Dividend Investing Calculator
Build a portfolio that pays you. See how dividend stocks can create a growing stream of passive income over time.
"Do you know the only thing that gives me pleasure? It's to see my dividends coming in."
— John D. Rockefeller
Investment Details
Tip: Reinvesting dividends accelerates your portfolio growth through compounding. Once you need income, you can stop reinvesting.
Portfolio Value
$604,345
After 25 years of investing
Annual Dividend Income
$21,152
That's $1,763/month!
Total Invested
$160,000
Total Dividends Received
$183,413
Yield on Cost
13.2%
Effective return on your investment
Growing Dividend Income
Annual dividend income grows as your portfolio and dividend payments increase.
Portfolio Growth
The Math Behind Dividend Investing
Key Dividend Formulas
Dividend Yield
Yield = (Annual Dividend / Stock Price) × 100
Annual Dividend Income
Income = Portfolio Value × Dividend Yield
Yield on Cost (Your Personal Yield)
YOC = (Current Annual Dividend / Original Investment) × 100
Understanding Yield on Cost
This is the most powerful concept in dividend investing. As dividends grow, your "personal yield" based on what you paid can become very high.
Example (Coca-Cola):
Buffett bought at ~$3/share in 1988
Current dividend: ~$1.84/share/year
His yield on cost: 61%/year!
The market yield stays around 3%, but his personal yield is over 60% because he bought decades ago and dividends kept growing.
The Dividend Growth Formula
Future Dividend = Current Dividend × (1 + Growth Rate)Years
10 years: $1.97
20 years: $3.87
30 years: $7.61
Understanding Dividend Investing
What Are Dividends?
Dividends are portions of a company's profits paid to shareholders. Quality companies with strong cash flows often pay regular dividends, essentially paying you to own their stock.
The DRIP Effect
Dividend Reinvestment Plans (DRIP) automatically use your dividends to buy more shares. This creates a snowball effect where your dividends earn more dividends.
Dividend Aristocrats
Some companies have increased dividends for 25+ consecutive years. These "Dividend Aristocrats" demonstrate consistent growth and shareholder-friendly management.
The Buffett Approach to Dividends
Warren Buffett's Berkshire Hathaway collects billions in dividends annually from companies like Coca-Cola, Apple, and Bank of America. He bought Coca-Cola stock in 1988, and today his annual dividend from that single investment exceeds what he originally paid for it.
"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes."
Pros of Dividend Investing
- ✓ Regular passive income
- ✓ Less volatile than growth stocks
- ✓ Income grows over time with dividend increases
- ✓ Compounding effect when reinvested
- ✓ Sign of healthy, profitable companies
Things to Watch
- ! Very high yields may signal risk
- ! Dividends can be cut in hard times
- ! Tax implications in taxable accounts
- ! Lower growth potential than growth stocks
- ! Requires patience and long-term thinking