Let's assume a person needs 3 thousand dollars for expenses (rent/food/etc) in one month and wants to invest in bonds to make passive income. How much money would he have to invest in bonds to make this happen? How much money does an average bond make?
note: complete newb I know nothing about bonds
I'm assuming you are buying bond mutual funds or bond etfs here, not the actual bonds directly.
There are a significant variety of different types of bond funds, reflecting the sort of bonds they invest in. For example, you can invest in risky, non-commercial grade bonds, also known as junk bonds. Or you can invest in short-term bonds, which are much safer but return much less. There's no such thing as the 'average bond'.
So, let's go for somewhere in the middle. Let's go for 3% return, after fees.
Now, it's fairly simple math. You want $3,000 a month, or $36,000 a year. To generate that sort of return, you'd need to invest $1,200,000. If we are more optimistic, we could go for a 4% return, after fees. That reduces your investment to $900,000.
Note that it would almost certainly not make sense to invest all that money in bonds. Instead, you'd want to invest in a mix of stocks and bonds. This could likely reduce your risk while increasing your expected return.
