Dividend Reinvestment and Growth Spreadsheet
The DCA spreadsheet is based off the template available here: The DRiP Investing Resource Center – Tools
Dividend Reinvestment and Growth Calculator
This template gives you the ability to project anticipated value of a stock over a 30 year period if dividends are reinvested and allows for factoring in additional monthly, quarterly, or annual contributions. Great for tracking scenarios where dollar cost averaging would be advisable, such as with frequent contributions to an Individual Retirement Account (IRA) or a dividend reinvestment plan (DRIP).
These spreadsheets allow you calculate how various factors such as ongoing contributions, stock appreciation, dividend yield, and dividend growth can affect cumulative value over a 30-year period. For example, I used $4,000 as the initial investment amount, contributed $50 per month, expected 3% annual stock price appreciation, an initial 2.75% dividend yield, and an expected annual dividend increase of 7%. All dividends were reinvested and no commission fees were assessed. At the end of 20-years, I would have invested a total of $15,950 and reinvested $16,253 in dividends giving a total cost basis of $32,203. Capital gain would be $10,785 and the total account value would have risen to $42,987. It would also be generating $2,269 a year in dividends.
In 30 years, assuming the same parameters hold true, the portfolio would have had cumulative contributions of $21,950 and the total value of the portfolio would be $125,376.55, giving an annual dividend of $9,585. That’s all from just under $22,000 invested over a 30-year period. Just imagine what would happen if you invest more initially and increase the monthly ongoing investment! That’s the magic of compounding!
For a live version that you can experiment with please see Crazy Visa Statistics.