Investment Income Calculator for Income and Required Investment Amount

What this calculator does

The Investment Income Calculator estimates how much income a portfolio can generate from a given yield and investment amount, or reverses the calculation to show how much capital you need to reach a target income. It uses a simple linear model designed for quick planning and clear comparisons — not for detailed growth projections.

The two calculation modes

Switch between the two tabs depending on what you want to find:

• Income mode: enter an investment amount and a yearly yield to see annual and monthly income.
• Investment amount mode: enter a target annual income and a yearly yield to see how much you need to invest.

Results always show both annual income and monthly income so you can plan by year or by month.

Worked example: income from amount

You invest €50,000 in a dividend portfolio with a 4% annual yield:

• Annual income: €50,000 × 0.04 = €2,000
• Monthly income: €2,000 ÷ 12 = €166.67

Doubling the yield to 8% on the same €50,000 would double the income to €4,000/year. Doubling the invested amount to €100,000 at 4% also gives €4,000/year. Both routes reach the same income.

Worked example: capital needed for a target income

You want €12,000/year (€1,000/month) in passive income at a 4% yield:

• Required investment: €12,000 ÷ 0.04 = €300,000

At a higher yield of 6%, the same €12,000/year target requires only €12,000 ÷ 0.06 = €200,000. The required capital drops by €100,000 — a 33% reduction — by finding a yield 2 percentage points higher. This shows how sensitive the capital requirement is to the yield assumption.

What yield represents

Yield is the annual income a portfolio produces expressed as a percentage of its value. For dividend stocks it is the dividend yield; for bonds it is the coupon rate relative to price; for savings accounts it is the annual interest rate. Yield does not include price appreciation or total return — only the income portion.

Realistic yield assumptions by asset type

• High-yield savings accounts: 3–5% depending on interest rate environment.
• Investment-grade bonds: 3–6% depending on maturity and credit quality.
• Dividend stock funds (e.g. global equity income ETFs): 2–4%.
• REITs (real estate investment trusts): 4–8%.
• High-yield bonds: 5–9%, with higher credit risk.

Using a yield that is too optimistic overstates the income and understates the required capital. A conservative estimate is safer for long-term planning.

Common pitfalls and important notes

• No compounding: this model does not project future portfolio growth — it shows income at a fixed point in time.
• Taxes not included: investment income is often taxable; your net income after tax will be lower.
• Fees reduce effective yield: fund management fees, platform costs and transaction charges reduce the yield you actually receive.
• Yields change: dividend rates and interest rates fluctuate; a yield valid today may not hold in future years.
• Principal not preserved by default: this calculator assumes the invested capital stays constant; it does not model drawdown strategies.

When to use this calculator

• Estimate dividend or interest income from a current portfolio.
• Plan how much capital to accumulate for a retirement income goal.
• Compare income outcomes across different yield scenarios.
• Check whether a loan or expense can be covered by investment income.

Supporting calculators

• Growth projection beyond linear income: use the Compound Interest Calculator to model how your capital could grow over time with compounding.
• Retirement income gap: use the Retirement Calculator to compare your target monthly income with the portfolio you are likely to have.
• Real-income check: use the Inflation Calculator to evaluate what your target income means in purchasing-power terms.