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Dividends - Why the push to reinvest?
Good question, here are some possible answers: Its a Good Idea There is probably some validity to the statictics and having money invested, generally speaking, has proven far more valuable than having it sit in a savings account. It tends to reinforce strength Suppose you own two stocks, one that is a great performer, and one that isn't.  Generally speaking the high performer will pay out more, and if you reinvest more into that stock, you will be wealthier if you contributed equally to both stocks. You might forget People tend to forget to do things that are not in the forefront, and reinvestment is one of those things that slip people's mind.  One of the wealth building tools that people universally recommend is automation.  Reinvesting is a way to automate one aspect of one's financial life.   You might spend it on something else If you put the dividends into your checking account, there is a non-zero chance that it might get put towards something else.  Better to have it out of sight and mind and invested. They make money Generally speaking, the more money you have in a brokerage account, the more the brokerage makes.   So it is good for them, as well as yourself. While there is some attraction to being able to see a balance that is the result of dividend investments, its just far better to have them be poured right back into whatever investment seem appropriate.