The income potential of a $500,000 investment portfolio will depend on a number of factors, including the type of investments owned, their risk and the overall performance of the financial markets. Let's say for example we were comparing a $500,000 invested in a fixed annuity paying 3% versus a dividend stock portfolio that had an average dividend yield of 3.5%, the income could look like: An annuity with a fixed payout rate of 3% has the potential to generate a steady stream of income for a specific period of time, such as 10, 20, or 30 years. For example, a 500K annuity with a 3% fixed payout rate and a 20-year payout period would generate an annual income of around $15,000, or $300,000 in total over the course of the payout period. A dividend stock portfolio with an average yield of 3.5% has the potential to generate a similar level of income, depending on the size of the portfolio and the performance of the individual stocks.