One of the biggest draws of dividend investing is the idea of replacing part of your salary with investment income. For many investors, S$3,000 a month is a useful retirement target. Depending on your lifestyle, it could go a long way towards covering everyday expenses without relying entirely on employment income or CPF payouts. Whether that figure is enough differs from person to person. The more practical question is this: how much capital would it take to generate that income, and what kind of portfolio could keep paying year after year? The sums are relatively simple. Building a portfolio that can consistently deliver those dividends is the part that takes time.

The Mathematics Behind S$3,000 a Month

Every retirement income target starts with a simple calculation. If you want to receive S$3,000 a month in dividends, you’ll need to generate S$36,000 a year. The amount of capital required then depends on the average yield of your investments....