Did you ever wonder how much money you could earn in the form of cash dividends if you were invested in the S&P 500 (Index: SPX)?
Josh Scandlen of Heritage Wealth Planning did, discovering he could use one of our signature tools, The S&P 500 at Your Fingertips, to extract the information he was after. He put together the following 14 minute YouTube video to explain both how dividends work for you as an investor and how to get cash dividend payout information from our tool:
After watching the video, we had two thoughts:
- That's an incredibly useful idea for investors, particularly those looking for dividend income after they retire.
- There's got to be a much easier way to get that dividend payout data.
Long time readers will already see where this discussion is heading! We've built a new tool, one that ties directly into the quarterly dividend data that Standard & Poor reports in spreadsheet form for its heralded S&P 500 index. In it, we put you in the shoes of someone who has either just bought into the index or has just flipped the switch to begin collecting cash dividends from it during the month ending a historic calendar quarter.
Based on the value of the investment at that point of time, it estimates the equivalent number of shares of the S&P 500 you own. It then calculates how much dividend income you would have collected at a later point of time, assuming you never sell any of the shares you own. It will also tell you how much your investment in the S&P 500 is worth at that later point of time you selected.
But that's not all! The tool also extracts how much you would have earned in dividends during the first calendar year of your investment, during the final calendar year, and also during any calendar year that might interest you in between. It will also identify the highest and lowest amount of dividends earned in any calendar year throughout your full period of interest.
If you're ready, here's the tool. If you're reading this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.
We've set the default data in the tool up to reflect the example Josh Scandlen worked in his video, but we've made all the quarterly dividend data we have for the S&:P 500 and its predecessor indices and component stocks going back to 1871. If you want to see that historic data, you can access it either through our The S&P 500 at Your Fingertips tool, which is updated monthly, or at our Quarterly Data for the S&P 500, Since 1871 resource, which we update annually.
Speaking of updates, we plan to update this tool in January 2023 after 2022's dividend data is available, then quarterly afterward.
Using the tool, we recommend selecting different periods and paying attention to when the lowest annual dividend payout data differs from the first year's data. The idea here is that you would want your investment to handle a worst case scenario when the market experiences a major downturn. While this will depend on what periods you might cover, we found that 1896 and 1933 represent major low points for a multi-decade investment holding period.
That said, we're celebrating our anniversary today, and what better way to do it than building on the capabilities of a tool we featured in one of our earlier anniversaries!
Celebrating Political Calculations' Anniversary
Our anniversary posts typically represent the biggest ideas and celebration of the original work we develop here each year. Here are our landmark posts from previous years:
- A Year's Worth of Tools (2005) - we celebrated our first anniversary by listing all the tools we created in our first year. There were just 48 back then. Today, there are over 300....
- The S&P 500 At Your Fingertips (2006) - the most popular tool we've ever created, allowing users to calculate the rate of return for investments in the S&P 500, both with and without the effects of inflation, and with and without the reinvestment of dividends, between any two months since January 1871.
- The Sun, In the Center (2007) - we identify the primary driver of stock prices and describe a whole new way to visualize where they're going (especially in periods of order!)
- Acceleration, Amplification and Shifting Time (2008) - we apply elements of chaos theory to describe and predict how stock prices will change, even in periods of disorder.
- The Trigger Point for Taxes (2009) - we work out both when, and by how much, U.S. politicians are likely to change the top U.S. income tax rate. Sadly, events in recent years have proven us right.
- The Zero Deficit Line (2010) - a whole new way to find out how much federal government spending Americans can really afford and how much Americans cannot really afford!
- Can Increasing the Minimum Wage Boost GDP? (2011) - using data for teens and young adults spanning 1994 and 2010, not only do we demonstrate that increasing the minimum wage fails to increase GDP, we demonstrate that it reduces employment and increases income inequality as well!
- The Discovery of the Unseen (2012) - we go where so-called experts on income inequality fear to tread and reveal that U.S. household income inequality has increased over time mostly because more Americans live alone!
We marked our 2013 anniversary in three parts, since we were telling a story too big to be told in a single blog post! Here they are:
- The Major Trends in U.S. Income Inequality Since 1947 (2013, Part 1) - we revisit the U.S. Census Bureau's income inequality data for American individuals, families and households to see what it really tells us.
- The Widows Peak (2013, Part 2) - we identify when the dramatic increase in the number of Americans living alone really occurred and identify which Americans found themselves in that situation.
- The Men Who Weren't There (2013, Part 3) - our final anniversary post installment explores the lasting impact of the men who died in the service of their country in World War 2 and the hole in society that they left behind, which was felt decades later as the dramatic increase in income inequality for U.S. families and households.
Resuming our list of anniversary posts....
- The Toolmaker's Tool (2014) - we make the code we use for creating online tools available to all!
- Replacing GDP with the National Dividend (2015) - we explore our development of an alternative measure of economic welfare that can replace GDP.
- The Gamblers Who Invented Modern Encryption (2016) - we discover that a group of gamblers seeking to break the law in Missouri back in 1905 put together many of the elements that underlie secure electronic communications and financial transactions in 2016!
- The Isolation of El Niño (2017) - in which we advanced the development of a global economic indicator for Earth!
- Telescoping Median Household Income Back in Time (2018) - we find a way to nearly double the available supply of monthly median household income estimates with reasonable accuracy.
- Cashing Out of the S&P 500 (2019) - we develop a tool to answer the question of whether you can survive being retired if you're counting on cashing out your investment in the S&P 500!
- The Deadly Intersection of Anti-Police Protests and COVID-19 (2020) - it was the year of the coronavirus and political protests, so we combined the two in a way that only we could.
- The Birth of the Martian Economy (2021) - we don't mess around when we say we celebrate big ideas, and what's bigger idea to celebrate than the birth of an entire planet's economy?
- The S&P 500 Dividend Engine (2022) - we put the entire history of the S&P 500's cash dividends at your fingertips!