Dividends & reinvestment
Compare cash dividends with reinvestment.
See examples and explanations ↓A nominal, pre-tax simulation. Taxes, fees, and inflation are excluded. Returns are not guaranteed.
Simulation results
Enter your assumptions, then select Calculate.
JSON
Up to 1 MiB (1,048,576 bytes) and 1–3 scenarios. Files stay in your browser. Current work is preserved until you confirm.
What this tool explores
Separate price changes from dividends to compare keeping payouts as cash with reinvesting them. This does not look up a security’s expected dividends or payment calendar.
Step by step
- Select Price appreciation + separate dividends. Enter only the assumed price change as annual return and the separate payout assumption as annual dividend yield.
- Turn reinvestment on or off and calculate. If your return assumption already includes dividends, use total-return mode to avoid counting them twice.
- Add another scenario with the same principal, payments and duration, then change only reinvestment to isolate that difference.
What to look for in these results
Read cash dividends separately from portfolio value. Cash receives no interest. The model applies constant price growth and dividend yield separately; it does not model ex-dividend price drops, dividend cuts, taxes or actual payout frequency.
Questions about this tool
Which balance determines the dividend?
After any start-of-month contribution, the opening portfolio value is multiplied by annual yield divided by 12. Price growth is applied, then the dividend is paid or reinvested, followed by any month-end contribution.
Does quarterly contribution frequency make dividends quarterly?
No. Contribution frequency controls when you add money. Separate dividends in this tool are always assumed to be paid monthly.
Calculation method
The annual return is an effective annual rate. Monthly return is (1 + annual return)^(1/12) − 1. Contributions occur at the beginning or end of each 1-, 3-, or 12-month period. Total-return mode already includes dividends, so no additional dividend is added.
Separate-dividend mode assumes a monthly payout of the opening value after any start-of-month contribution × annual yield ÷ 12. After price growth, the dividend is reinvested or held as non-interest-bearing cash, followed by any end-of-month contribution. This does not model real securities’ payout calendars. Values are rounded only for display.
Reading the results
Total gain is portfolio value plus cumulative cash dividends minus initial principal and subsequent contributions. Cash dividends are separate from portfolio value. The goal tool solves for the contribution per period under your assumptions; the target includes cumulative cash dividends.
Limitations and FAQ
Does this predict future returns?
No. This is a simulation with constant assumed returns and yields. It does not predict actual losses or volatility.
Are my inputs stored?
Inputs stay in this page’s memory and are lost when you leave. Download a JSON backup if needed. The operator cannot recover your file.
Calculation version: invest-1.0.0 · Source review date: 2026-10-05. Investor.gov (reference for compound-interest inputs; not a validation of ToffeeLab’s monthly dividend assumptions)