How to forecast future dividends on Interactive Brokers

I’ve already explained how you can see your dividends on Interactive Brokers in my complete guide dedicated to it.

But I had never thought about whether it was possible to see the future dividends of my investments…

Until Alberto, a loyal reader of the blog, wrote to me:

Hi Marc,

I just discovered this tab in Interactive Brokers where you can see the projection of dividend income, as well as interest on margin loans in the incoming months.

Have you heard of it? If not, then it might be worth mentioning on your blog.

Thank you, Alberto

So first of all, I would like to thank you, Alberto.

Because I have never heard of this feature on Interactive Brokers!

You learn something new every day :)

Section “Income projection(s)” in Interactive Brokers

You need to go to PortfolioAnalyst to find this section.

Then, you have to scroll to the bottom of the page.

That’s where you’ll find the “Income Projection(s)” widget by default.

I say “by default” because you can reorganise the widgets in this PortfolioAnalyst view however you like.

In screenshots, here’s what it looks like:

Select the PortfolioAnalyst section on Interactive Brokers

Then select 'projected income'

Here are all the details of your future income (and margin loan expenses) over the next 12 months

In the last screenshot, you can see the revenue and the expense projection over the next 12 months, point by point:

1. My ETF dividends
2. My Daubasses share dividends
3. Interest on my IBKR margin loan
4. Total of my future income

Example of MPs’ future dividends (we’ve exceeded 13kCHF per year!)

So, after discovering this feature thanks to Alberto, I quickly calculated the total dividend projection for our stock market investments.

Because, after all, I have a personal IBKR brokerage account (screenshots above) as well as a corporate Interactive Brokers account.

So that’s how much we’ll get in dividends over the next 12 months:

The sum of all dividends (personal account) for the MP family over the next 12 months

The sum of all dividends (personal account) for the MP family over the next 12 months

If we add up all of these future dividends over 12 months, the sum would be:

• CHF 8'490.57 (Personal IBKR brokerage account ETFs)
• CHF 1'210.76 (Personal IBKR brokerage account shares)
• CHF 3'977.33 (Corporate IBKR brokerage account ETFs)
• TOTAL: CHF 13'678.66

This was a bit of a surprise for me, as I hadn’t realised that we were receiving such a large sum in annual dividends with Mrs. MP!

Clarification on the role of dividends in my investment strategy

I’d like to make it clear that I don’t favour stocks or ETFs that pay a lot of dividends.

And I’m in no way recommending that you follow such a strategy with this article.

Because, as you know, when a company pays cash dividends to its shareholders, its equity is reduced by the total value of all the dividends paid out.

It’s simple math.

And most importantly, such a dividend-focused strategy costs you tax on the dividends received (as mentioned in detail in my Swiss tax guide for investors).

For my part, my ETF investment strategy is designed to support my standard of living when I’m FIRE.

In other words, once I’m financially independent, I’ll be relying on two types of income from the stock market:

• One part of the income will come from reselling ETFs (which increase in value over time)
• And the other part will come from dividends

There you have it: yes, it’s cool to see so many dividends being paid out every year (+13k CHF!!!), but it’s not a strategy in itself.

How about you, do you know of any other useful features like this on the Interactive Brokers trading platform?

Header photo credit: pexels.com

Steve moves abroad (UK) for early retirement FIRE …

Journal of my journey towards Financial...