Calculate the required capital
Estimated capital = target monthly income × 12 ÷ annual dividend yield. Express the yield as a decimal: 4% becomes 0.04.
At a hypothetical constant 4% yield, $500 × 12 ÷ 0.04 gives CAD$150,000. This is a gross estimate before taxes, fees and any withholding. Inflation is not included.
Compare your assumptions
These scenarios demonstrate a formula, not a recommended yield or investment. A higher quoted yield can reflect a falling share price or a distribution that may change.
| Hypothetical yield | Capital for $500/month |
|---|---|
| 3% | CAD$200,000 |
| 4% | CAD$150,000 |
| 5% | CAD$120,000 |
| 6% | CAD$100,000 |
Monthly average versus actual payments
Annual income of $6,000 averages $500 a month. A portfolio of quarterly payers can still deliver much more in some months and very little in others.
Use the calculator to test an income assumption, then the calendar to examine available or estimated payment dates. Your income target and your cash-flow schedule answer different questions.
Revisit the scenario
Compare several yields instead of selecting only the highest one. Recalculate when a company changes its dividend or when the USD/CAD rate moves.
Your investments can lose market value even when dividends continue. Dividend yield is therefore different from total investment return.