Dividend Reinvestment (DRIP) Calculator
Calculate the compound growth of dividend reinvestment over time.
See how DRIP turns dividends into additional shares and accelerates wealth building.
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DRIP Projection
Dividend Reinvestment Plans (DRIP) automatically use dividend payments to buy more shares, creating a compounding effect over time.
Basic dividend income:
Annual Dividends = Shares × Dividend per Share
With reinvestment (compound growth): Each quarter, dividends buy more shares, which then earn more dividends.
Future Value ≈ Investment × (1 + Yield%)^Years
This is simplified. The actual DRIP calculation reinvests dividends at each payment to buy fractional shares, and accounts for share price growth.
Why DRIP is powerful:
- Compounding: Each reinvested dividend earns future dividends
- Dollar-cost averaging: You buy shares at various prices over time
- No commissions: Most DRIPs have zero transaction fees
- Discipline: Automatic reinvestment removes emotion
Example: $10,000 invested at 4% yield with DRIP:
- After 10 years: ~$14,802 (vs $14,000 without reinvestment)
- After 20 years: ~$21,911 (vs $18,000 without reinvestment)
- After 30 years: ~$32,434 (vs $22,000 without reinvestment)