DRIP Calculator
See how dividend reinvestment compounds your shares year over year.
| Year | Start Balance | Start Shares | Share Price | Dividend / Share | Dividend Yield | Yield on Cost | Annual Dividend | Total Dividends | End Shares | End Balance |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $10,000 | 133.33 | $78.75 | $2.63 | 3.33% | 3.22% | $399.54 | $399.54 | 169.66 | $13,361 |
| 2 | $13,361 | 169.66 | $82.69 | $2.81 | 3.40% | 3.57% | $528.70 | $928.24 | 205.86 | $17,022 |
| 3 | $17,022 | 205.86 | $86.82 | $3.01 | 3.46% | 3.92% | $673.74 | $1,602 | 242.03 | $21,013 |
| 4 | $21,013 | 242.03 | $91.16 | $3.22 | 3.53% | 4.27% | $836.61 | $2,439 | 278.29 | $25,370 |
| 5 | $25,370 | 278.29 | $95.72 | $3.44 | 3.59% | 4.63% | $1,019 | $3,458 | 314.78 | $30,131 |
| 6 | $30,131 | 314.78 | $100.51 | $3.68 | 3.66% | 5.02% | $1,225 | $4,683 | 351.61 | $35,339 |
| 7 | $35,339 | 351.61 | $105.53 | $3.94 | 3.73% | 5.43% | $1,456 | $6,139 | 388.91 | $41,043 |
| 8 | $41,043 | 388.91 | $110.81 | $4.22 | 3.80% | 5.87% | $1,715 | $7,854 | 426.82 | $47,296 |
| 9 | $47,296 | 426.82 | $116.35 | $4.51 | 3.88% | 6.35% | $2,006 | $9,860 | 465.48 | $54,158 |
| 10 | $54,158 | 465.48 | $122.17 | $4.83 | 3.95% | 6.87% | $2,334 | $12,194 | 505.02 | $61,697 |
S&P 500 is included only as a total-portfolio-value reference — it isn't the most meaningful benchmark for income-focused strategies. The 10% baseline reflects the index's long-term nominal total return (price + dividends), a reference rather than a forecast.
What this calculator does
A DRIP calculator projects what happens when you turn off the cash spigot and let every dividend buy more shares of the same investment. Each year's dividend is divided by the average share price for that year and added to your share count, so next year's dividend lands on more shares. Over long horizons the effect compounds: yield on cost climbs even when the dividend yield itself stays flat, and total income outpaces a simpler model that pockets each payout.
How to use it
Start with the amount you've already invested and the current share price. Enter the starting dividend yield — the most recent annualized payout divided by today's price. If you expect the company to grow its dividend, set Annual dividend growth to a realistic rate; historical 5-year DGR is a fair starting point. Share price growth is independent of dividend growth and usually slower. Keep DRIP toggled on; toggle it off only to compare against taking dividends as cash.
Frequently asked questions
When does DRIP make more sense than taking cash dividends?
Almost always during accumulation. As long as the underlying investment still meets your criteria and you don't need the income to live on, reinvesting captures share-count compounding that's impossible to replicate later. Once you need the cash flow — typically in retirement — you flip DRIP off and let dividends fund living expenses without selling shares.
Does the calculator account for taxes on dividends?
No. This page projects pre-tax income. Dividends in a taxable account are taxed in the year paid even if you reinvest them, so real after-tax compounding is a bit slower. The Tax calculator (coming soon as a separate page) layers qualified vs. ordinary tax rates on top of these projections.
What share price should DRIP use to buy shares each year?
This model uses the average of beginning-of-year and end-of-year price for that year's reinvestment. Real brokerages reinvest on each ex-dividend date at that day's closing price. The two approaches converge closely over long horizons, but month-to-month results can differ for high-volatility holdings.
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