dividend reinvestment plan

A dividend reinvestment plan (DRIP) allows shareholders to automatically use dividends received from a company to purchase additional shares of that company's stock, instead of taking the cash. This process helps investors grow their investment over time without needing to buy shares manually. DRIPs often offer the benefit of buying shares at a reduced price or without paying commission fees. By reinvesting dividends, investors can accumulate more shares, potentially increasing future dividend income and overall investment value, making it a useful strategy for long-term wealth building.