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Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

DRIP Example: 12% 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 12%
  • Annual stock appreciation assumes 12% (same as dividend increase rate)
Year Invested: Reinvested Dividends Total Cost Basis: Total Value:
1 $1,101.00 $10.90 $1,111.90 $1,177.10
2 $2,301.00 $54.00 $2,355.00 $2,640.57
3 $3,501.00 $134.02 $3,635.02 $4,318.93
4 $4,701.00 $256.39 $4,957.39 $6,243.73
5 $5,901.00 $427.31 $6,328.31 $8,451.16
6 $7,101.00 $653.93 $7,754.93 $10,982.71
7 $8,301.00 $944.41 $9,245.41 $13,885.98
8 $9,501.00 $1,308.14 $10,809.14 $17,215.55
9 $10,701.00 $1,755.87 $12,456.87 $21,034.01
10 $11,901.00 $2,299.93 $14,200.93 $25,413.15
11 $13,101.00 $2,954.48 $16,055.48 $30,435.29
12 $14,301.00 $3,735.72 $18,036.72 $36,194.85
13 $15,501.00 $4,662.28 $20,163.28 $42,800.12
14 $16,701.00 $5,755.47 $22,456.47 $50,375.26
15 $17,901.00 $7,039.78 $24,940.78 $59,062.68
16 $19,101.00 $8,543.27 $27,644.27 $69,025.71
17 $20,301.00 $10,298.10 $30,599.10 $80,451.65
18 $21,501.00 $12,341.20 $33,842.20 $93,555.31
19 $22,701.00 $14,714.89 $37,415.89 $108,583.02
20 $23,901.00 $17,467.71 $41,368.71 $125,817.31
  • 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