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Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

DRIP Example: 10% Annual Dividend Increase



The following example assumes the following:

  • Starting value of $1
  • $100 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 $1,101.00 $10.97 $1,111.97 $1,166.48
2 $2,301.00 $53.87 $2,354.87 $2,592.13
3 $3,501.00 $132.73 $3,633.73 $4,198.24
4 $4,701.00 $252.12 $4,953.12 $6,007.62
5 $5,901.00 $417.16 $6,318.16 $8,046.03
6 $7,101.00 $633.63 $7,734.63 $10,342.43
7 $8,301.00 $908.03 $9,209.03 $12,929.50
8 $9,501.00 $1,247.71 $10,748.71 $15,844.01
9 $10,701.00 $1,660.92 $12,361.92 $19,127.42
10 $11,901.00 $2,156.96 $14,057.96 $22,826.41
11 $13,101.00 $2,746.34 $15,847.34 $26,993.59
12 $14,301.00 $3,440.85 $17,741.85 $31,688.21
13 $15,501.00 $4,253.80 $19,754.80 $36,977.03
14 $16,701.00 $5,200.19 $21,901.19 $42,935.27
15 $17,901.00 $6,296.91 $24,197.91 $49,647.65
16 $19,101.00 $7,562.98 $26,663.98 $57,209.63
17 $20,301.00 $9,019.83 $29,320.83 $65,728.73
18 $21,501.00 $10,691.62 $32,192.62 $75,326.10
19 $22,701.00 $12,605.55 $35,306.55 $86,138.23
20 $23,901.00 $14,792.27 $38,693.27 $98,318.86
  • 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