■ Reinvestment · compounding · live data
DRIP Calculator
Model the dividend snowball: every payout buys more shares, every new share pays its own dividends. Compare with and without reinvestment on the same chart, in dollars.
| Year | Shares | Div / Share | Dividends | Cumulative | Invested | Portfolio | YOC |
|---|
Hypothetical projection with constant growth rates. Dividends shown net of the tax setting. Not a prediction.
Why reinvestment compounds so hard
Without DRIP, income grows only when the fund raises its payout. With DRIP, income grows on three axes at once:
- More shares: every payment buys additional shares.
- Higher payout per share: dividend growth raises what each share pays.
- Contributions: recurring buys accelerate both effects.
That triple compounding is why the two lines in the chart above diverge more every year. The longer the horizon, the more brutal the difference.
Popular DRIP projections
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DRIP FAQ
What is a DRIP calculator?
A DRIP (Dividend Reinvestment Plan) calculator projects what happens when every dividend payment is used to buy more shares instead of being taken as cash. Each new share produces its own dividends, so income compounds: the dividend snowball.
How much difference does DRIP actually make?
The gap grows with time, yield and growth rate. On a 10-year, 3.5% yield projection with typical growth, reinvesting can add 15 to 25% to the final portfolio value versus taking dividends as cash. The chart above shows the exact gap in dollars for your inputs.
Does DRIP buy fractional shares?
This calculator models fractional reinvestment, which is how most modern brokers and fund-sponsored DRIP programs work: the full dividend amount goes to work immediately.
Are reinvested dividends taxed?
In a taxable account, yes: dividends are taxed in the year received even if reinvested. Enable the tax toggle to model it. In IRAs and other tax-advantaged accounts, reinvestment compounds tax-free or tax-deferred.
DRIP or cash: which should I choose?
While accumulating, DRIP is usually superior because it automates compounding and removes timing decisions. Investors living off their portfolio typically switch to cash dividends instead of selling shares.