DRIP Calculator

Why reinvesting snowballs

A DRIP — a dividend reinvestment plan — turns each dividend check into more shares automatically, usually including fractional shares, so even a $9 dividend buys $9 of stock. Those new shares pay dividends too, so the next check is a little bigger, and the one after that bigger still. Most brokers switch it on with one setting.

The pull-ahead is slow, then sudden. Early on, reinvesting beats taking the cash by pocket change. Given 20 or 30 years, the reinvested stream can pull tens of thousands ahead, because the dividends are buying shares that pay their own dividends. The verdict above names the year your lines separate.

Reinvesting is not the same as dollar-cost averaging, and the two stack nicely: your monthly contribution buys shares on schedule, while the DRIP buys more with money the investment itself paid you. One is your paycheck working; the other is your portfolio working.

The tax catch surprises people: in a regular brokerage account, reinvested dividends are still taxable income the year they arrive, even though you never touched the cash. Inside a Roth IRA that bite disappears. And remember, this estimate skips price swings on purpose — real prices zigzag while the habit compounds.

Your numbers run in this browser only. Nothing is stored or sent anywhere.