What It Means: The Starting Principal is the initial amount of money you are investing. This could be a lump sum that you start with when you begin to invest in dividend-paying stocks.

How to Answer:

• Input the total amount you plan to invest initially.
• This does not include any additional contributions you might make later; it’s the base amount you begin with.

What It Means: The Annual Contribution refers to the amount of money you plan to add to your investment each year. Regular contributions can help grow your portfolio over time.

How to Answer:

• Enter how much you plan to contribute on an annual basis.
• This is great for investors looking to add to their investments regularly, allowing their portfolio to grow consistently.

What It Means: The Initial Dividend Yield is the percentage of your investment that you expect to receive as dividends during the first year. For example, if a stock pays $5 in dividends on a $100 investment, the dividend yield is 5%.

How to Answer:

• Enter the expected dividend yield of the stock or portfolio for the first year.
• A higher yield means a higher return in dividends, but consider the stability and sustainability of the dividends as well.

What It Means: This represents the percentage by which you expect your dividends to increase each year. Many companies aim to grow their dividends annually as their profits grow, providing investors with increasing income.

How to Answer:

• Estimate the annual growth rate of the dividends from the company or portfolio you're investing in.
• A higher growth rate suggests more future income, but it may also involve more risk.

What It Means: This is the anticipated percentage increase in the stock price each year. It estimates how much the value of your investment will grow, independent of the dividends paid.

How to Answer:

• Input the percentage you expect the stock price to appreciate each year.
• This can be a critical factor in overall return, but it's important to stay realistic with your estimates.