In this new year, we do know there will be a price hike due to the recent flood across Malaysia. East coast suffered the worst flood in 40 years. A week after the flood issue, the food price has increased 30% in any food court. Consumers start to feel the pinch even though for those state spared of the flood.
The up coming GST (Government Service Tax) will be commencing in 1st April, the consumer has to pay 6% more for all items. Could all of our salary increased in tandem? Say our hourly rate increased 6% as well for the coming salary increment?
Give myself salary increment
Yes, I would like to increase my own hourly rate from 2015 onwards. Let’s examine what is my 2014 hourly rate. My hourly rate in 2013 is only $1.64 per hour. What, your hourly last year is only $1.64 per hour? What to shout about it? It is still lower than working as Cashier in Mc Donald! Or become a hypermarket promoter can earn as much as $3.50 per hour. $1.64 per hour is way too low compare to those working at Mc Donald and Tesco.
You must be laughing at me what is this low $1.64 hourly rate? Okay, it seem that this is really low pay. Let me tell you that this is the passive income hourly rate.
For those people working at Tesco or Mc Donald rate, it is their active income. It simply means that, he/she need to be present at the workplace and only will get paid. For my passive income hourly rate, even I am sleeping or watching movie, I still get paid at $1.64.
Bear in mind that a day has 24 hours, a week has 7 days and 30 days a month. Every hour is getting paid at this hourly rate. Now, if you added up for a year, would this amount be significant? It is $18 000 a year.
How do I arrived $1.64 hourly rate?
Now, let me explain how do I created the passive income hourly rate at $1.64 per hour? I started to build my passive income portfolio since end of 2010 by acquiring positive cash flow properties.
Assuming that I have 6 rental properties and each of the properties giving me $200 positive cash flow each months. 1 month is $1200 and $14 400 for a year. Now you can do the maths by just dividing $14400 by 8760 hours
Increased my own hourly rate in 2015
This year I would like to increased my passive income hourly rate to $2.05
It will be 25% increased, good or bad now?
Now you may ask how did I do that? Is it acquired more rental properties? Selling of my properties or any other methods?
I will not selling off my rental properties which giving me positive cash flow, some may say that killing off your golden goose. Of course there are two options to achieve that.
Acquire one more rental properties which give $300 positive income now. It will give you total of $1500 per month and $18 000 per year.
Increased the rental by $50 per unit. It is 25% increased! With 6 units, immediately can get additional $300 additional passive income. This is under my own control and can be easily achieved. I will adopt the option 2 immediately. At the same time, I will keep working on Option 1 to increased my portfolio.
As we know that 2015 will be a challenging year and there will be a lot of opportunity ahead of us.
Active income hourly rate
Do not forget that while I am working on the passive income hourly rate, there is no impact on my active income hourly rate. Although in this challenging economy, I do understand that there will be no salary increment.
Let’s ponder for a while, if I do not start to invest in asset 4 years ago, would I achieve meagre $1.64 per hour now? We have to start from low and it could be as low as 50 cents per hour. But who cares? As long as you start today to invest in property or any other asset class, you will be rewarded handsomely in due time. As such from now on, let us start working on our passive hourly rate.