Yield on cost (YOC) is an important metric for investors, especially those interested in dividend-paying stocks or real estate. It measures the return on an investment based on the initial cost rather than the current market value. This can be helpful in evaluating how your investment income has grown over time relative to your original outlay. Our Yield on Cost Calculator allows you to calculate this key figure with ease.

## How to Use the Yield on Cost Calculator

To calculate your yield on cost, follow these simple steps:

- Input the annual income you receive from your investment (e.g., dividends or rental income).
- Enter the initial amount you invested in the asset.
- If applicable, you can also add any additional investments you've made after the initial purchase.
- Enter the dividend growth rate to account for increases in income over time. This field helps track the effect of compounding on your yield.
- Click 'Calculate Yield on Cost' to see the results.

### Formula for Yield on Cost

The basic formula for calculating yield on cost is:

**Yield on Cost (%) = (Annual Income / Initial Investment) * 100**

This formula helps you determine the percentage return on your initial investment. For example, if you invested $10,000 and now receive $500 annually in dividends, your yield on cost is:

**(500 / 10,000) * 100 = 5%**

This is your yield based on the cost of the investment, not its current market value.

### Why Yield on Cost is Important

Yield on cost helps investors measure how much income they are generating based on their initial investment. Over time, especially with dividend growth, yield on cost can increase, providing better returns. It’s a key metric for long-term investors looking to maximize income growth without needing to sell the investment.

### Common Scenarios for Yield on Cost

This tool is particularly useful for investors in:

- Dividend-paying stocks
- Real estate properties generating rental income
- Income-focused mutual funds or ETFs

Use this calculator to assess whether your income from an investment is growing relative to your original investment and to plan for future cash flow needs.