Methodology

01 / Starting shares and per-share dividends

The model starts at a notional $100 share price. Starting shares equal initial portfolio value divided by 100; starting annual dividend per share equals 100 × yield.

02 / Monthly contributions and reinvestment

Each month distributes one-twelfth of the current annual dividend per share. Taxes are applied immediately. With DRIP, the remaining dividend purchases fractional shares at that month’s distribution price.

03 / Price growth versus dividend growth

The price and annual dividend per share then grow by their separate monthly-compounded rates. The external contribution buys shares at month-end after that distribution.

04 / Tax drag and inflation

Next-year income is a forward run rate based on ending shares and ending annual dividend per share, net of the chosen dividend tax rate. Monthly income is an average, not a payment calendar.

05 / Income milestones and scenario limits

Real balance deflates portfolio value by cumulative inflation. Withdrawn dividends are tracked separately and are not included in ending portfolio value. Fees, capital-gains tax at sale, and dividend cuts beyond the chosen growth assumption are excluded.

Handling invalid and missing inputs

Unsupported or invalid inputs stop the calculation instead of producing a plausible-looking fallback. Missing borrow fees, missing returns, missing dates, and unavailable cutoffs are retained as missing or unavailable rather than replaced with zero. CSV imports are checked for required columns, duplicate records, date formats, and domain-specific consistency.

Sources