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Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

High Dollar DRIP Example: 12% 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 12%
  • Annual stock appreciation assumes 12% (same as dividend increase rate)
Year Invested: Reinvested
Dividends
Total
Cost Basis:
Total
Value:
1 $5,501.00 $54.42 $5,555.42 $5,880.91
2 $11,501.00 $269.80 $11,770.80 $13,197.60
3 $17,501.00 $669.77 $18,170.77 $21,588.63
4 $23,501.00 $1,281.43 $24,782.43 $31,211.75
5 $29,501.00 $2,135.88 $31,636.88 $42,247.87
6 $35,501.00 $3,268.75 $38,769.75 $54,904.46
7 $41,501.00 $4,720.93 $46,221.93 $69,419.47
8 $47,501.00 $6,539.31 $54,040.31 $86,065.77
9 $53,501.00 $8,777.66 $62,278.66 $105,156.31
10 $59,501.00 $11,497.64 $70,998.64 $127,049.99
11 $65,501.00 $14,769.96 $80,270.96 $152,158.40
12 $71,501.00 $18,675.75 $90,176.75 $180,953.57
13 $77,501.00 $23,308.00 $100,809.00 $213,976.84
14 $83,501.00 $28,773.38 $112,274.38 $251,849.04
15 $89,501.00 $35,194.24 $124,695.24 $295,282.17
16 $95,501.00 $42,710.86 $138,211.86 $345,092.74
17 $101,501.00 $51,484.14 $152,985.14 $402,217.19
18 $107,501.00 $61,698.61 $169,199.61 $467,729.44
19 $113,501.00 $73,565.87 $187,066.87 $542,861.09
20 $119,501.00 $87,328.61 $206,829.61 $629,024.62
  • 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