Starting With Rs 10,000 A Month: A Roadmap To Passive Income In 2026

Passive income has become one of the most overused phrases in personal finance — and one of the most misunderstood. Scroll through social media and it is often confused with side hustles, trading profits or weekend gigs. But real passive income is, as Rohin Pagdiwala, Founder of Pagdiwala Investments, puts it, far less glamorous and far more disciplined. And for someone starting with Rs 10,000 a month in 2026, that distinction matters.

"Passive income is something where you’re generating money for consumption or use without having to actively work for it," Pagdiwala said in a recent conversation with NDTV Profit. "If you’re doing photography, website creation or trading on the side, that’s not passive income. That’s a second or third income."

With a small monthly investment, Pagdiwala says the biggest mistake is trying to extract income too early. "You first need to build the corpus," he says, adding, "Passive income only works when there is capital working for you."

At this stage, he says, the focus should be on long-term accumulation through a mix of equity mutual funds, hybrid funds and selective fixed-income products.

Compounding, not cash flow, does most of the work in the initial phase. Drawing income prematurely risks stalling growth before the portfolio has matured.

While discipline and regular saving are essential, Pagdiwala believes product selection ultimately defines outcomes. "Behaviour matters, but products matter more," he notes. "Where you put that money will determine how much passive income you generate and for how long you can sustain it."

For most retail investors, mutual funds remain the backbone of passive income strategies due to diversification, regulation and flexibility. Once a corpus is built, investors can use Systematic Withdrawal Plans (SWPs) to generate regular income while staying invested.

Dividend-paying stocks, bonds, fixed deposits, and newer instruments such as REITs and InvITs can supplement this. He cautions that higher-risk avenues like peer-to-peer lending may offer higher returns but require attention.

When passive income does begin, expectations need to be grounded in reality. Pagdiwala points to the widely used 3-4% withdrawal rule.

"If someone has a corpus of Rs 1 crore, they can typically withdraw about Rs 3-4 lakh a year, which is roughly Rs 40,000 a month."

The logic behind this rule is capital preservation. "You want the remaining corpus to stay invested and grow at a rate faster than inflation," Pagdiwala explains.

Passive income strategies also differ sharply by age. "Younger investors are willing to take higher risk because they want financial freedom earlier," Pagdiwala says. "Older investors usually have a larger corpus and are much more conservative in how they generate income."

What works in one’s 20s may not be appropriate in one’s 50s, and asset allocation, withdrawal rates and risk tolerance must evolve with life stage, he emphasises.

Pagdiwala is particularly skeptical of the idea of retiring early without purpose. "Under no circumstances should someone think of retiring early and doing nothing," he says, because he believes it will first mentally kill the person, and then eventually cause physical damage.

He also warned about sequence-of-returns risk, which is the danger of starting withdrawals during a market downturn.

"You have to give your corpus at least four to five years before you even think of quitting your job," he says.