What Is A Drip (Dividend Reinvestment Plan)?

Automatically reinvest your dividends to buy more shares.

Secure Single

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James Bollen

Jan 20, 2023

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What Is A DRIP?

Drip stands for ‘dividend reinvestment plan.’ It is a program that an investor can automatically use stock or fund dividends to purchase more shares using the dividend-paying tool. Investors can reinvest their current dividends into a stock or fund instead of paying cash to buy additional shares.

Critical: Investors need to know that dividends invested using the DRIP plan will be taxable based on an investor’s income. They will be taxed the same way as dividends that you may receive in cash or check form. Qualified dividends are taxed based on an investor’s tax bracket: 0%, 10,% or 20%.

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A guest post by

James Bollen

James Bollen is the founder and president of Secure Single. He is an entrepreneur, Internet marketer, content creator, and author. He is a committed contrarian who encourages people to design their own guardrails.