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New Lesson - DRIPDividend Reinvestment Plan
What is it?
Program that allows investors to buy more shares with the $ made from dividends Translation:
Your money makes you MORE money
How to do it?
Enroll through your brokerage accountThat’s it.
(thread)
DRIP Overview
Pros
-More shares over time
-Easy to do/set up
-Buy shares (usually) @ discounted price
Cons
-Can’t keep the cash
-Can’t use dividends to pay for stuff (bills, vacation, etc)
-Can’t diversify assets
Pros
-More shares over time
-Easy to do/set up
-Buy shares (usually) @ discounted price
Cons
-Can’t keep the cash
-Can’t use dividends to pay for stuff (bills, vacation, etc)
-Can’t diversify assets
My opinion?
DRIP is legit.
DRIP is legit.
Every time you get paid in dividends
You buy more shares of the company you own
And this will compound over time
Remember last week? (If not, better review)
This is the compound effect in action
Lets do an example..
You buy more shares of the company you own
And this will compound over time
Remember last week? (If not, better review)
This is the compound effect in action
Lets do an example..
Let’s say you buy 100 shares of XYZ @ $10/share = $1000
(Assume 5% annual yield)
1 year:
You get $50 in dividends
Now have 105 shares = $1050
5 years:
You get $63.81 in dividends
Now have 127.63 shares = $1276.28
Oh, it gets better..
(Assume 5% annual yield)
1 year:
You get $50 in dividends
Now have 105 shares = $1050
5 years:
You get $63.81 in dividends
Now have 127.63 shares = $1276.28
Oh, it gets better..
Let’s continue..
10 years:
You get $81.44 in dividends
Now have 162.89 shares = $1628.89
25 years:
You get $169.32 in dividends
Now have 338.64 shares = $3386.35
10 years:
You get $81.44 in dividends
Now have 162.89 shares = $1628.89
25 years:
You get $169.32 in dividends
Now have 338.64 shares = $3386.35
You want to know the best part?
You didn’t do ANYTHING to make more money
This is called
PASSIVE
INCOME
You didn’t do ANYTHING to make more money
This is called
PASSIVE
INCOME
Want to try it yourself?
DM us and we’ll send you a DRIP calculator
OR
The Dividend Investing Resource Center is another great place to start
See link below
http://dripinvesting.org/tools/tools.asp
DM us and we’ll send you a DRIP calculator
OR
The Dividend Investing Resource Center is another great place to start
See link below
http://dripinvesting.org/tools/tools.asp
Like this thread?
Lmk what you think
DM us or drop a comment below
You’re welcome.
Lmk what you think
DM us or drop a comment below
You’re welcome.
