20-Year DRIP Reinvestment Simulation: Risk Data vs. Consensus Assumptions
$1,500/month at 7% DRIP CAGR over 20 years = ~$782K; at 4%, ~$550K — a $232K gap driven entirely by the assumed return rateEvery 1% shift in assumed return adds or removes ~$110K–$130K in terminal value at year 20; sensitivity is nonlinearTax drag in taxable accounts reduces effective reinvestment yield by 15–25%; account type is a primary, not secondary, variable2020 S&P dividend cuts (~14% aggregate quarterly reduction) pushed realized DRIP rates 200bps below model assumptions for high-yield ETFsDRIP reinvestors during the Q1 2020 drawdown outperformed non-reinvestors by 12–18% by year-end — a volatility effect flat-line models ignore entirely What the 20-Year Simulation Data Actually Shows Monthly $30K investment 20-year compound growth simulation Running $1,500/month at 4%, 7%, and 10% for 20 years produces a divergence that widens sharply in the back half of the period....