Free DRIP Calculator - Dividend Reinvestment Calculator | Financial Calculator

Calculate the power of dividend reinvestment with our DRIP calculator. Enter initial investment, share price, dividends, growth rates, and see how your portfolio grows over time with compound returns.

What the DRIP model assumes

The simulator isolates the mechanics of dividend reinvestment: prices rise smoothly each month, dividends arrive once a year and are reinvested at the year-end price, and the per-share dividend grows annually. There are no taxes, trading fees, or market crashes in the model, so results show the pure compounding structure of a DRIP rather than a forecast of any real stock.

Worked example with hypothetical growth

Invest $10,000 at $50 per share (200 shares) paying a $2.50 annual dividend — a 5% starting yield — with 5% yearly dividend growth and 5% yearly price growth. After 10 years of reinvestment the portfolio is worth $25,937.42, having collected $7,968.71 in dividends, and the yield on cost stands at 11.79%. Every figure follows the month-by-month simulation described above; all rates are illustrative.

How to Use

  1. Initial Investment — Enter the lump sum you start with — divided by the share price, it sets your opening share count
  2. Current Share Price — Enter today's price per share; the simulation grows it monthly at your share-price growth rate
  3. Annual Dividend Per Share — Enter the dividend one share pays per year — paid out once per simulated year
  4. Growth Rates — Enter annual dividend growth and share price growth (%); both compound year over year
  5. Investment Period — Enter how many years to run the simulation
  6. Monthly Contribution — Optionally add a fixed monthly purchase, which buys shares at each month's current price
  7. Reinvest Dividends — Keep this on to buy more shares with every dividend, or turn it off to take dividends as cash
  8. Calculate — Click Calculate to see final portfolio value, total invested, total dividends, and yield on cost

FAQ

What is DRIP (Dividend Reinvestment Plan)?

DRIP is a strategy where you use received dividends to automatically buy more shares instead of taking them as cash. This creates compound growth as your share count increases and you earn dividends on dividends.

How does monthly contribution affect DRIP?

Monthly contributions accelerate compound growth by adding more capital to invest. Combined with dividend reinvestment, your portfolio can grow exponentially over time—especially in high-quality dividend growth stocks.

Is dividend reinvestment really important?

Yes, extremely. Over long periods, reinvesting dividends can contribute 30-50% of total returns. The earlier you start, the more dramatic the compounding effect. A 20-year DRIP strategy can turn modest investments into significant portfolios.

How does the simulation actually run?

Month by month, the share price grows at the compounded monthly equivalent of your annual rate and any contribution buys shares at that month's price. Once per year, dividends equal to shares × dividend-per-share are paid and, if reinvestment is on, immediately buy more shares; the dividend per share then grows by your growth rate.

What is yield on cost?

The final year's dividend income divided by everything you invested, as a percentage. In the worked example below it reaches 11.79% after 10 years — more than double the 5% starting yield — because dividend growth and reinvested shares both compound.

How much difference does reinvesting actually make?

With the example inputs, reinvesting ends at a $25,937 portfolio versus $16,289 of shares plus $6,289 of cash dividends ($22,578 combined) without it — roughly $3,360 more created purely by buying shares with each payout.