This Calculator Helps You Estimate How Much You Need to Live on Dividends
Living off dividends is the dream of many investors. If you have enough savings and investments, you can get a comfortable salary without working at all. This calculator will help you estimate how much you will need to achieve this goal.
Personal finance blog Young Adult Money has released this tool (in the form of a Google spreadsheet) that allows you to estimate how much you should invest and estimate what annual “salary” you can expect from investing in certain stocks. You can also enter how much you would like to see annually and it will tell you how much you needed to invest to bring home that lot of dividends.
Now, of course, some pretty serious caveats: To begin with, living off dividends obviously requires a huge upfront investment. This is not a quit work tomorrow program, unless you already know how to do it. And it goes without saying that keeping all your eggs in one basket is a pretty bad investment strategy.
However, this tool helps to highlight another misunderstood aspect of investing that is often overlooked by young investors. Dividends are a great way to get back money that you can reinvest, but if you save money properly over time, you can also live quite comfortably while leaving a solid nest for your kids. This calculator probably shouldn’t be your only investment advice, but it’s worth playing around with to try and imagine what your investment goals might / should be.
How much money do you need to live off dividends? | Youth Money Through Rockstar Finance