What's DRIP?

Dividend Reinvestment Plans (DRIP) are investing in securities that pay dividends and then reinvesting the dividend into the same security. This technique can produce a growing passive income stream over time.

"If you don't find a way to make money while you sleep, you will work until you die." ~ Warren Buffett

Using DRIP is a great way to introduce passive income into your investment strategy.

Dividend Picker

Identifying stocks that pay dividends is the first step. You can identify these stocks on a host of financial websites that provide data on stocks. One strategy is to look for a 'high' dividend yield. High is a relative term and there are other factors to consider like risk and growth. The average dividend yield for the S&P 500 is around 2%.

Picking stocks in the ~2% dividend yield range is probably a safe place to be, but if you are looking for higher yields they're out there. That said just blindly picking the highest dividend yield stocks isn't a good strategy. Some call this the dividend trap. That's where the Dividend Picker can help.

You can use the Dividend Picker to help you identify stocks that pay dividends within your desired dividend yield range. Once you identify some stocks with good dividend yields you can continue your research to see if they're a good fit for your investment strategy.

  • Are they stable?
  • Is the balance sheet healthy?
  • Is the stock price growing?
  • Is the dividend stable?
  • Is the dividend growing?

These are all questions you should ask yourself and research.

DRIP Calculator

Once you've identified some stocks that seem interesting to you can use the DRIP Calculator to see how your investment might grow over time.

You can swap different stocks and compare portfolios to see which one might be the best for you. You can download the table data as a CSV to use in your own analysis.

Conclusion

Using the Dividend Picker and DRIP calculator can help you identify stocks that pay dividends and see how your investment might grow over time. This can help you make informed decisions about your investments and help you build a diversified portfolio that can provide passive income for years to come.