Living off dividends is the dream for many investors. If you have enough saved and properly invested, you can take home a comfortable salary without working at all. This calculator will help estimate how much you'll need to accomplish this goal.
Personal finance blog Young Adult Money has released this tool (in the form of a Google Spreadsheet) can take how much you have to invest and estimate what kind of annual "salary" you could expect from investing in a particular stock. You can also input how much you'd like to make annually and it will tell you how much you need to have invested in order to bring home that much in dividends.
Now, of course, the fairly major caveats: for starters, living off dividends is something that requires a massive initial investment, obviously. This isn't a quit-your-job-tomorrow scheme unless you could already comfortably do that. And, it should go without saying, having all your eggs in one basket is a pretty poor investment strategy.
However, this tool is helpful in showing yet another misunderstood aspect of investing that young investors often overlook. Dividends are a great way to get money back that you can reinvest, but if you save properly over time, you can also live fairly comfortably while still leaving a solid nest egg for your children. This calculator probably shouldn't be your sole piece of investing advice, but it's worth playing around with to try and help imagine what your investing goals could/should be.
How Much Money Would you Need to Live off Dividend Income? | Young Adult Money via Rockstar Finance
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