Dividend reinvestment plans, otherwise known as “DRIPs”, are a way for income investors to build long-lasting wealth.

Offered by some dividend stocks, dividend reinvestment plans allow you to have your quarterly dividend payments allocated toward buying more shares (or fractions of shares) of that stock instead of being paid directly to you in the form of a check. Thus, the amount of shares you own in a given stock automatically expands every quarter when you enroll in a DRIP, so long as that company keeps paying a dividend.

You’d be amazed at how fast your money accumulates when you reinvest your dividends —especially when dividends and share prices increase over time. Consequently, DRIPs are tailor-made for the long-term investor.