current steps (which I’m locked into so even if they add more steps it wouldn’t affect me) and a 2% raise for the next 7 years I should be making about $60,000 per year from my day job before overtime. We get a consistent amount of over time every year which I’m also not including into this clalculation, making it even more conservative.

### Dividends:

The average historical yearly dividend increase for the S&P 500 has been about 5%. So I assumed a 5% increase in dividends per year. I also assumed that I will gradually increase my contributions to my dividend portfolio as I get raises at work, which I plan to do. This calculation also assumed that I’ll maintain an average yield of 4%. With these assumptions I should be making about $7,600 per year in dividends by the time I’m 30. I also think this is a conservative number because once again I’ll definitely be making money on the side and a large majority of that money will go into my dividend portfolio.

### Rental Income:

For this one I’m going to assume I buy the house I’m currently trying to buy (2 unit) and then I buy another 2 unit. I don’t know if one will be paid off by then or both, but for the sake of this calculation it doesn’t really matter. It’s mainly a calculation of income. I’m making this calculation on the premise that I will owner occupy one unit of the five and the rent of the remaining 4 will average $750/month. That’s a pretty safe number for what I would receive today so in 7 years that may be a bit low. But for my conservative calculation it’ll do just fine. So I should be receiving roughly $36,000 per year from my two rental properties (4 units at $750/month).

This obviously doesn’t include the operating expenses of the rentals. But again, this is an income evaluation and not a calculation of expenses.

### My Conservative Income Projection:

So after all these assumptions I think I should be making roughly $103,600 per year by the time I’m 30. Granted there are things that break and what not but this isn’t an extremely specific calculation, just a fairly decent rough estimate. And this is all speculation 7 years out, I could be extremely off for all I know. I’m just taking my best guess.

Assuming these calculations are accurate. by the time I’m 30 I should be receiving a conservative $43,600 per year in passive income. To me, that’s awesome. That’s almost 50% of my projected income!

**A Less Conservative Projection:**

**Day Job:**

I make a few thousand dollars per year from overtime at my job as it is. As my pay rate increases my overtime will increase with it. $5,000 per year is a safe number to assume.

#### Rental Property:

The goal is to own 3 properties by the time I’m 30 and I don’t think this is unrealistic. If this were the case I would make another $18,000 per year roughly.

#### Side Income:

I’m certain that I will continue to earn money on the side. I think $5,000 per year is also safe to assume for this category.

#### Dividends:

With these less conservative calculations I’ll have much more money to invest, thus bringing my dividend income way up. $12,000 per year should be extremely attainable.

Total: $146,400 per year with $66,000 of that being passive income. This is definitely the number that I’m going to shoot for but even if I landed somewhere in the middle I really couldn’t complain.

This calculation also doesn’t take into consideration what my debt will look like at this point. I may have a large mortgage on the rental properties to pay off. If this is the case then all of the passive income from my rental properties would be going straight towards the mortgage. And I know for a fact all my dividends will still be reinvested at this point so I won’t be collecting it as income. Either way, it’s an interesting thing to think about and try to calculate. This reassures me that by age 35 I should be extremely close, if not already there, to achieving financial independence!

*I would love to hear some feedback from you guys! Has anyone else ever tried to figure out where they might be 5-10 years, or even longer, down the road? Is there anything else that I should include in this calculation that I may have forgotten?*

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