The Barefoot Investor (Classic Edition)

Our recommendation

The money book Australians keep coming back to.

The Barefoot Investor (Classic Edition)

$19.00 ★★★★★ 4.8 (8.2K reviews)
Check price on Amazon →

Investment & Crypto

Dividend Reinvestment Calculator

Project investment growth with and without dividend reinvestment (DRP) over time.

How this calculator works

Projects investment growth year by year. Capital growth increases the portfolio value. Dividends are calculated on the current value. With DRP on, dividends are added to the investment (compounding). With DRP off, dividends are paid as cash and only capital growth compounds. Additional annual investments are added each year.

$
%

Current dividend yield. ASX average is ~4%

%

Expected annual share price growth

years
$

Extra amount invested each year (on top of DRP)

Our pick

The Barefoot Investor (Classic Edition)

The Barefoot Investor (Classic Edition)

Understanding your numbers is step one. This is the book most Australians start with.

$19.00 ★★★★★ 4.8 (8.2K reviews)
Check price on Amazon →

We independently recommend products. We may earn a commission at no extra cost to you.

If you're looking to go deeper on this, the Monthly Budget Planner & Expense Tracker ($10.99, 5★ from 4 reviews) is worth a look. Affiliate link

FAQ

Frequently asked questions

What is the average dividend yield on the ASX?

The ASX 200 dividend yield averages around 4-4.5% including franking credits. High-yield stocks (banks, miners) can yield 5-7%+. REITs (A-REITs) yield 4-6%. Growth stocks may yield 1-2% or pay no dividends.

What are franking credits?

Franking credits (imputation credits) represent tax already paid by the company on its profits. A fully franked dividend of $70 carries $30 in franking credits (at 30% company tax rate), making the gross dividend $100. You declare $100 as income and claim $30 as a tax offset.

How much difference does DRP make?

Over 20 years, reinvesting a 4.5% dividend on $20,000 (with 5% capital growth and no additional investment) grows to approximately $93,000 with DRP vs $73,000 without. That is a 27% difference from compounding alone. The gap widens dramatically over longer periods.

Should I use DRP or buy shares myself?

DRP is automatic and usually free of brokerage. However, buying manually lets you choose timing and price, and you can invest in different stocks. Some DRP plans offer a small discount (1-5%) on the share price.

Monthly Budget Planner & Expense Tracker

Monthly Budget Planner & Expense Tracker

$10.99 ★★★★★ 5 (4)
Check price →