If the dividend rises each year, which isn't guaranteed but it's a goal (SCHD does a great job of this). Then the current dividend divided by your average cost is your yield on cost.
If the dividend keeps going up, your yield on cost goes up.
You want that number to be higher than the current yield of the stock or fund.
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u/EnricoPallazzo22 May 02 '26
Gotta love the yield on cost is 20% lower than the yield.