DRIP Calculator.
Model a simplified dividend reinvestment path and compare it with taking dividends as cash. Every input is visible and editable.
Dividend reinvestment model
Change assumptions to see how sensitive the result is to yield, growth, contributions, and time.
Scroll sideways to view all columns on smaller screens.
| Year | Start balance | Dividend yield | Dividends | End balance |
|---|
This model excludes tax, brokerage, slippage, dividend cuts, exchange-rate changes, and real market sequence risk.
Simplified DRIP logic
Year-end value = starting value × price growth + contribution + reinvested dividends
The model applies annual assumptions once per year. It does not model daily prices, partial trading lots, broker rules, taxes, or actual reinvestment plan terms.
Worked example using hypothetical numbers
Suppose a learner starts with 10,000, adds 1,200 per year, assumes a 4% dividend yield, 3% annual price appreciation, 2% dividend growth, and models 20 years.
- Initial amount
- 10,000
- Annual contribution
- 1,200
- Starting dividend yield
- 4%
- Mode
- Reinvest dividends
Worked result: The calculator compounds the entered assumptions year by year and shows the difference between reinvesting dividends and taking them as cash.
The example is not a prediction. Real dividend reinvestment outcomes depend on price changes, dividend changes, fees, taxes, plan rules, and investor eligibility.
How to interpret DRIP calculator results
What this tool calculates
This tool compares a simplified reinvestment scenario with a cash-dividend scenario using user-entered assumptions for starting amount, contribution, yield, price growth, dividend growth, and years.
How to use it step by step
- Enter a starting amount and optional annual contribution.
- Enter a dividend yield assumption and any growth assumptions you want to test.
- Choose whether dividends are reinvested or taken as cash.
- Review the year-by-year table and compare how sensitive the result is to each assumption.
What the result means
The result shows what the simplified math produces under the exact assumptions on the page. It is useful for learning how reinvestment changes a scenario.
What the result does not mean
It does not forecast a real security, guarantee compounding, account for dividend cuts, model taxes, or confirm that a DRIP is available for any company or market.
Common mistakes
- Treating constant growth assumptions as a forecast.
- Ignoring dividend cuts, suspensions, or irregular payments.
- Comparing a tax-free scenario with a taxable real-world account.
- Assuming every dividend plan reinvests at the same price or with no restrictions.
Not financial advice: These tools are educational scenario helpers. They do not recommend securities, provide personalized financial guidance, or replace professional advice.
DRIP calculator FAQ
What is a DRIP calculator?
A DRIP calculator models a simplified dividend reinvestment scenario where cash dividends are reinvested instead of taken as income.
Does this predict future returns?
No. It uses user-entered assumptions for yield, price growth, dividend growth, and time. It is a learning model, not a forecast.
Why does reinvestment change the result?
Reinvestment can increase the number of shares or units held, which may increase future dividends if distributions continue. The effect depends on assumptions and market outcomes.