What is DRIP?
Automatically reinvesting dividends to buy more shares
Full Explanation
A Dividend Reinvestment Plan automatically uses your dividend payments to buy more shares instead of sending you cash. Over decades, this compounding effect dramatically boosts returns.
Real-World Example
$10,000 in a dividend stock at 3% yield — DRIP vs. spending dividends makes a massive difference after 30 years.
Pro Tip
Most brokers offer automatic DRIP at no cost. Turn it on and forget it.
Related Strategies Terms
Dividend Growth Investing
Investing in companies that consistently grow their dividend every year
Dollar-Cost Averaging
Invest a fixed amount every month no matter what
Growth Investing
Buying companies growing fast even if expensive
Index Investing
Buying funds that track the whole market instead of picking stocks
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