The force of compounding dividends. Although it does indeed promise a huge leverage when talking longer terms, when is enough actually enough?
Along with a lot of other thoughts, I’ve come up with a draft reinvestment scheme that should bring a boost to my dividend income. In fact, there’s not too many variables other than a calculated average return on 1000 EUROs investment. No “artificial yields” or information taken from any third party website.
Calculating with a monthly input of 500 EUROs, the monthly return is presented in the chart below: (Actually, this chart comparison only represents the January values for each year of my age on the horizontal axis)
This way, I believe to have found a reasonably accurate calculating model to forecast the income at retirement. And hey, depending on the additional input: the actual age of retirement seems to be flexible!
With 750 additional monthly EUROs:
With 1000 additional EUROs:
With only three graphs (that still carry reasonable figures shifting from 500-1000 in additional monthly input) the benchmark for a 2000 EUROs in dividend returns shifts along quite nicely.
With a monthly input of 500 EUROs a monthly 2000 EUROs in dividends is met around age 61.
With a monthly input of 750 EUROs a monthly 2000 EUROs in dividends is met around age 55.
With a monthly input of 1000 EUROs a monthly 2000 EUROs in dividends is met around age 51.
At that that age (and having paid each and every penny in the monthly input) the portfolio net worth should be anywhere around 477k EUROs.
How are you guys doing the maths for the future?
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