Passive Income Calculator

A $250,000 portfolio generates $7,500 per year at a 3% dividend yield, $10,000 at 4%, $12,500 at 5%, and $15,000 at 6% — between roughly $625 and $1,250 per month before tax. At the 3.5–4.5% yields typical of a diversified dividend portfolio, a practical planning range is roughly $730–$940 per month. That won't replace a salary, but it can cover a car payment, utilities, or a meaningful slice of a mortgage while the portfolio keeps compounding underneath it.

A $1,000,000 portfolio pays $30,000 per year at a 3% yield, $40,000 at 4%, $50,000 at 5%, and $60,000 at 6% — that is $2,500 to $5,000 per month before tax. Because most of that income can be qualified dividends taxed at 0% or 15%, the after-tax figure is often close to the headline number for a retiree with no other income. The mix matters: reaching 5–6% usually means adding REITs or covered-call funds, which trades some dividend growth and safety for the higher current payout.

A $100,000 portfolio produces $3,000 per year at a 3% yield ($250/mo), $4,000 at 4% ($333/mo), $5,000 at 5% ($417/mo), and $6,000 at 6% ($500/mo). The first $100,000 matters far more than these figures suggest: reinvested dividends plus annual dividend raises mean the income stream itself grows every year, and each new contribution buys additional yield. Most investors who reach $100,000 find the second $100,000 arrives noticeably faster than the first.

Use the Rule of 72: divide 72 by your income's annual growth rate. When you reinvest a 4% yield and your holdings raise dividends 6% per year, your income compounds at roughly 4% + 6% = 10% annually, so it doubles in about 72 ÷ 10 ≈ 7.2 years. At an 8% combined rate the double takes about 9 years; at 12%, about 6 years. This is why dividend-growth investors accept lower starting yields — a growing payout that doubles every 7 years overtakes a static high yield well within a typical accumulation timeline.