Most people have never calculated this. Fill in your essential monthly costs and you'll see the portfolio size required to produce that income through dividends.
Dividend yield is the annual dividend a company pays expressed as a percentage of its share price. A company priced at £100 that pays £4 a year in dividends has a 4% yield.
Your portfolio's overall yield is the weighted average of every holding inside it. It is not a number you choose — it is a number that emerges from the kind of companies you decide to own.
Different parts of the market produce different yields. Some sectors and company types tend to pay more; others tend to pay less. Yields also shift as share prices move, so the same portfolio can have a different yield from one month to the next.
The good news: you do not have to calculate this manually. Simply Wall Street works out your portfolio yield automatically. Connect your brokerage or build a watchlist of your holdings, and it shows your live weighted dividend yield across the whole portfolio — updated as prices and payouts change.
If you have not built your portfolio yet, you can still use Simply Wall Street to research individual stocks and model what your yield would be at different weightings before you buy anything.
This calculator is for educational and illustrative purposes only. It is not financial advice, a personal recommendation, or an offer to buy or sell any investment. The figures it produces are projections based on the inputs you provide and assume a constant dividend yield — in reality, dividends can be reduced or suspended, share prices can fall, and the value of investments can go down as well as up. You may receive back less than you invest. If you are unsure whether an investment is right for you, speak to a qualified financial adviser.
A portfolio of this size, paying you a sustainable dividend yield, would produce enough income to cover your essential monthly costs — for the rest of your life, without you needing to sell a single share.
Getting there is simple. Not easy, but simple. Buy the right kinds of dividend-paying businesses, reinvest the income while you build, and let consistency and time do the rest. The hard part isn't the maths — it's knowing which direction to walk in.
