💰 Passive Income & Compound Dividends
Dividend Reinvestment (DRIP) Calculator
Model the exponential compounding power of automatically reinvesting dividend cash flows with annual dividend growth and periodic contributions.
Investment Portfolio Profile
Estimated Portfolio Value (Year 20)
$462,810
Total Invested
$145,000
Total Dividends
$168,240
Yield on Cost
15.48%
💡 Yield on Cost (YoC) Snowball:
Due to dividend reinvestment and 6.0% annual dividend hikes, your effective Yield on Cost reaches 15.48%, producing $1,870 / month in purely passive income.
The Mechanics of Dividend Snowballs
Dividend compounding creates a dual compounding effect: capital appreciation of underlying shares plus an accelerating count of shares purchased with cash payouts.
- Yield on Cost (YoC): Compares your current annual dividend income against the initial dollar amount you actually invested years prior.
- Dividend Aristocrats: Companies that have increased dividend distributions for 25+ consecutive years reliably outpace inflation over long-term holding periods.