Real DRIPs are Hard

March 18, 2019

After learning about what is a DRIP exactly you may be asking yourself, “Great, where do I sign up”. Sadly, real DRIPs can be a huge pain in the butt for three simple reasons.

  • Strike 1: It can take weeks to get your first share
  • Strike 2: It can take months to add additional funds to your account
  • Strike 3: Not all companies offer DRIPs

Real DRIPs are not all bad, and do have some amazing up-sides (once you get past the hard parts above) including

  • Benefit 1: Investing can sometimes be as little $10
  • Benefit 2: No brokerage fees, and possible discounts on purchase price
  • Benefit 3: Partial shares, so every ounce of dividend buys more shares

What is a DRIP?

February 11, 2019

In the investing world when you receive a dividend you have a few options for what to do with that money.

  • Spend it
  • Save it
  • Re-invest it

Unless you need the cash soon, then a very efficient thing to do is to re-invest it in more shares. But that costs money in trading fees and time as you have to setup the purchase.

In comes the concept of a DRIP. It’s a Dividend Reinvestment Plan where you as an investor can have your dividend payouts automatically be re-invested towards the purchase of additional stocks within that company.