Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

High Dollar DRIP Example: 10% Annual Dividend Increase



The following example assumes the following:

  • Starting value of $1
  • $500 contribution each month
  • Starting dividend yield of 2.5%
  • Annual increase in dividend of 10%
  • Annual stock appreciation assumes 10% (same as dividend increase rate)
Year Invested: Reinvested
Dividends
Total
Cost Basis:
Total
Value:
1 $5,501.00 $54.75 $5,555.75 $5,827.90
2 $11,501.00 $269.12 $11,770.12 $12,955.60
3 $17,501.00 $663.32 $18,164.32 $20,985.46
4 $23,501.00 $1,260.12 $24,761.12 $30,031.67
5 $29,501.00 $2,085.14 $31,586.14 $40,222.87
6 $35,501.00 $3,167.30 $38,668.30 $51,703.99
7 $41,501.00 $4,539.11 $46,040.11 $64,638.28
8 $47,501.00 $6,237.26 $53,738.26 $79,209.68
9 $53,501.00 $8,303.04 $61,804.04 $95,625.40
10 $59,501.00 $10,782.99 $70,283.99 $114,118.87
11 $65,501.00 $13,729.52 $79,230.52 $134,953.09
12 $71,501.00 $17,201.70 $88,702.70 $158,424.32
13 $77,501.00 $21,266.05 $98,767.05 $184,866.33
14 $83,501.00 $25,997.53 $109,498.53 $214,655.14
15 $89,501.00 $31,480.58 $120,981.58 $248,214.36
16 $95,501.00 $37,810.32 $133,311.32 $286,021.20
17 $101,501.00 $45,093.91 $146,594.91 $328,613.30
18 $107,501.00 $53,452.10 $160,953.10 $376,596.34
19 $113,501.00 $63,020.90 $176,521.90 $430,652.64
20 $119,501.00 $73,953.52 $193,454.52 $491,550.92
  • What Are DRIPs?

    DRIPs refer to Dividend ReInvestment Plans where investors often buy stocks directly from the company for little to no fees and reinvest dividends automatically. DRIPs can be a very effective and low-cost way to build positions in dividend stocks over time.
  • Are DRIPs For You?

    Dividend Reinvestment Plans are great for the following reasons:

    1. Easy, automatic investing

    2. Automatic reinvesting of dividends

    3. Low fees

    4. Easy way to get used to investing in individual stocks