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How much do you need to earn $1,000 a month in dividends?

#typescript #finance #opensource #showdev

Most dividend calculators go forward: "I have $X, what do I get?" The question people actually obsess over is the inverse: "I want $1,000 a month in dividends — how much do I need?" That's a one-line formula, and the answer is where a lot of bad decisions start.

I built a monthly dividend calculator around exactly that inverse, powered by the open-source library dividend-math.

The inverse, in one line

Capital needed = (target monthly income × 12) ÷ yield.

// Solve for the capital that throws off a target monthly income at a given yield
const capitalFor = (monthlyIncome: number, yieldPct: number) =>
  (monthlyIncome * 12) / (yieldPct / 100);

capitalFor(1000, 4);   // → 300,000
capitalFor(1000, 6);   // → 200,000
capitalFor(1000, 13);  // → ~92,308
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And going the other direction — the library's actual function — gives you the monthly income on a real position:

import { monthlyDividendIncome } from 'dividend-math';

monthlyDividendIncome({ investment: 300000, dividendYieldPct: 4 }); // → 1,000/month
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Pure function, plain-number inputs (4 for 4%), money in dollars. Same formula on both sides of the equals sign.

The trap in the formula

Look at the three outputs above. The capital you "need" drops fast as the yield rises — $300k → $200k → $92k. So the formula whispers the same thing to everyone: just chase a higher yield and you can retire on less.

That's the trap. The yield that lets you hit the number with less capital is the yield carrying the most risk — an unsustainable payout, a price that's been collapsing (yield = dividend ÷ price, remember), or an option-income fund eroding its own NAV (run a covered-call monthly payer through the QQQI dividend calculator and you'll see how variable that "monthly" number really is). The monthly dividend calculator on dividendpayoutcalculator.com deliberately shows the income and the payout ratio together, because a monthly number you can't trust is worse than a smaller one you can.

The honest version of the formula: pick a yield you'd actually trust for a decade (often 3–5% for growth payers), and accept the capital that requires. Bending the yield to fit a smaller bankroll is working backwards from the wrong variable.

Run it

Math post, not financial advice. "Monthly income" targets look tidy in a spreadsheet; real yields fluctuate and payouts get cut. Model scenarios, don't pick tickers.

What yield do you assume when you do this back-of-the-envelope — a conservative 3.5%, or do you let a high-yield fund do the heavy lifting? Curious where people actually land.

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