Everyone wants to get to that milestone of being able to retire and have so much money coming in you can do whatever you want.
How much is enough? Well you can always want to spend more but six figures is probably enough to make most people happy.
Here are the steps to getting the big investment income:
Earn
It's impossible to get anywhere financially in life if you don't have work bringing in the money.
Investing in yourself is the best way to boost your earnings. It could be a university degree, but it doesn't have to be. It could be a diploma. It could just be taking free online courses to boost your skills. Anything to show a potential employer you're the one to employ and that you have a will to learn.
If you don't think that learning is the way to earn more then you can get a second job or start your own business alongside your main income – just make sure it can go somewhere and make a profit, a hobby can end up costing money.
Avoid debt
Compound interest is a wonderful tool to increase your wealth. However, debt can make compound interest work against you.
Credit card debt, car finance and so on – you should avoid all of these as much as you can.
Pay everything with a debit card. Don't have enough money straight away? Save! And make interest work for you. Buying a house to live in is the only time I think debt is a good idea. Education debt may also be necessary, but I wish it wasn't.
Save
How much you can put into your investments is totally dependent on how much you save. If you earn $1 million after tax each year and spend $990,000 then you only have $10,000 to invest.
If you earn $50,000 after tax and spend $39,000 then you can invest $11,000 a year. See how the lower earner can put more money to work even though that person earns less?
Every household budget is different, but I'm sure there are some good savings you can create without changing your life too much.
Invest
The final step is to invest and let compounding work its magic.
It's true that an income of $100,000 still requires a large portfolio. You could just choose businesses with high yields, such as WAM Research Limited (ASX: WAX) that has a grossed-up dividend yield of 8.8%. With shares like that you'd 'only' need a portfolio worth $1.14 million.
It would probably be a good idea to also invest in shares that are growing their dividends quickly to help you grow your income at a fast pace.
