After I posted It’s working! I got an email question and thought maybe I would re-post my answer here, incase anyone else had the same question.
I talked to a few people and not everyone knew about DRIPs. So I have a question, This stock that paid you a dividend rather than being automatically re-invested, is that a DRIP stock or something else, as I gathered from your article with the DRIPs the money is always automatically re-invested?
Also am I right in thinking that you can just purchase a few shares and fill out the application form to get the dividends, or do you have a minimum amount, say 500?
Dear handsome reader,
I was very frustrated that even when I talked to investment advisors, no one ever mentioned DRIP investing to me. It makes sense, as it is a fee-free way of investing and these people make their money off charging fees. It was only years later when I had wasted time and money that I found out about this way to maximize your investment dollars.
It’s too deep a subject to sum up in a blog post, so again I beg anyone interested in learning about DRIPs to please read “The Lazy Investor” by Derek Foster. It’s $20 which is about the cost of doing one stock purchase through an online broker now days. You can get it free from the library, or order it here.
To answer your question though, you can register for a company’s DRIP plan after you own a single share of that company. Then you send in money and buy more shares whenever you feel like it. Every 3 months your dividends get re-invested automatically.
Not all companies offer DRIPs. The shares that didn’t get re-invested in my previous post are from a stock that I own in a regular brokerage account. I like the company and am currently getting a 10% yield on the shares I bought, so it was too good to pass up.
Hope that answers some of your questions. You can do more research here: