Dividend Reinvestment Calculator (DRIP)
Model a DRIP where dividends buy more shares, compounding your income.
Please note: For information only, not investment advice. Share prices can fall as well as rise and past performance does not predict future results.
What the Dividend Reinvestment Calculator (DRIP) does
A dividend reinvestment plan uses each payout to buy more shares, which then earn dividends themselves. Combined with a growing dividend, the compounding is powerful over long horizons — the gap against taking dividends as cash widens every year.
Formula
Each year: Income = Shares × Dividend per shareNew shares = (Income + Contribution) ÷ Share priceDividend per share and share price each grow at their own rate
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Starting shares | number | Yes | Accepts more than 0. |
| Current share price | selected currency | Yes | Accepts more than 0. |
| Annual dividend per share | selected currency | Yes | Accepts more than 0. |
| Annual dividend growth | % | Yes | — |
| Annual share price growth | % | Yes | — |
| Years | number | Yes | Accepts 1 or more, up to 60. |
| Additional annual investment | selected currency | Optional | Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Starting shares, Current share price, Annual dividend per share and Annual dividend growth and 2 more.
- Optionally add Additional annual investment.
- Select Calculate.
Worked example
1,000 shares at $50 paying $2.00, 6% dividend growth, 5% price growth, over 20 years.
- Shares
- 1000
- Price
- 50
- Dividend
- 2.00
- Div growth
- 6
- Price growth
- 5
- Years
- 20
Share count grows past 1,700 and the portfolio reaches roughly $225,000, well ahead of taking the cash.
Frequently asked questions
Is DRIP always better than taking cash?
For accumulation, usually yes. In retirement you may need the income. It also concentrates you further in one holding, which cuts against diversification.
Are reinvested dividends taxed?
In most jurisdictions yes — reinvesting does not defer the tax. Tax-sheltered accounts avoid this and get the full compounding benefit.