How does compound interest work?

Compound interest is earning returns on your returns. With monthly compounding, interest is calculated on your principal plus accumulated interest each month. A $10,000 investment at 7% grows to $19,672 in 10 years, but $38,697 in 20 years.

What is the difference between SIP and lump sum investing?

SIP (Systematic Investment Plan) invests fixed amounts regularly, averaging your purchase price over time (dollar-cost averaging). Lump sum invests everything at once. Historically, lump sum outperforms 66% of the time, but SIP reduces timing risk.

What return should I expect from stocks?

The S&P 500 has returned about 10% annually since 1926 (7% after inflation). However, returns vary significantly year-to-year. Use conservative estimates (6-8%) for planning, and remember past performance does not guarantee future results.

How does dividend reinvestment (DRIP) boost returns?

DRIP automatically reinvests dividends to buy more shares, compounding your returns. Over 30 years, a dividend stock returning 3% yield plus 5% price appreciation can double vs. taking dividends as cash, due to compounding.

Should I invest or pay off debt first?

Compare your debt interest rate to expected investment returns. Pay off high-interest debt (10%+) first. For moderate rates (5-7%), consider doing both. Always contribute enough to get employer 401(k) match, and maintain an emergency fund.

Dividend Reinvestment Calculator (DRIP) 2025 - See How Dividends Compound

Dividend Reinvestment Lab

DRIP Snowball Calculator

Model dividend reinvestment vs cash payouts in a Bloomberg-terminal dark mode interface. See the compounding curve, the cost of waiting, and your projected passive income.

Initial Principal ($)

$50,000$0 - $500k

Annual Contribution ($)

$12,000$0 - $100k

Dividend Yield (%)

3.50%0% - 10%

Stock Appreciation (%)

7.00%0% - 15%

Time Horizon (Years)

30 yrs1 - 40

Tax Rate (%)

15.0%0% - 37%

Reinvest Dividends?

Cost of Waiting

$1,575,463

Difference between with-DRIP and without-DRIP portfolios at year 30.

Portfolio Snapshot

With DRIP: $3,168,952

Without DRIP: $1,593,489

Snowball compounding modeled annually.

Snowball Chart

Monthly Passive Income

Year 10

$854

After-tax dividends / month

Year 20

$2,779

After-tax dividends / month

Year 30

$7,856

After-tax dividends / month

Core Utilities

Daily Logic

Intelligence

Core Utilities

Daily Logic

Intelligence

DRIP Snowball Calculator