💹 Dividend Reinvestment Simulator
What Is Dividend Reinvestment (DRIP)?
A DRIP (Dividend Reinvestment Plan) is a strategy where, instead of taking dividend payments as cash, you automatically use them to purchase additional shares of the same stock or fund. Each new share generates its own dividends — creating a powerful compounding cycle that grows your position over time without requiring fresh capital.
🔄 The snowball effect: Dividends → Buy more shares → Larger dividends → Buy even more shares → ...
DRIP vs. Cash Payouts
Reinvestment (DRIP)
Best fit for the accumulation phase. Every dividend goes immediately back to work, compounding for decades. There's no cash flow during the holding period, but the final portfolio is significantly larger.
Cash Payouts
Best fit for retirees or income-focused investors who need regular cash flow. Dividends provide steady passive income, but long-term wealth accumulation falls short of DRIP.
Things You Must Know Before Investing for Dividends
Korean Dividend Tax: 15.4%
Korean dividends are subject to a 15.4% withholding tax (14% income tax + 1.4% local income tax). This calculator displays pre-tax figures, so the actual cash you receive is 15.4% lower.
High-Yield vs. Dividend Growth
High-yield stocks deliver larger payments today but often have limited share-price upside. Dividend growth stocks start with a lower yield but consistently raise their payouts year after year — historically the better long-term choice.
Dividend Sustainability
Always check the payout ratio (dividends ÷ net income). A payout ratio above 80–90% may signal that future dividend cuts are on the table. Verify before you invest.
* Pre-tax estimates. Korean dividend withholding tax (15.4%) and trading fees are not reflected.
Educational use only — not financial advice.
