Reasons to Reinvest your Dividends

At the end of every financial quarter, investors wait for their dividend checks. Whether you’re a large accredited investor who has an established, diverse portfolio or you’re just getting on your feet as a beginner investor, receiving dividends in the form of passive income can be an exciting prospect. While it’s incredibly tempting to use those dividends to splurge on trips, a new gadget or other discretionary expenditures, it’s a good idea to consider how reinvesting your dividends can supercharge your future returns and help your financial future.

How Dividend Reinvestment Programs (DRIPs) Work

Dividend reinvestment programs are designed to let investors obtain additional stock in a company you already own shares in without having to work with a broker. Instead, investors who utilize a dividend reinvestment program simply use their dividends to purchase more stock in the same company, allowing them to obtain more shares in the company at an expedited pace.

Instead of cashing out dividends and using them to purchase more funds, a dividend reinvestment program allows you to automatically roll your dividends back into the program, amassing more shares with less work from your end.

When liquidating funds, shares reinvested are on the same schedule as the principal amount the dividend was paid out of. For example: Say you invested $10,000 in 2017 and that grew through dividend reinvestment to be over $15,000 in 2021. The liquidation amount will be based off of the principal when first invested, per the redemption schedule: https://streitwise.com/redeem-funds

Choosing a dividend reinvestment program provides plenty of benefits. Streitwise’s Dividend Reinvestment Plan (also referred to as a DRIP) is available to all investors once their investment is finalized. Understanding the benefits of the Streitwise DRIP can help you make educated decisions about what to do with your dividends.

Dividend Reinvestment Programs are Flexible

As an investor, you know that having an increased amount of control over your investments is one of the most important things. Since every investor has his or her own investment strategy in mind, increasing the amount of control that you have over your own funds is incredibly important. Different sponsors have varying policies in place, allowing you to contribute as little as $10 or as much as $500,000.

At Streitwise, we take your full disbursement amount and purchase as many shares as possible. This could be a $25 dividend check or a $10,000 dividend check. This circumvents the normal $500 reinvestment minimum that applies to adding additional funds and gives you another way to quickly generate more equity in the REIT.

Benefit from Compound Interest

Hold cash flowing real estate long enough, and dividends reinvested can compound to produce handsome gains. To illustrate this point:

Year 2000: You invest $10,000 in a REIT with dividend reinvestment done quarterly.
Year 2020:
- At 6% annualized return: Your investment would be worth $34,925. A 249% total return.
- At 8% annualized return: Your investment would be worth $52,773, a 428% total return.
Note: This assumes zero growth in the REIT stock price and just reinvesting the dividend yield.

Our goal is to help our clients make the most out of their investments. Every program that we offer, including the Streitwise Dividend Reinvestment Plan, is designed to make sure that you are getting a positive return on your investment. DRIPs are especially effective for investors who are willing to treat their investments as a long-term proposition. As long as you don’t need to pull your dividends out every quarter, you can change the way that you approach those funds. When you have found a good stock that is providing quarterly dividends, using those dividends to obtain more shares is a great way to continue to increase your own net worth.

Adam Luehrs

Adam Luehrs is a writer during the day and a voracious reader at night. He focuses mostly on finance writing and has a passion for real estate, credit card deals, and investing.

SW Manager, LLC (“Manager”) is a wholly-owned subsidiary of and controlled by Tryperion Holdings, LLC (our “Sponsor”). Manager is the external manager and advisor of 1st Streit Office Inc. (“1st Streit Office”) and 1st Streit Office Operating Partnership LP (our “Operating Partnership” and, together with 1st Streit Office, “Our Current Offering”). 1st Streit Office is the sole general partner of our Operating Partnership, through which all of our assets will be owned and substantially all of our operations will be conducted. All references herein to “Streitwise” refer, as applicable, to Manager, 1st Streit Office, the Operating Partnership, or any of their affiliates (collectively, the “Streitwise Entities”). Unless explicitly stated to the contrary, all references to “we,” “us,” and/or “our” shall refer to the Streitwise Entities. By using Streitwise, you accept our Terms of Service and Privacy Policy.

An offering statement regarding this offering has been filed with the SEC. This offering is structured as a non-traded real estate investment trust, or “REIT,” under Regulation A+ of the JOBS Act. The SEC has qualified that offering statement which only means that Streitwise may make sales of the securities described by that offering statement. It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement. You should read the Offering Circular before making any investment which is available here: streitwise.com/oc

You may have been referred to Streitwise by a third-party (“Solicitor”). Compensation to any Solicitor may be up to $200 per email registration. A Solicitor may promote and/or may advertise Streitwise’s investment services and may offer independent analysis and reviews of Streitwise’s services. Streitwise and any Solicitor are not under common ownership or otherwise related entities. We cannot ensure the accuracy of the data provided from any Solicitor.

Performance: Past performance is not a guarantee of future results. All historical returns, target returns, or hypothetical projections may not reflect actual future performance.
Risk: This investment involves a certain level of risk and may result in partial or total loss. We cannot guarantee that we will reach our target return for our investors.
Tax: Prospective investors should confer with their tax advisors regarding the tax consequences based on their particular circumstances. Neither Streitwise nor any Solicitor assumes responsibility for the tax consequences for any investor.
Liquidity: Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term should not invest. See Stockholder Redemption Plan in the OC.

¹ Dividends & returns: Current annualized dividend based on the most recent dividend declaration as of the quarter ending 3/31/2024. Dividend return calculations based on NAV at the time of dividend return. 1Q24 dividend payout of $0.11/share equates to a 6.2% dividend based on the current NAV. The REIT has averaged a 7.2% annualized return since 2020 and a 8.3% annualized return since 2017 based on the average NAV for the respective periods. See Quarterly Report for all returns history.
² Source: FTSE NAREIT All Equity REITs vs S&P 500.
³Sponsor Performance: Related to investments by Sponsor, Tryperion Holdings, as part of one of its prior programs, and not of any of the Streitwise Entities. Reflects gross IRR on realized investments in the Sponsor’s investment portfolio since inception. Sponsor performance data as of 4Q23.
⁴Target returns: We will seek to invest in real properties and other real estate-related assets that we believe can produce a strong return through a combination of cash flow and appreciation. We cannot guarantee that we will reach this target return for our investors.

This page may contain forward-looking statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Offering Circular. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

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