How much capital do you need for €1,000 in monthly dividends?
The Strategic Newb Editorial Team
Updated:
Translated from the original; figures and sources have been preserved. Read the original →
The calculation
The monthly amount here is the annual total divided by twelve. It does not mean that every company pays every month. The required capital is calculated on a gross basis, before fees and taxes.
€1,000 per month = €12,000 per year.
Required capital = €12,000 ÷ dividend yield
| Dividend yield | Required capital |
|---|---|
| 2% | €600,000 |
| 3% | €400,000 |
| 4% | €300,000 |
| 5% | €240,000 |
| 6% | €200,000 |
| 7% | €171,429 |
| 8% | €150,000 |
What is realistic?
The percentages in this table are calculation assumptions, not return forecasts. Even a gross dividend yield of 3% to 5% is not guaranteed.
At 4%, you need approximately €300,000 to theoretically receive €12,000 in gross annual dividends.
Why not simply aim for 8%?
An extremely high yield can signal a sharp fall in the share price and possible future dividend cuts.
Gross versus net
Tax, withholding tax, exchange rates and your personal tax circumstances affect what you keep after tax.
Milestones at 4%
- €30,000 → €100 per month
- €75,000 → €250 per month
- €150,000 → €500 per month
- €225,000 → €750 per month
- €300,000 → €1,000 per month
Higher targets
- €2,000 per month at 4% → approximately €600,000
- €3,000 per month at 4% → approximately €900,000
- €5,000 per month at 4% → approximately €1,500,000
Conclusion
Approximately €300,000 at an average gross dividend yield of 4% theoretically produces €1,000 in monthly dividends.
Disclaimer
This article contains illustrative calculations and does not constitute personal financial advice.
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