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Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

DRIP Example: 7% 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 7%
  • Annual stock appreciation assumes 7% (same as dividend increase rate)
Year Invested: Reinvested Dividends Total Cost Basis: Total Value:
1 $1,101.00 $11.07 $1,112.07 $1,150.42
2 $2,301.00 $53.67 $2,354.67 $2,520.01
3 $3,501.00 $130.82 $3,631.82 $4,021.32
4 $4,701.00 $245.85 $4,946.85 $5,667.01
5 $5,901.00 $402.40 $6,303.40 $7,470.98
6 $7,101.00 $604.47 $7,705.47 $9,448.44
7 $8,301.00 $856.44 $9,157.44 $11,616.09
8 $9,501.00 $1,163.10 $10,664.10 $13,992.21
9 $10,701.00 $1,529.71 $12,230.71 $16,596.85
10 $11,901.00 $1,962.04 $13,863.04 $19,451.99
11 $13,101.00 $2,466.41 $15,567.41 $22,581.72
12 $14,301.00 $3,049.74 $17,350.74 $26,012.46
13 $15,501.00 $3,719.64 $19,220.64 $29,773.14
14 $16,701.00 $4,484.43 $21,185.43 $33,895.51
15 $17,901.00 $5,353.23 $23,254.23 $38,414.34
16 $19,101.00 $6,336.04 $25,437.04 $43,367.77
17 $20,301.00 $7,443.84 $27,744.84 $48,797.59
18 $21,501.00 $8,688.64 $30,189.64 $54,749.62
19 $22,701.00 $10,083.61 $32,784.61 $61,274.09
20 $23,901.00 $11,643.21 $35,544.21 $68,426.05
  • 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