From €0 to €1,000 in monthly dividends
The Strategic Newb Editorial Team
Updated:
Translated from the original; figures and sources have been preserved. Read the original →
Assumptions
- starting capital of €0
- full reinvestment
- effective total return of 7% per year as a calculation assumption; this includes dividends, so dividends are not added again
- contributions at the end of each month; monthly return (1.07)^(1/12) − 1
- nominal amounts without inflation adjustment; actual returns vary
- target capital of €300,000
- eventual dividend yield of 4%
- fees and taxes excluded
The calculation uses capital = monthly contribution × ((1 + monthly return)^number of months − 1) ÷ monthly return. We round up to the first full month in which the target is reached.
Result
| Monthly contribution | Time to approximately €300,000 |
|---|---|
| €500 | 21 years and 11 months |
| €1,000 | 14 years and 8 months |
| €1,500 | 11 years and 3 months |
Why €300,000?
€300,000 × 4% = €12,000 in gross annual dividends, averaging €1,000 per month.
Milestones with €500 per month
- €30,000 → 4 years and 4 months
- €75,000 → 9 years and 1 month
- €150,000 → 14 years and 8 months
- €225,000 → 18 years and 9 months
- €300,000 → 21 years and 11 months
Milestones with €1,000 per month
- €30,000 → 2 years and 4 months
- €75,000 → 5 years and 3 months
- €150,000 → 9 years and 1 month
- €225,000 → 12 years and 2 months
- €300,000 → 14 years and 8 months
Milestones with €1,500 per month
- €30,000 → 1 year and 8 months
- €75,000 → 3 years and 9 months
- €150,000 → 6 years and 8 months
- €225,000 → 9 years and 1 month
- €300,000 → 11 years and 3 months
Return scenarios
| Contribution | 5% | 6% | 7% | 8% |
|---|---|---|---|---|
| €500 / month | 25.4 years | 23.5 years | 21.9 years | 20.6 years |
| €1,000 / month | 16.4 years | 15.5 years | 14.7 years | 14.0 years |
| €1,500 / month | 12.2 years | 11.8 years | 11.2 years | 10.8 years |
Inflation
€1,000 in twenty years will have less purchasing power than €1,000 today. Dividend growth and inflation therefore belong in a long-term plan.
Conclusion
A higher monthly contribution can cut years off the journey. Time and consistency are at least as important as finding the perfect stock.
Disclaimer
All returns are assumptions, not guarantees.
Read Also
Sources and method
Our calculations use the formula described above. The model assumes a constant return and is not a forecast.