New Lesson - DRIP

Dividend 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 account

That’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

My opinion?

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..

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..

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

You want to know the best part?

You didn’t do ANYTHING to make more money

This is called

PASSIVEINCOME

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 

Like this thread?

Lmk what you think

DM us or drop a comment below

You’re welcome.