Automatically using dividends to buy more shares instead of taking cash.
DRIP turns dividends into compounding fuel: more shares earn more dividends which buy more shares. Over decades the gap versus pocketing dividends is enormous.
Example: $50,000 at 3% yield + 5% growth: reinvesting adds ~$180,000 more over 20 years than taking the cash.
FAQ
What is DRIP in simple terms?
DRIP turns dividends into compounding fuel: more shares earn more dividends which buy more shares. Over decades the gap versus pocketing dividends is enormous.