Start from a real fund’s dividend history, add what you can invest each month, and find the month your dividends start paying your bills.
Schwab U.S. Dividend Equity ETF SCHD
Dividend data as of 2026-08-07, from this security’s own payment history.
On: every dividend buys more shares. Off: you take the cash and your share count only grows with new money.
These three numbers decide everything below. We prefill them from real data where we have it — change any of them when you disagree.
Prefilled from SCHD’s last 12 months of dividends divided by its current share price.
Prefilled from SCHD’s dividend growth over its last five complete years.
Deliberately modest at 5%. High-yield funds have historically delivered more of their return as income and less as price.
Every rate is clamped to a sane range, so a shared link can never produce a fantasy. Dividends are voted on by a board every quarter — they are not contractual, and they can be cut.
Your projection
That is $28,088 a year from a portfolio worth $451,405 — a yield on cost of 21.6%.
Income in year 1
$439
Dividends paid over the period
$170,882
Money you put in
$130,000
Dividends are reinvested, so every payment buys shares that pay their own dividend next time. That second-order effect is the snowball.
The link carries your inputs only. Nothing is stored on our servers.
Milestones
The month your projected dividend income first covers each bill. Change any amount to your own.
The first bill most people cover, usually years before the big ones.
Small, unavoidable, and due every single month.
The point where dividends start covering a real necessity.
The big one. In most plans this is the last to fall.
Every amount is editable. The defaults are round numbers, not a claim about prices where you live.
The three layers add up to the portfolio value exactly. With reinvestment off the middle layer is zero — those dividends went to your bank account instead.
Yield on cost measures the dividend against the money you actually paid, so it climbs as the dividend grows. It is a nice number to watch and a bad number to decide with — it says nothing about whether the shares are worth buying today.
Every year up to year 10, then every fifth year.
| Year | Monthly income | Annual income | Yield on cost | Portfolio value | You invested |
|---|---|---|---|---|---|
| 0 | $26.00 | $312 | 3.1% | $10,000 | $10,000 |
| 1 | $36.57 | $439 | 2.7% | $17,084 | $16,000 |
| 2 | $58.42 | $701 | 3.2% | $24,790 | $22,000 |
| 3 | $83.82 | $1,006 | 3.6% | $33,193 | $28,000 |
| 4 | $113 | $1,360 | 4.0% | $42,379 | $34,000 |
| 5 | $148 | $1,771 | 4.4% | $52,443 | $40,000 |
| 6 | $187 | $2,249 | 4.9% | $63,499 | $46,000 |
| 7 | $234 | $2,803 | 5.4% | $75,675 | $52,000 |
| 8 | $287 | $3,448 | 5.9% | $89,118 | $58,000 |
| 9 | $350 | $4,197 | 6.6% | $103,999 | $64,000 |
| 10 | $422 | $5,069 | 7.2% | $120,516 | $70,000 |
| 15 | $1,014 | $12,172 | 12.2% | $237,097 | $100,000 |
| 20 | $2,341 | $28,088 | 21.6% | $451,405 | $130,000 |
Year 0 shows today’s forward rate. Later years show the dividends actually received during that year.
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Pick a dividend payer
Search any ticker, or click one of the popular ones. We load its real dividend history, its trailing yield and its annualized dividend growth. No ticker in mind? Switch to manual mode and type a yield.
Enter what you are actually investing
A starting lump sum, what you add each month, and how many years you want to look ahead. Both amounts are in the security’s own currency — we never convert behind your back.
Decide about reinvestment
DRIP on means every dividend buys more shares, which then pay their own dividends. That compounding is the whole snowball. DRIP off models taking the income as cash.
Argue with the assumptions
The yield and growth rate are prefilled from real data, but they are still assumptions about the future. If you think the dividend growth of recent years will not repeat, lower it and watch what happens.
Read the milestone strip
It shows the month your dividends first cover a streaming subscription, a phone bill, groceries and rent. Edit those amounts to your real bills — that is where the projection stops being abstract.
Real figures from each security’s own payment history, not a marketing sheet. Each one has a worked example page.
| Ticker | Name | Trailing yield | Dividends per share (12m) | Dividend growth, annualized | Pays |
|---|---|---|---|---|---|
| SCHD | Schwab U.S. Dividend Equity ETF | 3.1% | $1.05 | 9.1% | Quarterly |
| JEPI | JPMorgan Equity Premium Income ETF | 8.0% | $4.58 | 3.2% | Monthly |
| JEPQ | JPMorgan Nasdaq Equity Premium Income ETF | 10.9% | $6.52 | 10.6% | Monthly |
| VYM | Vanguard High Dividend Yield Index Fund ETF Shares | 2.2% | $3.63 | 3.8% | Quarterly |
| VIG | Vanguard Dividend Appreciation Index Fund ETF Shares | 1.5% | $3.58 | 9.1% | Quarterly |
| DGRO | iShares Core Dividend Growth ETF | 1.9% | $1.48 | 7.1% | Quarterly |
| O | Realty Income Corporation | 5.2% | $3.24 | 5.1% | Monthly |
| KO | The Coca-Cola Company | 2.4% | $2.08 | 4.5% | Quarterly |
| MO | Altria Group, Inc. | 6.3% | $4.24 | 4.1% | Quarterly |
| T | AT&T Inc. | 4.7% | $1.11 | -11.8% | Quarterly |
| MAIN | Main Street Capital Corporation | 7.5% | $4.30 | 13.4% | Monthly |
| HDV | iShares Core High Dividend ETF | 3.1% | $0.88 | 1.9% | Quarterly |
Dividend data as of 2026-08-07, from each security’s payment history.
The same worked example, run on the other securities in this set.
A dividend snowball projection is only as honest as the assumptions inside it. These are the ones that most often go wrong.
A high yield is usually the market pricing in a cut, not a gift. If a stock yields 12% while its sector yields 3%, the market is telling you it does not expect that dividend to survive.
Dividend growth matters more than starting yield over long horizons. A 2% yielder growing 10% a year overtakes a 5% yielder growing 2% a year within about 15 years — try it above.
Total return is what actually funds your life. A company can pay a dividend out of debt while the share price falls; you get income and lose capital.
Check the payout ratio, not just the yield. A dividend consuming 95% of earnings has no room to grow and very little room to survive a bad year.
Reinvesting is not automatically right. If you are still accumulating, DRIP is usually the better default; if you are living off the portfolio, taking the cash is the point.
Tax changes the answer in most countries. Dividends are typically taxed when paid, even when reinvested, so a taxable account compounds more slowly than this projection shows.
Concentration risk is the quiet one. Building an income stream out of three high-yield stocks means one dividend cut removes a third of your income overnight.
Deeper guides on our blog that build on the topics in this tool.
| Term | What it means |
|---|---|
| DRIP | Dividend ReInvestment Plan. Every dividend automatically buys more shares of the same security instead of landing as cash. Those shares pay their own dividends, which is what makes the growth compound rather than add. |
| Yield on cost | This year’s dividend divided by what you originally paid, rather than by today’s price. It rises as the dividend grows and can reach eye-watering levels after decades — but it is a historical record, not a reason to hold. |
| Dividend growth rate | How fast the dividend per share increases, usually quoted as a compound annual rate over five or ten years. It is the single assumption this calculator is most sensitive to. |
| Trailing yield | The dividends actually paid over the last twelve months divided by the current share price. Backward-looking and therefore honest, unlike a forward yield that assumes the next payment. |
| Ex-dividend date | The first day a share trades without the right to the upcoming dividend. Buy on or after it and you do not receive that payment; the price typically drops by roughly the dividend amount on that day. |
| Payout ratio | The share of earnings (or of free cash flow, which is stricter) paid out as dividends. Low leaves room to grow and to survive a downturn; above 100% means the company is paying you with borrowed money or savings. |
| Accumulating vs distributing | A distributing fund pays dividends out to you. An accumulating fund reinvests them inside the fund, so you see the value in the price and receive nothing. Accumulating share classes are common in European UCITS funds and cannot produce an income stream. |
| Dividend aristocrat | An S&P 500 company that has raised its dividend every year for at least 25 consecutive years. A useful screen for durability, though past increases guarantee nothing. |
| Qualified dividend | A US tax classification for dividends taxed at long-term capital-gains rates rather than ordinary income rates, subject to a holding-period test. Other countries have their own — and quite different — rules. |
You buy shares that pay dividends, and instead of spending those dividends you buy more shares with them. Those new shares pay dividends too, so next quarter’s payment is slightly larger without you adding a penny. Add fresh money each month on top and the income grows from three directions at once: your contributions, the reinvested dividends, and the company raising its dividend per share.
While you are still building, almost always — it removes the decision, the cash drag and the trading cost, and it is the difference between adding and compounding. Toggle it off above and watch the final income fall. It stops being obviously right once you are living off the portfolio, or when reinvesting would push you further into a position you are already overweight in.
Among widely held US-listed funds, JEPI and JEPQ distribute monthly, as does the REIT Realty Income (O) and the BDC Main Street Capital (MAIN). Most broad dividend ETFs — SCHD, VYM, VIG, DGRO, HDV — pay quarterly. Monthly payment is a cash-flow convenience, not a better investment: it does not raise your total return.
The dividend you now receive divided by the price you originally paid. If you bought at $50 and the annual dividend has grown from $1.50 to $4.00, your yield on cost is 8% while a new buyer at $100 gets 4%. It is a satisfying number and a poor decision tool — the market does not care what you paid.
Divide your annual spending by the portfolio yield. At a 3.5% yield, $40,000 a year needs about $1.14 million; at 6% it needs about $667,000 — but a 6% yield usually carries considerably more risk of a cut. Set your rent milestone above to your real rent and the calculator will show you the year, not just the target.
Usually it is a warning rather than an opportunity. A yield that high is either the market pricing in a cut, or a fund manufacturing income by selling options or returning your own capital. Covered-call ETFs can genuinely distribute 8-12%, but they cap their upside to do it, so the share price tends to lag. Read what is actually funding the distribution before you model it.
In most countries, yes — the dividend is taxable when it is paid, whether it lands in your bank account or immediately buys more shares. That means a taxable account compounds more slowly than this projection shows. Tax-sheltered accounts avoid the drag; the exact rules depend entirely on where you live and are outside this tool.
You can, but you gain nothing. The share price typically falls by roughly the dividend amount on the ex-dividend date, so you have simply converted part of your capital into a taxable payment. This is known as dividend capture, and after costs and tax it usually loses money.
A distributing fund sends its dividends to you. An accumulating fund reinvests them internally, so the value shows up in the share price and you receive nothing. The total return can be identical, but an accumulating fund has no income stream, which is why this calculator says so and switches to manual mode when you enter one.
Mathematically, no — a dividend and a sale of the same size leave you in the same place before tax, since the price drops by the dividend. Psychologically and practically, many people find income they never have to decide to take far easier to live on, and it removes the risk of selling into a crash. Both are valid; the difference is behaviour and tax, not magic.
Often enough to plan for. Dividends are declared by a board each period, not contracted, and 2020 alone saw large cuts and suspensions across energy, travel and banking. AT&T (T) is the cautionary example in this very tool: its annualized dividend growth is negative because it halved its payment in 2022. A projection that assumes uninterrupted growth is a best case, not an expectation.
The arithmetic is exact; the inputs are guesses. It compounds monthly using the yield, dividend growth and price growth you supply, and the starting yield and growth rate come from that security’s real payment record. Everything after today is an assumption — no dividend increase is promised, no price path is guaranteed, and tax is not modelled. Treat the output as a way to compare plans, never as a forecast.
Every number after today rests on assumptions you can change, and changing them changes the answer a lot. Dividends are declared at a board’s discretion and can be reduced or stopped at any time — several of the securities on this page have done exactly that. The calculator ignores tax, fees, foreign withholding and currency moves, all of which reduce real income. Past dividend growth does not predict future dividend growth. This is educational information, not investment advice; you are responsible for your own decisions, and a regulated adviser is worth the money for the big ones.
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