Building a $75K/Year Dividend Income Portfolio with VFV, XDIV, and XDG

"How big does my portfolio need to be to live off dividends alone?" is one of the most common questions in FIRE planning. Let's actually run the numbers using VFV, XDIV, and XDG as the building blocks, and aim for a concrete target: $75,000 a year.

Start With Blended Yield

The amount of portfolio you need is simple in principle: annual income needed ÷ blended yield = portfolio required. The catch is that your blended yield depends entirely on how you weight the three funds.

Scenario 1: The 50/25/25 Split

At roughly 0.85% (VFV), 3.1% (XDIV), and 2.8% (XDG), a 50/25/25 blend works out to about 1.9% blended yield. To generate $75,000/year at that yield:

$75,000 ÷ 1.9% ≈ $3.95 million

That's a growth-tilted portfolio — most of your money is quietly compounding in VFV rather than paying out cash, which is great for building wealth but means you need a bigger pile before the dividend income alone covers your spending.

Scenario 2: Tilting Toward Income

If the goal is specifically to hit $75,000/year on a $3 million portfolio, you'd need a blended yield of exactly 2.5% ($75,000 ÷ $3,000,000). Working backward, a mix around 20% VFV / 40% XDIV / 40% XDG gets you there:

(0.20 × 0.85%) + (0.40 × 3.1%) + (0.40 × 2.8%) ≈ 2.5% blended yield

Same $3 million, same $75,000/year target — but you get there with less capital by leaning harder into the two income funds instead of the growth fund.

The Trade-Off You're Actually Making

Tilting toward XDIV and XDG to reach a target income sooner, on a smaller portfolio, generally means giving up some of the long-run total return that a growth-heavy VFV allocation would have delivered instead. There's no version of this that's free — a higher current yield today is usually purchased with slower long-term compounding, and vice versa. Which trade-off is "right" depends entirely on how close you are to needing the income versus how many more years you have to let it grow.

A Practical Way to Use This

Most people don't pick one static split and hold it forever — they run something growth-heavy for the bulk of accumulation, then gradually shift the weighting toward XDIV and XDG as their target retirement date approaches, effectively "dialing up" the blended yield over time as the income need becomes real instead of hypothetical.

Related Calculators

Frequently Asked Questions