Harness the power of automatic dividend reinvestment to accelerate wealth building.
*Assumes 4% yield, 5% dividend growth, all dividends reinvested
DRIP (Dividend Reinvestment Plan) automatically uses your dividend payments to buy more shares of the same investment. Instead of receiving cash, you get fractional shares that compound over time.
Example: Starting with 100 shares of SCHD, after 10 years of DRIP you might own 150+ shares without investing another dollar—a 50% increase in share count purely from reinvested dividends.
| Strategy | Year 1 | Year 10 | Year 20 | Total Income |
|---|---|---|---|---|
| DRIP Enabled | $400 | $6,515 | $86,438 | $76,438 |
| Cash Dividends | $400 | $4,000 | $8,000 | $8,000 |
| DRIP Advantage | 0% | +63% | +980% | +855% |
*$10,000 initial, 4% yield, no additional contributions
Enable DRIP only for your core holdings while taking cash from others.
DRIP ON: SCHD, VYM, VIG (quality growers)
DRIP OFF: JEPI, JEPQ (take income for rebalancing)
Take dividends as cash but manually reinvest into underweight positions.
Combine automatic reinvestment with regular contributions.
Monthly Plan:
• DRIP reinvests ~$200 in dividends
• You add $500 fresh capital
• Total monthly investment: $700
• Result: Accelerated compounding
Use DRIP differently in taxable vs tax-advantaged accounts.
See how DRIP accelerates your wealth building:
| ETF | Yield | 5-Yr Growth | Why DRIP? |
|---|---|---|---|
| SCHD | 3.37% | 11.2% | Quality + growth |
| VIG | 1.85% | 8.5% | Consistent growers |
| DGRO | 2.28% | 9.8% | Balanced approach |
| NOBL | 2.15% | 7.2% | Aristocrat quality |
| VYM | 2.45% | 6.5% | Broad diversification |
Yes, in taxable accounts you owe taxes on dividends even if reinvested. Track your cost basis carefully.
Most brokers allow fractional share DRIP, ensuring every penny is reinvested.
Bear markets are ideal for DRIP—you're buying more shares at lower prices.
Contact your broker or check account settings. Most offer automatic enrollment.