Dividend paid in security/stock, Dividend Reinvestment plan (DRIP)

[_Manuel]

@johnparker8

I buy $1000 of shares in a company

@johnparker8

then that company pays out $50 in a DRIP program

You can handle it as dividend + buy (as other users already mentioned) or as ‘Delivery (Inbound)’. The former one has the disadvantage for dividend investors who want to track real dividend cashflow and the latter one has the disadvantage it does not affect the performance. Most users choose to track the real performance I think.
You have to choose what you want to look at. But let’s say you want to handle it as dividend + buy for the real performance.

@johnparker8

I would effectively have $1050 of shares

@johnparker8

Then the value of those shares increases to $1200.

So the performance in total numbers is $200:
$50 dividend (“free” shares of reinvestment)
plus $150 (because of the increase from $1050 to $1200 afterwards)

@chirlu

$1200 minus $1000 originally invested

---

If you don’t want to handle it as dividend + reinvestment you can use Delivery (Inbound).

@johnparker8

They are only free in the sense that you didnt need to use any of your own money

Delivery does not need a deposit account. You just get the shares. But then you “lose” the performance of the dividend-like reinvestment and only a performance of $150 will be visible.