Residual Income Calculator


Why use the Residual Income calculator?

A residual income calculator is a tool used to calculate the amount of a person's residual income. Residual income is a person's money after all of their expenses have been paid. It is a form of passive income, meaning the money is earned without actively engaging in any work. This type of income can be used to add to a person's regular income, which can help them build wealth and get out of debt. 


How do you find residual income?

The calculator works by taking into account a person's expenses, such as rent, utilities, car payments, and other bills. It then subtracts these from the person's total available income. The result is the residual income the person has to save or invest.

 

The Residual Income Calculator formula is as follows:

Residual Income = Net Operating Income - Minimum Required Return

Example:

A company has a net operating income of $100,000 and a required return of 10%.

Residual Income = $100,000 - ($100,000 x 10%) 
= $100,000 - $10,000 
= $90,000


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