| When I was a teenager and believed that I knew everything about everything, during the 1970's (and yes, I am one of few remaining original hippies who never quite made the leap to adulthood and normal behavior), we referred to our out-of-touch parents as drips. They were plain and simple - drips…as in boring and not really with it.
As I now look back, thankfully more enlightened, a wonderful quotation by Mark Twain is a great response to any know-it-all teenagers, of any era.
"When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much he had learned in seven years."
-- Mark Twain |
Be that as it may, let's take a look at those DRiPs. This acronym is short for "dividend-reinvestment plans." BUYandHOLD's glossary has a comprehensive definition of a DRiP. It says that a Dividend Reinvestment Plan is "an investment plan offered by some corporations enabling shareholders to automatically reinvest cash dividends and capital gains distributions. This makes it possible for shareholders to accumulate more stock without paying brokerage commissions."
But BUYandHOLD does not offer actual DRiPs to its customers. It seems to me that BUYandHOLD was designed to offer all of us the best of what DRiPs have, but with even more benefits. BUYandHOLD helps us Moms keep up with a DRiP strategy without having to contact a bunch of corporations. A traditional DRiP is an issuer-sponsored way to buy stocks directly from the company you want to invest in without having a broker. The disadvantage is that there are still fees associated with this kind of stock purchase. BUYandHOLD allows you to reinvest your dividends, just like DRiPs do, automatically and for free! (And as you all know, free is this Mom's favorite word!)
By using BUYandHOLD as DRiP equivalent, we can consolidate all of our stock purchases in one account - whether or not they are all stocks we choose to use the dividend reinvestment option with. We can buy or sell stocks twice a day, including those for which we have chosen the free dividend reinvestment option. Best of all, BUYandHOLD's commission is among the lowest, since they reinvest your dividends for free. I have also come across in my research that when buying DRiPs, the company sells the stock to the public at a set rate, however when you buy the stock at BUYandHOLD, you are getting market rates.
Choosing this option will allow your dividends to go directly back into the company as additional purchased shares. It is compounding at it's best. You automatically purchase additional shares with these funds…the ultimate "no brainer".
When I first opened my account with BUYandHOLD, the contract that I signed and returned had a Dividend Reinvestment option. I didn't know what it was and didn't have the time to look it up. So, as is my point-of-view with most anything that I don't understand at first…I checked the "No" option. Now I have learned that BUYandHOLD's Dividend Reinvestment option is something I want to sign up for. You don't have to worry that you're not adding to your investments, since reinvesting the dividends is done automatically. Life is complex enough as it is. Anything that can be done automatically is a blessing for Mothers everywhere. And it forces us into a good pattern of investing small amounts regularly over time.
With my BUYandHOLD account, I can change my Dividend Reinvestment status simply by logging in to get to the "View Your Accounts" page and then clicking on "Maintenance." Once there, I can go to "Dividend Reinvestment Options," where I can see a list of all of the holdings in my BUYandHOLD account and can make changes to the Dividend Reinvestment status of my securities.
As a Mom with a young son and limited cash flow, I know that I have got to find a way to force myself to reinvest my money. It is just too easy to spend. I know how I operate and I have to figure out a way to fool myself. With BUYandHOLD's Dividend Reinvestment option, I can automatically put that money back into my account, without it ever getting into my hands, thus making sure that I can't spend it! It's easy, painless, and I don't have to use up precious brain cells. (As I age I'm noticing that they're diminishing faster than I can replace them.)
And, of course, BUYandHOLD offers a very useful page with more information on how to add DRiPs to your investment strategy.
Another very useful site dripcentral.com is devoted solely to information about DRiPs.
And finally, I located an easy-to-use web site InvestorLinks.com that is worth a few minutes of your time to find additional information and resources on those DRiPs.
Thank you for joining me,
Joyce |
