DRIP Investing: The Power of Dividend Reinvestment
Published Apr 13, 2026 · 6 min read
Dividend reinvestment plans (DRIPs) automatically use your dividend payments to buy more shares. This creates a compounding machine that grows faster than you'd expect.
DRIP vs. Pocketing Dividends
$10,000 invested in the S&P 500 in 1993 would be worth approximately:
| Without DRIP | With DRIP | |
|---|---|---|
| Value in 2023 | ~$80,000 | ~$170,000 |
| 30-year return | 800% | 1,700% |
Reinvesting dividends more than doubled the total return over 30 years.
How to Set Up DRIP
- Most brokerages (Fidelity, Schwab, Vanguard) offer free automatic DRIP
- Enable it in your account settings β takes 2 minutes
- Works with individual stocks and ETFs
Try it: Use our Dividend Calculator to project your DRIP growth over 10, 20, or 30 years.