{
  "slug": "dividend-reinvestment",
  "title": "Dividend Reinvestment (DRIP) Calculator",
  "heading": "DRIP Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/dividend-reinvestment",
  "summary": "Compare reinvesting dividends against taking the cash.",
  "description": "Reinvestment is where most of the long-run total return of dividend stocks comes from. Over 20+ years, DRIP versus cash routinely doubles the ending balance.",
  "formula": "Balance = Principal × (1 + price growth + yield)^years, with dividends buying more shares.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=dividend-reinvestment",
  "inputs": [
    {
      "id": "principal",
      "label": "Starting investment",
      "kind": "number",
      "hint": null,
      "default": 25000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "contrib",
      "label": "Monthly contribution",
      "kind": "number",
      "hint": null,
      "default": 500,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "yield",
      "label": "Dividend yield",
      "kind": "number",
      "hint": null,
      "default": 3,
      "unit": "%",
      "min": 0,
      "max": 20
    },
    {
      "id": "priceGrowth",
      "label": "Annual price appreciation",
      "kind": "number",
      "hint": null,
      "default": 5,
      "unit": "%",
      "min": -10,
      "max": 25
    },
    {
      "id": "years",
      "label": "Years",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": null,
      "min": 1,
      "max": 50
    },
    {
      "id": "taxRate",
      "label": "Dividend tax rate (if taking cash)",
      "kind": "number",
      "hint": null,
      "default": 15,
      "unit": "%",
      "min": 0,
      "max": 50
    }
  ],
  "outputs": [
    {
      "id": "drip",
      "label": "Balance with reinvestment",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "cashTotal",
      "label": "Balance + cash taken instead",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "advantage",
      "label": "DRIP advantage",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cashPaid",
      "label": "After-tax dividends taken as cash",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cashBal",
      "label": "Portfolio value without reinvestment",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "contributed",
      "label": "Total contributed",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Starting investment: 25000 $",
      "Monthly contribution: 500 $",
      "Dividend yield: 3 %",
      "Annual price appreciation: 5 %",
      "Years: 20",
      "Dividend tax rate (if taking cash): 15 %"
    ],
    "outputs": [
      "Balance with reinvestment: $417,680.28",
      "Balance + cash taken instead: $338,782.59",
      "DRIP advantage: $78,897.69",
      "After-tax dividends taken as cash: $65,449.75",
      "Portfolio value without reinvestment: $273,332.84",
      "Total contributed: $145,000.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter starting investment ($).",
      "Enter monthly contribution ($).",
      "Enter dividend yield (%).",
      "Enter annual price appreciation (%).",
      "Enter years.",
      "Enter dividend tax rate (if taking cash) (%).",
      "Read your balance with reinvestment on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "principal": 15000,
        "contrib": 300,
        "yield": 1.7999999999999998,
        "priceGrowth": 3,
        "years": 12,
        "taxRate": 9
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "principal": 25000,
        "contrib": 500,
        "yield": 3,
        "priceGrowth": 5,
        "years": 20,
        "taxRate": 15
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "principal": 40000,
        "contrib": 800,
        "yield": 4.800000000000001,
        "priceGrowth": 8,
        "years": 32,
        "taxRate": 24
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the drip calculator work?",
      "a": "Reinvestment is where most of the long-run total return of dividend stocks comes from. Over 20+ years, DRIP versus cash routinely doubles the ending balance. The underlying maths is: Balance = Principal × (1 + price growth + yield)^years, with dividends buying more shares."
    },
    {
      "q": "What do I need to enter?",
      "a": "6 values: starting investment, monthly contribution, dividend yield, annual price appreciation, years, and dividend tax rate (if taking cash). Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the balance with reinvestment result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/dividend-income",
    "https://www.revenuelab.fyi/toolbox/stock-return"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Dividend Reinvestment (DRIP) Calculator (https://www.revenuelab.fyi/toolbox/dividend-reinvestment)"
}