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DRIP turns your dividends into more shares, which earn more dividends, which buy more shares. It is the simplest form of compounding in investing. On a $10,000 investment paying 4% yield with 5% annual dividend growth, DRIP produces a portfolio worth roughly $50,000+ after 30 years — without adding a single dollar of new money.
The dividend calculator shows this growth year by year. Enter your stock details and DRIP projection period to see exactly how your shares accumulate and your income grows.
Starting with 200 shares at $50/share ($10,000 invested), $2.00 annual dividend, 5% dividend growth:
| Year | DRIP: Total Shares | DRIP: Annual Income | Cash: Shares (Fixed) | Cash: Annual Income |
|---|---|---|---|---|
| Start | 200 | $400 | 200 | $400 |
| Year 5 | 224 | $541 | 200 | $487 |
| Year 10 | 261 | $810 | 200 | $621 |
| Year 15 | 317 | $1,247 | 200 | $792 |
| Year 20 | 400 | $1,959 | 200 | $1,010 |
| Year 25 | 525 | $3,135 | 200 | $1,288 |
| Year 30 | 713 | $5,094 | 200 | $1,642 |
After 30 years, DRIP has grown your 200 shares to 713 shares. Your annual income is $5,094 instead of $1,642. You own 3.5x more shares generating 3.1x more income — all from reinvesting dividends you would have otherwise spent or left in cash.
See your DRIP projection with your actual stock data.
Open DRIP Calculator →Every dividend payment buys fractional shares. On 200 shares paying $0.50/quarter ($100), at $50/share you get 2 additional shares per quarter. After year one, you have 208 shares. Those 8 extra shares earn their own dividends next quarter.
Companies that regularly increase dividends (Dividend Aristocrats increase annually for 25+ years) amplify the DRIP effect. If the dividend per share grows 5% per year, your 208 shares earn a bigger dividend in year two than your 200 shares did in year one. Both the share count AND the per-share dividend are increasing simultaneously.
The new shares you bought with dividends earn dividends. Those dividends buy more shares. Those shares earn dividends. It is a snowball. In years 1-5, the effect is small. By years 15-30, the snowball is massive. The hockey-stick curve in DRIP projections is not marketing — it is math.
DRIP reinvests dividends. Dollar cost averaging (DCA) adds new money regularly. Together, they create two compounding streams:
Example: You own $10,000 in SCHD (yielding 3.5%) with DRIP enabled, AND you invest $500/month in additional shares.
Use our DCA calculator to model the new-money side, and the dividend calculator for the DRIP side. Together, they give you the complete picture of how your dividend portfolio grows.
| ETF | Current Yield | Div Growth Rate | $10K After 10yr DRIP | $10K After 20yr DRIP | $10K After 30yr DRIP |
|---|---|---|---|---|---|
| SCHD | 3.5% | 10% | ~$14,800 | ~$27,000 | ~$55,000 |
| VYM | 3.0% | 6% | ~$13,600 | ~$22,500 | ~$40,000 |
| JEPI | 7.0% | 0% | ~$19,700 | ~$38,700 | ~$76,000 |
| VIG | 1.8% | 10% | ~$12,500 | ~$19,000 | ~$34,000 |
| O (Realty) | 5.5% | 3% | ~$17,100 | ~$33,000 | ~$67,000 |
Simplified projections assuming constant yield, no price change. Real results include price appreciation which significantly increases total returns. Run your specific scenario in the calculator.
Notice how JEPI's high yield produces impressive DRIP results despite 0% dividend growth, while SCHD's lower yield with 10% growth catches up over longer periods. This is the yield-vs-growth tradeoff in action. Our main dividend guide goes deeper on this comparison.
Most brokerages support fractional shares for DRIP, so even a $0.50 dividend gets fully reinvested. No minimum. No fees. No action needed after setup.
For the big picture on how compounding works beyond just dividends, see our compound interest guide. For using dividend income as part of a FIRE strategy, our FIRE calculator guide ties everything together.