Live Off Dividends Calculator

Calculate Annual Income, Total Investment, or Dividend Yield





Formula

The formula to calculate the annual income needed, total investment amount, or dividend yield is:

\[ I = T \cdot Y \]

Where:

What is Living Off Dividends?

Living off dividends refers to a strategy where an individual relies on the dividend payments from their investments to cover their living expenses. This approach requires a substantial investment in dividend-paying stocks or funds, and the goal is to generate a steady stream of income without having to sell the underlying assets. The success of this strategy depends on the dividend yield and the stability of the companies or funds in which one invests. It is a popular strategy among retirees and those seeking financial independence.

Example Calculation

Let's assume the following values:

Using the formula:

\[ I = 1,000,000 \cdot 0.05 = 50,000 \]

The Annual Income Needed (I) is $50,000.