Project your long-term wealth by calculating the power of compounding dividends and monthly contributions.
Quarterly
Monthly
Annually
Ending Balance
$0.00
Annual Dividend Income
$0.00
Total Contributions
$0.00
Total Dividends Earned
$0.00
What is a DRIP (Dividend Reinvestment Plan)?
A Dividend Reinvestment Plan, or DRIP, is an investment strategy where the cash dividends paid by a company or fund are automatically used to purchase additional shares of that same company or fund. Instead of receiving a check or cash in your brokerage account, your wealth grows through the accumulation of more shares, which in turn produce their own dividends.
How the DRIP Calculation Works
This calculator uses a sophisticated compounding formula that accounts for three primary growth drivers:
Price Appreciation: The increase in the underlying value of your shares over time (Expected Annual Growth).
Cash Contributions: Regular monthly deposits that increase your principal base.
Dividend Yield: The percentage of the stock price paid out annually. When reinvested, this creates a "snowball effect."
Example: The Power of Reinvestment
Imagine you start with $10,000 in a stock with a 4% dividend yield and 5% annual growth. If you contribute $500 per month for 20 years:
Without Reinvestment: You receive the dividends as cash, but your share count stays lower.
With DRIP: Your dividends buy more shares. By Year 20, your annual dividend income could be over $15,000 per year, significantly higher than if you had taken the cash along the way.
Key Terminology
Dividend Yield: The ratio of a company's annual dividend compared to its share price. A 3% yield means you earn $3 for every $100 invested.
Compounding Frequency: How often dividends are paid. Most US stocks pay quarterly (4 times a year), while some REITs or ETFs pay monthly (12 times a year).
function calculateDRIP() {
var initial = parseFloat(document.getElementById('initialInvestment').value);
var monthly = parseFloat(document.getElementById('monthlyContribution').value);
var yieldPercent = parseFloat(document.getElementById('dividendYield').value) / 100;
var growthPercent = parseFloat(document.getElementById('annualGrowth').value) / 100;
var years = parseInt(document.getElementById('investmentYears').value);
var freq = parseInt(document.getElementById('frequency').value);
if (isNaN(initial) || isNaN(monthly) || isNaN(yieldPercent) || isNaN(growthPercent) || isNaN(years)) {
alert("Please enter valid numeric values.");
return;
}
var totalValue = initial;
var totalContributions = initial;
var totalDividends = 0;
// Monthly calculations for higher accuracy
var months = years * 12;
var monthlyGrowthRate = Math.pow(1 + growthPercent, 1/12) – 1;
var monthlyYieldRate = yieldPercent / 12;
for (var i = 1; i <= months; i++) {
// 1. Add monthly contribution
totalValue += monthly;
totalContributions += monthly;
// 2. Apply monthly stock price growth
var growthThisMonth = totalValue * monthlyGrowthRate;
totalValue += growthThisMonth;
// 3. Handle Dividend Payout/Reinvestment
// We calculate yield monthly, but in reality it compounds based on frequency.
// For the sake of a standard investment calculator, we apply yield per month.
var divThisMonth = totalValue * monthlyYieldRate;
totalDividends += divThisMonth;
totalValue += divThisMonth;
}
var finalAnnualIncome = totalValue * yieldPercent;
// Display Results
document.getElementById('dripResult').style.display = 'block';
document.getElementById('resTotalValue').innerText = formatCurrency(totalValue);
document.getElementById('resAnnualIncome').innerText = formatCurrency(finalAnnualIncome);
document.getElementById('resContributions').innerText = formatCurrency(totalContributions);
document.getElementById('resDividends').innerText = formatCurrency(totalDividends);
// Smooth scroll to results
document.getElementById('dripResult').scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}
function formatCurrency(num) {
return '$' + num.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
}