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A real, self-directed dividend experiment · run on Fidelity

The Drip Fund

Every dividend reinvests. More shares, more dividends, more shares. Slow, steady, relentless compounding. Water wears down stone.

$23,964 Portfolio value
$1,254/yr Est. dividend income
12 Positions held
+19.2% 2025 return(self-managed)
~$100/mo Added monthly(when I remember)

Snapshot as of October 5, 2026 · prices as of this snapshot · live off

Why this exists

Turning a tiny seed into something real.

I started The Drip Fund with a small stake — somewhere around $5,000, honestly I don't remember the exact number — and I feed it maybe $100 a month when I remember to, for one reason: to find out, with real money in an account I can actually log into, whether the slow magic of dividend reinvestment truly works. Not in a spreadsheet. For real.

Let me be clear about one thing up front: this isn't my retirement plan, and it isn't my only investment. The serious, boring heavy-lifting happens elsewhere — a 401(k) and a Roth IRA, where it belongs. The Drip Fund is the sandbox: a small pot of real money I play with out in the open, on purpose, just to illustrate the point and show anyone who'll look how powerful this quiet little engine really is.

Here's the beautiful part. Every dividend these holdings pay never touches my pocket — it instantly buys more shares. Those shares pay their own dividends, which buy more shares again. It compounds quietly in the background while I sleep, while I work, while I forget it even exists. Water wearing down stone.

And this is the part that gets me: the dollars in here are modest, but the engine is the exact same one that builds serious wealth. If these were bigger numbers — or if I'd simply started at eighteen instead of in my fifties — that same machine, handed thirty or forty years, doesn't just supplement a retirement. It lets you walk away from work early and never look back. This little account is a proof of concept for a very big idea.

If you're young, this is the whole message: start now. Not “once I have money” — now, with whatever you've got, even ten dollars a week. Time is the single ingredient you can never buy more of, and it's the one that matters most here. A dollar invested at 18 does work a dollar invested at 50 simply cannot. The best day to plant this tree was years ago. The second best day is today. Go open the account.

One account, one job

A taxable brokerage account with one job: build a growing stream of passive dividend income to supplement retirement. Not the primary retirement vehicle (that's a 401k and Roth IRA) — this is the income supplement: money that shows up every month whether you work or not.

Where the money sits

Allocation by position · colored by tier

Who actually pays the bills

Estimated annual dividend income by position

The Core Five

The Core Three were three slices of one basket — all US, all large cap, all moving together. On Aug 20, 2026 SCHY and O were promoted to fix that: SCHY is the only holding that adds genuinely diversified non-US exposure, and O is the only non-equity asset class in the core. All five are dividend funds, and each one does something the other four don't.

⏳ Decided Aug 20, 2026. The September contribution ($300, bought Oct 5) went to JEPI under the older plan, so the SCHY-first queue starts with the next contribution.
SCHD
$4,513 · 18.83% / 20% target
US dividend growth — the value-tilted compounder, deliberately light on tech.
Slightly under — about $280 short
JEPQ
$3,050 · 12.73% / 12% target
Nasdaq-100 income — growth and tech exposure with option premium on top.
Slightly over target
JEPI
$3,103 · 12.95% / 12% target
S&P 500 income — low-volatility large caps plus option premium. The steady one.
Slightly over target
O
$718 · 3.0% / 6% target
Real estate income — monthly payer, 30+ years of increases, the only non-equity asset class here.
Queue #2 — about $720 short
SCHY
$675 · 2.82% / 10% target
International dividend — the fix for a portfolio that is otherwise ~97% US.
Queue #1 — about $1,720 short

Contribution rule: One target at a time: the entire contribution goes to the most underweight Core Five member until it hits its target weight, then the next in the queue. Minimum $200/mo, targeting $300-500. Fidelity allows dollar-based fractional purchases — type '$67' instead of a share count.

Why one at a time: Splitting a $250 contribution five ways is $50 a position. At that rate SCHY needs nearly three years to matter. Concentrating on one target at a time gets it there in about seven months, and the portfolio ends up in the same place either way.

Every position, on its own sheet

Twelve holdings, sorted into three tiers: Build (new money goes here), Hold (let it DRIP), and Monitor (watch, maybe trim).

Tier 1 — Build

— Monthly contributions go here 5 positions

All new monthly contributions go to these positions only. No new positions without strong justification.

SCHD
Schwab US Dividend Equity ETF
Dividend growth — the long-game compounder
Build
snapshot
Value$4,513
% of acct18.83%
Cost basis$4,434
Gain / loss +$80 (1.79%)
Income / yr$169
Yield~3.5%

Lower yield now but dividend and price grow consistently. The long-game compounder. Most tax-efficient holding in the account (qualified dividends). Still the largest position at ~18.8%, but the September rate shock knocked the price from $35.01 to $32.69 and nearly erased the gain (+1.8%). Nothing about the thesis changed; a cheaper SCHD just means cheaper DRIP shares.

JEPQ●
JPMorgan Nasdaq Equity Premium Income ETF
Income + growth
Build
snapshot
Value$3,050
% of acct12.73%
Cost basis$2,869
Gain / loss +$181 (6.3%)
Income / yr$297
Yield~9-11%

Same covered-call strategy as JEPI but Nasdaq / tech-heavy. Higher yield with more growth upside. Its SEC yield matches its distribution yield — the income is real. Tech held up through September while dividend stocks fell, so it is now slightly over its 12% target. Still the single biggest income producer in the account at ~$297/yr, roughly a quarter of everything the fund pays.

JEPI●
JPMorgan Equity Premium Income ETF
Income + stability
Build
snapshot
Value$3,103
% of acct12.95%
Cost basis$3,187
Gain / loss $-84 (-2.64%)
Income / yr$239
Yield~7-8%

S&P 500 covered-call ETF. Monthly dividends, quality management, sustainable yield, low volatility. It hovered within a percent of break-even for months, and the September rate shock pushed it to -2.9%, while it kept paying 7-8% in distributions the entire time, which is the whole point of the product. Took the September contribution: $300 on Oct 5, bought at the dip under the older plan that had JEPI next.

O●
Realty Income Corp
Monthly income + real estate
Build
snapshot
Value$718
% of acct3.0%
Cost basis$894
Gain / loss $-175 (-19.62%)
Income / yr$42
Yield~6%

'The Monthly Dividend Company.' 30+ years of dividend increases. Monthly payer. Promoted into the Core Five on Aug 20, 2026, which finally resolves a contradiction: O was tagged Tier 1 Build while the contribution rule said 'JEPI, JEPQ, SCHD only', so it sat in the top tier and never received a dollar. It is also the only non-equity asset class in the core. Then rates hit: with the 10-year Treasury above 5% for the first time in nearly 20 years, O fell to a 52-week low and is now -19.6%, the account's biggest loser. The dividend itself is untouched, so every DRIP share now buys about a 6% yield.

SCHY
Schwab International Dividend Equity ETF
International dividend
Build
snapshot
Value$675
% of acct2.82%
Cost basis$718
Gain / loss $-43 (-5.95%)
Income / yr$24
Yield~3.4%

International diversification — the global cousin of SCHD, and screened the same way: 10+ consecutive years of dividend payments plus quality and dividend-growth filters. Promoted into the Core Five on Aug 20, 2026 as the fix for a portfolio that was otherwise ~97% US by any diversified measure. It had been starved since March, which is why it is first in the funding queue. The September contribution went to JEPI under the older plan, so SCHY's turn starts with the next one. Expect lumpier payouts than SCHD — foreign companies often pay semi-annually and size the dividend to earnings rather than growing it smoothly.

Tier 2 — Hold

— DRIP, do not add 6 positions

Held and allowed to DRIP. Do not sell, do not add. Let compounding work.

BP
BP PLC ADR
Energy income (concentration risk)
Hold
snapshot
Value$4,082
% of acct17.03%
Cost basis$2,090
Gain / loss +$1,991 (95.27%)
Income / yr$172
Yield~4.2%

Yield around 4.2%. Held for income and energy exposure. Barely moved since August while most of the account fell, so its weight crept up to ~17.0% anyway. Still second to SCHD. Watch for dividend policy changes.

⚠ The second-largest position at ~17.0%, and it grew by holding still while everything around it dropped. Do not add. The unrealized gain is about +$1,991, so selling carries a real tax cost. BP cut its dividend in 2020.
AAPL
Apple Inc
Legacy growth winner
Hold
snapshot
Value$2,730
% of acct11.39%
Cost basis$414
Gain / loss +$2,316 (559.27%)
Income / yr$10
Yield~0.4%

Held for a huge unrealized gain (+$2,316, +559%). Worth more than six and a half times what it cost, on a cost basis of $414. Hold, do not add. Let DRIP work.

⚠ Tax impact of selling is significant given the +559% unrealized gain — consider capital gains before ever trimming.
MTB
M&T Bank
Regional bank
Hold
snapshot
Value$1,417
% of acct5.91%
Cost basis$613
Gain / loss +$805 (131.38%)
Income / yr$45
Yield~2.9%

Solid regional bank with a growing dividend. Up +131% on a $613 cost basis, down from +158% in August as rising rates hit bank stocks.

KO
Coca-Cola
Dividend aristocrat
Hold
snapshot
Value$991
% of acct4.14%
Cost basis$601
Gain / loss +$390 (64.88%)
Income / yr$29
Yield~2.8%

60+ year dividend grower. Never cuts. Boring perfection — a $1,000 position built on nothing but price growth and reinvested dividends.

WFC
Wells Fargo
Recovered bank
Hold
snapshot
Value$916
% of acct3.82%
Cost basis$316
Gain / loss +$600 (190.15%)
Income / yr$22
Yield~2.3%

Recovered well, dividend growing again. Up +190% on a $316 cost basis. The September dividend arrived and DRIP added its first new shares since June.

NLY
Annaly Capital Management
Mortgage REIT (watch)
Hold
snapshot
Value$521
% of acct2.17%
Cost basis$539
Gain / loss $-18 (-3.43%)
Income / yr$90
Yield~16%

Mortgage REIT, acceptable risk at the current small size, yields well. Punches far above its weight on income — 2.2% of the account producing about 7% of the dividends, which is precisely the pattern that deserves scrutiny rather than admiration.

⚠ Fell about 22% in six weeks: it went ex-dividend on Sept 30 just as Treasury yields jumped. The $0.75 quarterly dividend was maintained (payable Oct 30), which at $18.36 is a ~16% yield, past the 15% line in this account's own 'too good to be true' rule. The SEC-yield test is for funds; for a single stock like this, the equivalent check is whether Annaly's earnings available for distribution cover the dividend. Position is small (~$521). Watch rates quarterly.

Tier 3 — Monitor

— Watch quarterly, may trim 1 position

Watched quarterly. Off-strategy or concentrated positions that may be trimmed.

QQQH●
Neos Nasdaq 100 Hedged ETF
Hedged Nasdaq (off-strategy)
Monitor
snapshot
Value$1,243
% of acct5.19%
Cost basis$910
Gain / loss +$333 (36.61%)
Income / yr$115
Yield~9.5%

Not a dividend-income play and doesn't fit the strategy cleanly, but the gain has held between +34% and +37% for three straight check-ins and it keeps paying monthly.

⚠ Watch. Do not add. Considered for promotion to the Core Five on Aug 20, 2026 and rejected: QQQH is Nasdaq-100 plus option income, which is what JEPQ already does — promoting it would rebuild the exact redundancy the XYLD sale had just removed, one week later. It is also an options-income fund rather than a dividend-growth fund, which the core requires. Still the only genuinely off-strategy holding, and still undecided. Consider selling if the gain erodes below $200 or a better use of capital emerges.

Known risks, eyes open

No portfolio is perfect. These are the parts being watched on purpose.

BP concentration (second-largest)

BP is ~17.0% of the portfolio, up from 16.8% in August. Not from buying: it held its price while rising rates pulled the dividend stocks around it down. SCHD is still ahead at ~18.8%. Do not add. The unrealized gain is about +$1,991, so selling carries a real tax cost. BP cut its dividend in 2020.

Covered-call concentration (improved)

Down to JEPI and JEPQ — two covered-call products, about 24% of the account, from three products and ~28% before XYLD was sold. In a strong bull market, covered calls still cap upside. An accepted tradeoff for consistent monthly income, now taken in a smaller dose.

NLY interest-rate risk

Mortgage REITs are rate-sensitive and have historically cut dividends, and the September rate jump showed it: NLY fell about 22% in six weeks. It is 2.2% of the account but produces about 7% of the income, a ratio that argues for scrutiny, not comfort. The $0.75 quarterly dividend held, which now works out to a ~16% yield, past this account's own 15% warning line. The check that matters for a single stock is whether earnings available for distribution cover the dividend. Position is small (~$521).

For personal planning and entertainment only. This is one real person's real portfolio shown as a learning exercise — it is not financial advice and not a recommendation. Always consult a licensed financial advisor before making investment decisions.