Dividend & DRIP Calculator

Frequently asked questions

Everything you need to know about dividend reinvestment and compounding on TheDesperateTrader.

What is a DRIP (dividend reinvestment plan)?

A DRIP automatically uses each dividend payment to buy more shares instead of paying you cash. Those new shares then earn their own dividends, so your position compounds over time. This calculator shows the difference between reinvesting (DRIP) and taking the cash, which grows dramatically over long horizons.

How does the dividend calculator work?

You enter a starting investment, the dividend yield, how fast the dividend and share price grow each year, your time horizon, and any monthly contributions. It compounds all of that year by year and shows your projected portfolio value, the total dividends collected, your annual passive income at the end, and your yield on original cost.

What is yield on cost?

Yield on cost is your annual dividend income divided by what you originally paid, not the current price. Because a growing dividend keeps rising against a fixed original cost, yield on cost climbs over time. A stock bought at a 4% yield can pay a double-digit yield on cost decades later if the dividend keeps growing.

Are these results guaranteed?

No. It is an illustration that assumes your inputs hold every year. Real dividends can be cut or suspended, share prices fall, growth rates change, and taxes reduce returns in a taxable account. Treat it as a way to see how reinvestment and growth compound, not a promise.

How do I find strong dividend stocks?

Look for a sustainable payout ratio, a history of dividend growth, and a durable business. Our site tracks dividends, yields and ex-dividend dates across the market, and our free scanner and calculators help you size and time positions. No credit card required.