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    Investing in DRIPs: Using Dividend Reinvestment Plans to Achieve Financial Freedom: The INCOME INVESTING FOR INDIVIDUALS Series
    Investing in DRIPs: Using Dividend Reinvestment Plans to Achieve Financial Freedom: The INCOME INVESTING FOR INDIVIDUALS Series
    Investing in DRIPs: Using Dividend Reinvestment Plans to Achieve Financial Freedom: The INCOME INVESTING FOR INDIVIDUALS Series
    Ebook62 pages1 hour

    Investing in DRIPs: Using Dividend Reinvestment Plans to Achieve Financial Freedom: The INCOME INVESTING FOR INDIVIDUALS Series

    By Alan Kerrman

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    About this ebook

    The Power of DRIPs: Compounding Power of Smart Dividend Investing


    Here's a book for individual investors, by an individual investor. I've made every mistake there is when it comes to money and investing but I didn’t give up. Along the way, I kept hearing about DRIPs (and DSPPs), and I thought that they were some outmoded investment models that went away after the discount brokers gave all of us retail investors a lot more trading choices and features. 

    NOPE. What I found instead was that DRIPs -- or dividend reinvestment plans -- solved three very serious problems for me! One is that my investing became completely automated. My regular checking account ACH withdrawals meant we'd always make regular monthly investments, and at prices that would dollar-cost-average over the course of the year. Along with the lower fees across the board, this type of income investment also helped me keep from overtrading, saving me all sorts of extra transaction fees. Plus the power of reinvested dividends means compounded growth that we can use for income later when we need it. 

    Join me as we explore how individual investors can still take advantage of the power of Investing in DRIPs to access the best blue chip companies -- here and around the world -- and get regular dividend payments from a personal portfolio of growth and income stocks. And the best part is that for me, it's part of an overall investment diversification plan that still includes my 401k, my Roth IRA, and a trading account for my stocks, options, and occasional commodity futures. DRIPs now equal compounded dividend income later!

    LanguageEnglish
    PublisherNotable Media
    Release dateSep 30, 2015
    ISBN9781513074306
    Investing in DRIPs: Using Dividend Reinvestment Plans to Achieve Financial Freedom: The INCOME INVESTING FOR INDIVIDUALS Series

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      Book preview

      Investing in DRIPs - Alan Kerrman

      Preface

      The Power of DRIPs: The Compounding Power of Smart Dividend Investing

      Here's a book for

      individual investors, by an individual investor. I've made every mistake there is when it comes to money and investing, but I didn't give up. Along the way, I kept hearing about DRIPs (and DSPPs), and I thought that they were some outmoded investment models that went away after the discount brokers gave all of us retail investors a lot more trading choices and features.

      NOPE. What I found instead was that DRIPs -- or dividend reinvestment plans -- solved three very serious problems for me! One is that my investing became completely automated. My regular checking account ACH withdrawals meant we'd always make regular monthly investments, and at prices that would dollar-cost-average over the course of the year. Along with the lower fees across the board, this type of income investment also helped me keep from overtrading, saving me all sorts of extra transaction fees. Plus the power of reinvested dividends means compounded growth that we can use for income later when we need it.

      Join me as we explore how individual investors in 2015-16 can still take advantage of the power of investing in DRIPs to access the best blue chip companies -- here and around the world -- and get regular dividend payments from a personal portfolio of growth and income stocks. And the best part is that for me, it's part of an overall investment diversification plan that still includes my 401k, my Roth IRA, and a trading account for my stocks, options, and occasional commodity futures. DRIPs now equal compounded dividend income later!

      Dividend Reinvestment Plans (DRIPs) are a system for individual investors to bypass a broker and buy stock directly from a public company in the market. These types of plans are perfect for long-term investors who want to accumulate holdings by making monthly or quarterly purchases of stock. However, with the advent of the discount brokerage account -- many with free dividend reinvestment services -- many investors consider DRIP plans a thing of the past.

      In 2015-16, DRIP Plans Still Make Sense

      Long-term investing in dividend-paying stocks is still considered a smart strategy for individual investors. But retail investors who purchase dividend stocks through their discount brokerage accounts incur transaction fees of an average of $7.99 to $12.99 per purchase. If you buy a dividend-paying stock, this transaction fee essentially wipes out the first few -- or several -- dividend payments. The other drawback of most brokerage accounts is that you must always make full share stock purchases (1-100+), rather than partial or fractional shares. Outside of a dividend reinvestment plan, you are not allowed to buy half a share of IBM, for example, recently trading at $146.

      On the other hand DRIP accounts -- after a modest initial set-up fee - often charge as little as $1 or $2 per stock purchase. Some DRIP plans are entirely free, where the underlying company pays all of the necessary fees. In addition to lower transaction costs, DRIP plans, and the related Direct Stock Purchase Plans (DSPPs), allow users to buy fractional shares with each transaction. For example, a monthly purchase of $50 in stock with a debit fee of one dollar would accumulate $49 of the underlying security. A DRIP purchase of

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