Dividend Calculator: How Much Passive Income Can You Generate?
March 8, 2026
3 min read
Dividends are the portion of profits that companies distribute to shareholders. For long-term investors, they are one of the most powerful sources of return — especially when reinvested. Calculate how dividends build your wealth and passive income over time.
Dividend Calculator
Invested Capital
CHF 50'000
Monthly Savings
CHF 500
Expected Total Return
7%
Total return includes price gains + dividends combined. The S&P 500 has historically delivered ~10% p.a. (incl. dividends). Conservative approach: 6-8%. The dividend yield below determines what portion of total return is paid out as dividends.
Historical S&P 500: ~10%. Conservative: 6-8%. arvy target: 7-10%.
Dividend Yield (of which)
2.5%
The dividend yield is the portion of total return paid out as cash dividends. With 7% total return and 2.5% dividend yield, 4.5% comes from price growth and 2.5% from dividends. The arvy portfolio has a dividend yield of ~2-2.5%. Swiss Blue Chips: ~3%. High-dividend ETFs: 4-5%.
Part of total return. arvy: ~2-2.5%. Blue Chips: ~3%. High-dividend: 4-5%.
Annual Dividend Growth
5%
Quality companies increase their dividend every year. Nestlé has raised its dividend for 25+ consecutive years. Microsoft: ~10%/year dividend growth. Growth does not change your total return — it only shifts the proportion from price gains to dividends over time. Your Yield on Cost increases.
More in the Glossary: Dividend, Yield on Cost →
More in the Glossary: Dividend, Yield on Cost →
Shifts return from price gains to dividends over time. Increases Yield on Cost.
Total return composition:
2.5% Dividend + 4.5% Price growth = 7% Total Return
7%
Investment Horizon
20 years
Reinvest Dividends (DRIP)
DRIP = Dividend Reinvestment Plan. Instead of paying out dividends, they are automatically reinvested. This maximises the compound effect. If you need passive income, turn DRIP off — you will see how much cash you receive annually.
Dividend in Year 20
CHF 0
= CHF 0/month
Total Wealth
CHF 0
Deposited: CHF 0
Yield on Cost
0%
Dividend ÷ Original cost
Total Dividends Received
CHF 0
Over the entire period
Simple calculation — how dividends work
Wealth CHF 260'000
×
Dividend yield 2.5%
=
CHF 6'500/year
→
CHF 542/month
This is the base dividend on your wealth. Through dividend growth, this amount increases every year.
Dividends from quality companies. The arvy portfolio contains companies like Nestlé, Visa, Microsoft and Ferrari — with stable or growing dividends. → View portfolio
How this calculator works
The calculator uses total return as its basis — the combination of price gains and dividends. If you set 7% total return and 2.5% dividend yield, your wealth grows by 7% per year, of which 2.5% is paid out as dividends. This is more realistic than adding price growth and dividends separately.
Dividend growth shifts the proportion over time: companies that increase their dividend by 5% each year pay more than double per share after 15 years. Your Yield on Cost — the dividend relative to your original purchase price — increases as a result. This does not change total return, only how much arrives as cash dividends.
Why Dividend Growth Matters More Than Dividend Yield
Many investors chase high dividend yields. But a stock with 2% yield and 8% annual dividend growth beats a stock with 5% yield and 0% growth long-term. The reason: after 15 years, the growing stock pays more dividends — and likely has a higher share price too. Quality companies in the arvy portfolio offer exactly this combination: moderate starting yield with strong growth.
What Is "Yield on Cost"?
Yield on Cost measures the current dividend relative to your original purchase price — not the current market price. If you bought a stock for CHF 100 and it now pays CHF 4 in dividends, your Yield on Cost is 4%. If the dividend grows to CHF 8 over the years, your Yield on Cost is 8% — even though the current dividend yield based on market value may only be 2%. That is the magic of holding quality companies long-term.
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Build Passive Income with Quality Stocks
Invest in companies with stable, growing dividends. From CHF 1/month.
Set up a savings planIllustration. Not investment or tax advice. Total return is based on assumptions — historical returns are no guarantee of future results. Imprint
