You just got paid $100. Do you spend it, or do you hire a new employee to work for you forever? That is exactly what happens when you turn on a DRIP (Dividend Reinvestment Plan). Instead of taking your dividend payouts as cash, you use them to buy more shares of the company. Those new shares pay their own dividends. It is a perpetual motion machine for your portfolio. But don't take my word for it—look at the math. Let’s say you invest $10,000 into a stock that pays a 4% dividend yield, and the stock price grows 3% per year. Here is the difference over 20 years: · Without Reinvesting (Taking the cash): You collect 18,000. Total value: ~$26,000. 💸 · With Reinvesting (DRIP turned ON): You buy more shares each quarter. Your investment grows to ~$34,500. That is $8,500 extra for doing absolutely nothing except flipping a switch. No stress, no timing the market, just compounding working its magic. The best time to start a DRIP was yesterday. The second best time is now. Turn the snowball on. Let them help you grow your portfolio Let me know if you use DRIP or just take the cash $HDIV$JEPQ$XDIV$ENB$XEI$BANK
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2 Comments
Gil @Simsaaaaa · 19d
Hey there, I'm a fan of reinvesting dividends but no so much on DRIP nowadays, since brokers dropped commission fees. The trouble with the DRIP is that it just blindly reinvests in the exact same positions that generated the dividend. I prefer to take the dividend in cash and manually reinvesting it where I see most fit (Undervalued? Portfolio balancing? Higher conviction? etc.).
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