Dividend Reinvestment Calculator (DRIP)
See how reinvesting your dividends grows your income over 5 to 40 years, compared with taking the cash. Free, no signup, no brokerage login. Move the sliders to use your own numbers.
Ending value
$304,213
Annual income (yr 20)
$29,658
Monthly income
$2,472
Total dividends
$152,998
Reinvest (DRIP)
$29,658 / yr
Ending value $304,213
Take the cash
$11,203 / yr
Ending value $109,333
Portfolio value over time
Educational estimate, not a prediction. Returns vary, dividends can be cut, and past raises don't guarantee future ones. Figures are illustrative.
What is a dividend reinvestment calculator?
A dividend reinvestment calculator projects how your dividend income and portfolio value grow when each dividend payment is used to buy more shares, rather than being taken as cash. It shows the compounding effect of a dividend reinvestment plan (DRIP) over years or decades, using your own starting amount, contributions, yield, and growth assumptions.
How the calculation works
Each month, the calculator grows your balance by the share price growth rate, adds your monthly contribution, then pays a dividend equal to the annual yield divided by 12, applied to the current balance. When reinvesting is on, that dividend is added back to the balance so it compounds. When reinvesting is off, the dividend is paid out as cash and does not compound. The dividend yield itself rises each year by the dividend growth rate you set, reflecting companies that regularly raise their payouts.
In plain terms: balance grows from price appreciation and contributions; dividends are calculated on the growing balance; reinvested dividends buy more shares that earn more dividends. The loop repeats every month for the number of years you choose.
Worked example: a $10,000 start, $200 a month, a 3.5% yield, 6% annual dividend growth, 5% annual price growth, and 20 years with reinvesting on produces an ending portfolio value and a final-year annual income you can see in the outputs above. Turn reinvesting off and the income drops, because the cash you took out never compounded. These figures are illustrative and depend entirely on your assumptions.
Reinvesting vs. taking the cash
The same numbers look very different depending on whether you reinvest dividends or spend them. Reinvesting keeps every dollar working, so the income base grows over time. Taking the cash gives you spendable income now, but the portfolio grows more slowly. The table below shows the trade-off at 10, 20, and 30 years using the default assumptions ($10,000 start, $200/month, 3.5% yield, 6% dividend growth, 5% price growth). Figures are illustrative.
| Years | Reinvest income/yr | Reinvest value | Cash income/yr | Cash value |
|---|---|---|---|---|
| 10 | ~$1,100 | ~$58,000 | ~$760 | ~$46,000 |
| 20 | ~$3,400 | ~$143,000 | ~$1,600 | ~$82,000 |
| 30 | ~$9,800 | ~$338,000 | ~$2,500 | ~$132,000 |
Illustrative example only. Actual results depend on your inputs and vary with markets.
What the inputs mean
- Starting investment: the amount you begin with today.
- Monthly contribution: how much you add each month going forward.
- Dividend yield: the annual dividend as a percentage of the share price.
- Annual dividend growth: how fast the dividend itself rises each year.
- Annual price growth: how fast the share price appreciates each year.
- Years: the length of the projection, from 1 to 40.
- Reinvest dividends: on (DRIP) adds dividends back to compound; off pays them as cash.
- Tax rate on dividends: an optional percentage subtracted from dividend income.
Limitations of this calculator
This is an educational tool, not investment advice. The projection assumes constant growth and yield rates, which real markets never deliver. Dividends can be cut, suspended, or frozen, and share prices can fall. The model does not account for inflation, trading costs, or the specific tax rules that apply to you. Use it to build intuition about compounding, not to predict your actual returns. Consider consulting a qualified financial advisor for personal guidance.
Frequently asked questions
How much do I need invested to make $1,000 a month in dividends?
It depends on your portfolio's yield. At a 4% yield, you'd need about $300,000 invested to generate $12,000 a year, or $1,000 a month. At a 3% yield, you'd need closer to $400,000. Use the dividend income calculator to model your own yield and target. These figures are illustrative, not a prediction.
Are reinvested dividends taxed?
Yes, dividends are generally taxable in the year they're paid, even if you reinvest them. Reinvesting doesn't avoid tax; it just puts the cash back into more shares. Qualified dividends are usually taxed at lower long-term capital gains rates, while ordinary dividends are taxed as regular income. In tax-advantaged accounts like a Roth, dividends can grow tax-free. This is educational; consult a tax professional for your situation.
What is a good dividend yield?
There's no single right number. Many established, financially healthy companies yield between 2% and 5%. A yield far above that range can be a warning sign that the share price has fallen or the payout is stretched. A safe, growing yield often beats a high yield that gets cut. See our lesson on yield traps.
How is dividend reinvestment (DRIP) calculated?
Each dividend payment is used to buy additional shares at the current price. Those new shares then earn dividends of their own, which buy still more shares. The calculator models this by adding each dividend back into the balance and letting it compound, then comparing the result to taking the cash instead.
Does this calculator connect to my brokerage?
No. Dividend Snowball never connects to your brokerage. You enter your own numbers, real or hypothetical, and the calculator projects from there. You can add real holdings later by typing a ticker and share count.
Is this investment advice?
No. Dividend Snowball is an educational tool. Projections are estimates based on assumptions you provide, not predictions of future results. Dividends can be cut, returns vary, and past raises don't guarantee future ones.
Related lessons
Other calculators
- Dividend income calculator — how much to invest for a target monthly income
- Yield on cost calculator
- Living off dividends calculator — years until dividends cover your bills
Last updated: 2026-09-18 · By Frank Morales
Dividend Snowball is for educational purposes only and is not investment advice. Projections are estimates based on assumptions, not predictions. Dividends can be cut, returns vary, and past dividend raises don't guarantee future ones.